The Bureau of Economic Analysis announced today that seasonally adjusted U.S. real GDP fell at a 0.3% annual rate in the fourth quarter. One can make excuses for the number, but I’m not feeling optimistic.

Quarterly real GDP growth at an annual rate, 1947:Q2-2025:Q1, with the historical average since 1947 (3.1%) in blue. Calculated as 400 times the difference in the natural log of real GDP from the previous quarter.

The new numbers bring the Econbrowser recession indicator index up modestly to 6.8%. Note this is an assessment of where the economy was in the previous quarter, namely 2024:Q4. Since we started reporting this in 2005, Econbrowser reports this measure with a one-quarter lag to allow for data revisions and to aid the algorithm in pattern recognition. A value of 6.8% by itself is not that alarming.

GDP-based recession indicator index. The plotted value for each date is based solely

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

Leave a Reply