Friday, June 24, 2011

Breakout of BEA's 1st Q 2011 GDP Report by Sector

The Bureau of Economic Analysis (BEA) revised their estimate of the annualized growth rate of the first quarter 2011 U.S. Gross Domestic Product (GDP) up slightly to 1.92%. This is their third and final regularly scheduled estimate of the first quarter's growth rate, although sweeping revisions of prior estimates can occur at the end of each July.


Matt Franko said...


1.92% is probably the YoY change in "G".


Y (GDP) = C + I + G + (X − M)

"G = (government spending) is the sum of government expenditures on final goods and services. It includes salaries of public servants, purchase of weapons for the military, and any investment expenditure by a government. It does not include any transfer payments, such as social security or unemployment benefits."

Those components of GDP are probably up the 1.92 %, without that increase in G, we are probably negative.

I'll try to take a look this weekend thru the Treasury statements...


wh10 said...

I thought the government was cutting back on spending?

Matt Franko said...


It may actually be up a bit YoY.

I will look at the "cash basis" Treasury Statements YoY this weekend and do a post.

For instance even tho the Soc Sec COLA is zero this year, if more people are enrolled, then SS could show an increase, same for Medicare and Medicaid, Education programs...perhaps some others.

Although SS and transfer payments are typically not included in G, the balances that are provided to recipients probably end up in C (Consumption).

So I feel that if you look at the YoY total govt expenditures this should give you a good idea of what is going on (especially in this economy where bank credit is still contracting YoY, check the H.8 report at the Fed's website: still circling the toilet bowl).

YoY Total Loans & Leases just keeps falling, in this environment, the govt is all we've got, Mike keeps trying to make this point in his media, but it seems to keep falling on deaf ears....