by Mitch Kokai
Senior Political Analyst, John Locke Foundation
As you watch ads and hear commentary in the days and weeks ahead about the Obama administration’s success in boosting the American economy out of the depths of the Great Recession, you might want to consider the following assessment from Barron’s “Economic Beat” columnist Gene Esptein:
By next month, following the end of the Great Recession in second quarter ’09, the U.S. economy will have scored 12 calendar quarters of uninterrupted growth in real gross domestic product.
Growth over the 12 calendar quarters has averaged a bit less than an annual 2.4%, assuming the Blue Chip consensus of 50 forecasters is right about real GDP growth in the current quarter (+2.2%). How sickly is that? So sickly, in fact, that if you go back to 1950, and examine all previous cycles of expansion, you find there has never been a 12-quarter period of expansion that ran as slow as 2.4%.
Add the fact that growth usually runs much faster following a deep recession, and this three-year period’s dubious distinction gets even starker. Following the deep recessions of 1974-75 and 1981-82, the first 12 quarters of growth averaged 4.5% and 5.8%, respectively.
Even following the mild recessions of 1990-91 and 2001, growth over the first 12 quarters ran, respectively, 3.2% and 2.9%. …
… Private-sector real GDP growth over the 12 quarters has averaged nearly 2.7%. That 2.7% is still one of the very slowest three-year periods of private-sector growth, during cycles of expansion, since 1950. But the 12-quarter periods around 1987, 2005, and 2007.
To appreciate the sickliness of that 2.7%, take one final comparison: Over the entire span from 1950 through 2007, which includes all recessions and expansions—except the most recent cycle—private-sector growth averaged 3.0%.