Why this Economy Feels Even Lousier than the Lousy GDP Print

But the numbers are hushed up.

The meme that 14 million jobs have been created since the Great Recession is constantly held up as proof that the labor market has healed, or has practically healed, even if there are a few soft spots left over – such as the pandemic lousiness of the jobs that have been created.

In official circles, the sound of folks patting themselves on the back is deafening. But for many working-age Americans, who have to compete with each other in the labor market, reality is tough.

Turns out, the US population, currently at 323.2 million, has grown by 16.5 million people since the Great Recession. Which is exactly why the unemployment problem has become so intractable: job growth has been less than population growth!

While slow economic growth might look OK-ish on paper overall, in a country with significant population growth, it’s toxic on a per-capita level – and that per-capita level isn’t theoretical. It’s what people actually experience.

That scenario just played out with the Advance Estimate for first-quarter GDP, released on Thursday. Economic growth compared to the prior quarter was a miserably small 0.5% annualized, which means if the rest of the year is like this, total economic growth for the year will be 0.5%.

These numbers are adjusted for a version of inflation. One tiny understatement of inflation, purposefully or by statistical accident, would drive this “real” economic growth into the negative, meaning economic shrinkage. That’s bad enough.

But on a per-capita basis it’s even worse.

The Bureau of Economic Analysis, which produces the GDP reports, hushes up per-capita GDP because it would look too awful and therefore is not a metric the public should know about. But Doug Short at Advisor Perspectives tracks per-capita GDP. He uses the population data made available by the St. Louis Fed, which gets its population data from, well, um, the Bureau of Economic Analysis.

You guessed it: the BLS could publish per-capita GDP without breaking a sweat as part of its release. It already has all the data. But no.

And here is why it needs to be hushed up: Per-capita economic growth in the first quarter compared to the prior quarter was negative 0.3%!

In other words, the economic pie grew at a barely noticeable annualized rate of 0.5%, but this slightly larger pie has to be cut into even more slices, and each slice shrank by 0.3%.

Since the Great Recession ended officially, there have been six quarters when per-capita GDP was negative. The 10-year moving average of per-capita GDP is now down to 0.46%, the lowest in the data series going back to 1969.

Compared to the first quarter 2015, per-capita GDP in the first quarter 2016 was 1.13% higher. This year-over-year change was so small that it is associated with recessions.

This chart by Doug Short at Advisor Perspectives shows year-over-year changes in quarterly per-capita GDP going back to 1960. The red dots mark the level of year-over-year per-capita GDP at the beginning of official recessions (shaded areas). At the beginning of the Great Recession (Q4 2007), it was 0.9%, having fallen from 1.4% in the prior quarter. The average at the beginning of the past eight recessions is 1.32%. And now it’s at 1.13%:


So what people saw in the first quarter, with the overall economy nearly stagnating, is that their slice of the pie got smaller by 0.3% compared to the fourth quarter. That’s on an average basis.

In reality, a relatively small number of people saw their slice of the pie get a lot larger, while many others experienced a noticeable shrinkage. For example, if your rent went up by 10%, as it has in some markets, your slice of the pie was slashed by your personal inflation measure, which often far exceeds the stingy inflation adjustments applied to GDP.

This would explain why consumer optimism about the economy has been waning, and why the optimism of small-business owners is giving off recession vibes. Read…  Consumers, Small-Business Owners Souring on This Economy

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  81 comments for “Why this Economy Feels Even Lousier than the Lousy GDP Print

  1. frederick says:

    14 million coffee barristers is alot of barristers

  2. Ptb says:

    Nice analysis. It’s what I see in the real world. Job growth in low paying sectors and decreasing per capita growth is telling the accurate story. And people feel it, if they don’t actually know it.
    The divergence between the official story line and what the populace is feeling is becoming caverness. It’s heading towards Grand Canyon proportions.

  3. Ralph says:

    You woke me up this morning, for sure. Once again, it shows why we need to be constantly on guard for “government spin”. Excellent article, Wolf. You’re the man!

  4. randombypasser says:

    I’m lazy sob in this but i wonder if that 14M created jobs is created jobs ex lost jobs since year xxxx or just “new” jobs? There have been a lot of layoff’s so there’s a difference with new and “new”. If that new jobs is just the “new” ones, then the reality is even worse than Wolf here shows as xxM jobs have been lost since the year xxxx and population has grown some after that, but just 14M new/”new” jobs created.
    As someone already hinted the new jobs created are probably low pay jobs mostly and the lost ones quite likely aren’t. GDP will whine in agony…

  5. VegasBob says:

    A day or two ago we were treated to a report that economic growth during Barack Obama’s Administration will have averaged only a miserable 1.55%, and that’s only if growth during 2016 hits 2.67%, which is unlikely.

    The same report indicates that Obama will go down in history as the first President who did not achieve one single year of economic growth at or above 3% during his entire Administration. That’s certainly not a legacy worth remembering.

