The Bureau of Economic Analysis announced today that seasonally adjusted U.S. real GDP grew at a 2.8% annual rate in the third quarter. That’s close to the long-run historical average of 3.1%. With inflation coming down, I think we now can declare that the Fed has achieved the admirable but difficult objective of a “soft landing” — bringing inflation down without tipping the U.S. into recession.

Quarterly real GDP growth at an annual rate, 1947:Q2-2024:Q3, with the historical average (3.1%) in blue. Calculated as 400 times the difference in the natural log of real GDP from the previous quarter.

The new numbers put the Econbrowser recession indicator index at 2.4%. That’s quite a low number, and signals an unambiguous continuation of the economic expansion that began in 2020:Q3.

GDP-based recession indicator index. The plotted value for each date is based solely on the GDP numbers that were publicly available as of

Keep reading this article on Econbrowser Blog - James Hamilton & Menzie Chinn.

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