Saturday, 30 July 2011
How not to chart post-recession recovery. Is next recession at hand?
This truncated chart, starting at 12,600, exaggerates the bad news. What it shows is a 5% drop in GDP during the recession, not a 95% drop. The takeaway from John Mauldin is that two years after the bottom, the US is still below the previous peak. That's the unusual part of the chart. As you've read, yesterday's figures for the GDP low were revised a full percentage point down to that new 5% number.
The sienna is for recession. It's a pretty close match to GDP year-over-year gains below 2%. Expanded story in Mauldin's newsletter.