    Moreover, if the government used honest inflation measures instead of the contrived figures it routinely publishes, I suspect that the actual growth rate of 1.55% over the past 8 years would closer to zero, plus or minus a couple of tenths of a percentage point.

    The undeniable fact is that economic performance during the Obama Administration has been the worst since the Hoover Administration, which ushered in the Great Depression. The big difference is that today there are numerous social programs that mask Obama’s horrid economic performance – unemployment compensation, food stamps, welfare payments, housing benefits, Medicaid. Such programs did not exist in the 1930s.

    Of course, you won’t see such numbers reported by the mainstream media, ever.

    This entire Potemkin ‘economic recovery’ has been achieved by reducing incomes on Main Street and incurring unprecedented levels of debt so that Wall Street could manipulate financial assets such as stocks and bonds to all-time highs.

    • ChrisM says:

      As a republican, let’s be fair to Obama vs GW Bush. If you average the real GDP growth rates for GW and give him the negative rate of 2009 (which was the bed he made), GDP growth under GW was 1.6% per year during his administration plus the added downturn of 2009. Under Obama, it was 2.1%. GW Bush was buoyed by the inflated years of 2004 and 2005 when mortgage fraud was ramping and driving the economy, which is why he gets to inherit the 2009 downturn in this calculation. GW’s legacy from an economic standpoint is, in my mind, worst than Obama’s.

      • bead says:

        Obama had two years to exercise any mandate. He chose to forgive our nice banksters and write big checks to the healthcare racket following the Romney pork barrel plan and an expert who was convinced that voters were asleep. Plus he explained that people would keep their current providers, evidently without checking with his experts. The Republicans decided to stonewall for the next six years instead of governing. So it’s all up to the Fed. Print money for the rich and hope they spread some crumbs around. You’d almost think that democracy can no longer lead to any constructive action (maybe it’s all technique from here on). The Republicans should absolutely lose Congress if the voters care, which perhaps they don’t.

      • VegasBob says:

        I’m a registered Democrat. I despised Bush’s tenure and voted for Obama in 2008.

        However, Obama took no action of any kind to correct any of the excesses that built up during the Bush Administration. From the outset in 2009, the Obama Administration gave the bankers a free pass. Not one major banker criminal went to prison. The only notable conviction was Bernie Madoff, whose crime was ripping off other rich people.

        As such, I have to conclude that Obama’s tenure has been far worse than Bush’s. Obama could and should have acted forcefully to fix the problems in the banking system, but instead he simply turned his head and looked the other way.

        • unit472 says:

          One must also remember that Obama had the ( unspent) $700 billion TARP funds AND the $886 billion ARRA stimulus funds at his disposal. Since all the TBTF banks paid back their TARP funds ( save GMAC/ALLY) almost immediately Obama had 10% of GDP to spend to reboot the US economy.

          At the time I even wondered why it was necessary to save the TBTF banks and their incompetent managers. Just the $700 billion in TARP funds could have capitalized 10 new super regional banks @$70 billion each or more than what Citi, WFC or BAC were actually worth and the ‘new banks’ would have clean balance sheets sufficient to fund the economy. As a bonus each new ‘super regional bank’ would need, as banks always do, a new 50 story plus HQ tower so the US construction industry would be as busy as Dubai erecting new glass towers!

        • Intosh says:

          I think you overestimate the US president’s real power vis-a-vis the bankers’. No US president could have done anything significant to the kingpins of banking.

        • d says:

          “No US president could have done anything significant to the kingpins of banking.”

          NOT SO.

          Wall Street Publicly railed against the toothless dodd frank, which O bummer signed

          He had warren and her clan SCREAMING for Malicious vindictive action against the ENEMY RICH, and their BANKERS, and could have used them.

          If he wanted to.

          Obviously, he didnt want to.

          He did what he wanted to. And played lots of golf at the Taxpayers expense.

          Obama. The most divisive, incompetent, underachieving POTUS in US History.

      • Lee says:

        Yep, gotta hit George, nothing is ever the zero’s fault.

        Just wait until Obama care really kicks in………..of course it will AFTER the worst president in America’s (Amerika’s) history leaves office.

        Then you Obama supporters can blame the next guy/gal for that failure too.

      • Crazy Horse says:

        What a thankless task– trying to decide which puppet president was worse, Little Bush or Barack Obomber.

        George Bush, who read stories to a classroom of children while Dick Cheney orchestrated the false flag attack on the World Trade Center and kept all the nation’s fighter interceptors on the ground?

        Or Barack Obama, who became the world’s most notorious assassin, spreading remote controlled drone terror throughout the Middle East —- and allied the US with radical fundamentalists in an attempt to conquer Syria and open the path for an end run around the Russian monopoly on natural gas supplies to Europe?

        George Bush, who promulgated a policy of No Taxation for the Rich?

        Or Barack Obama, whose department of Injustice failed to prosecute a single Bankster while they looted the middle class, fraudulently stole their homes, and left only dry husks blowing in the wind?

      • Pakilolo says:

        Let’s not forget the Bush/Chaney trillion dollar Wars for nothing but ego enhancement based on lies. They should both be in prison.

    • Kam says:

      From Stockman:

      “In all, governments and corporations involved in the arms deals approved by Clinton’s State Department have delivered between $54 million and $141 million to the Clinton Foundation as well as hundreds of thousands of dollars in payments to the Clinton family, according to foundation and State Department records. ”

      I guess some have done well. Best return on investment- buy a politician.

      • Pakilolo says:

        That is why I voted for Bernie Sanders. The young voters are right again and again and again. We never listen because we live in the fog of illusions. But…Climate Change is coming on faster than most scientists ever predicted. Change is coming. We are not in control. Everything is impermanent!

  6. c smith says:

    “…job growth has been less than population growth!”

    True, but growth in the working-age population over this period would be a much more meaningful comparison.

    • Wolf Richter says:

      Yes. I have charts from the BIS, comparing the US, Japan, the UK, and the Eurozone on a basis of GDP v working age population. But it covers the period from 1999 through mid-2013. So it’s too old to use in the article. However, I posted one of them below.

      In terms of GDP growth per working-age population over that period, Japan is Number 1! About 10% ahead of the US and UK and maybe 12% ahead of Eurozone countries.


      Which tells you that a declining population, and especially a declining working-age population in a crowded country (Japan) can be a good thing for individuals, though politicians hate it because their past promises become lies, and corporations hate it because they need an unlimited supply of cheap labor and unlimited demand from too many consumers.

      Back to your original question, via another angle: In the US, boomers have refused to retire and as millennials have moved into that age group. So that’s why the employment-to-population ratio is low.

      • d says:

        “n other words, the economic pie grew at a barely noticeable annualized rate of 0.5%, but this slightly larger pie has to be cut into even more slices, and each slice shrank by 0.3%.

        You failed to add or mention another large and important number which actually makes the GDP per capita loss worse again.

        Illegal and undocumented Immigrants/Alien’s.

        • Wolf Richter says:

          Possibly. But to my knowledge, monthly population numbers in the US are extrapolated from the census (every ten years). The census counts everyone they can find, legal or illegal. There have been suggestions that it undercounts illegals since they tend not to fill out the forms or disappear when the census taker shows up…

          But I think the Census Bureau even estimates those disappearing illegals. That number you hear a lot – 11 million illegals in the US – is derived in that sort of manner. No one knows the actual number for sure.

  7. Petunia says:

    The lack of GDP growth is being expressed thru the political process in this election cycle. The divide is clear on the GOP side. Those experiencing the bad economy are with Trump. Those not suffering have the luxury of worrying about things other than the economy.

    Here’s an anecdote that describes the economy in middle class America, I think I’m middle class, I could be mistaken:

    I went to the mall last week to buy badly needed underwear. Found a nice dress on a clearance sale, 40% off, and bought that too. Blew a tire leaving the mall and had to buy a replacement. Prayed at Goodyear to have enough money to pay for the tire. After paying for the tire, I would have returned the dress and the underwear if I could have. This is what it’s like out here in the real economy. Any mishap can make going out to buy needed underwear a bad decision.

  8. NOTaREALmerican says:

    Good link to Doug Short. You’re both very good reads. Thanks.

  9. David says:

    I guess that may explain why a guy who is still very able-bodied with 30 years of experience, and has a BS and MBA degrees, has to work a $12/hr part time job just to help keep his family afloat. But hey I’m fortunate this job pays barely over the California min. wage of $10.50.

    My best advice to high school kids would be to think twice before you decide to go to college. Parents should really think hard about it too. A college degree today is worthless if it doesn’t result in good paying career thereafter. I didn’t have to worry about that as a young kid 35 years ago. College graduates nowadays have to worry if they can somehow be fortunate enough to land that minimum wage job.

    • Petunia says:

      That MBA may not be worth much in America, but might be worth more overseas. Seriously consider taking a job overseas. You will be treated like royalty in most overseas companies with an American degree. Good luck, I feel your pain.

      • Steve in Flyover says:

        Too bad there are “trade barriers” to overcome. Even though there is a worldwide “shortage” of people with my skillset.

        My US certification isn’t recognized overseas. To get EASA certification, I would have to basically start from scratch, assuming I can figure out the various hoops I’d have to jump thru.

      • Lee says:

        Well, yes and no.

        If you are young (and dumb), maybe. If you are old and grey – no way.

        For Australia all of your qualifications will have to be evaluated by the NOOSR government entity here. Of course as Australians do a basic university degree here in three years means that they are sooooooooo much smarter than the people in the USA.

        If you want to do a Doctorate, well you better have finished your Masters within 10 years or you’ll have to do that all over again………..it doesn’t count.

        For those of you ‘old folks’ interested in moving to Australia, well, basically forget it.

        About the only way for an old fart to get here now is either by inter-company transfer or having lots and lots of money.

        And you’ll need lots of that stuff. As most of you know from articles here we have had a housing boom in many areas. Yeah, you can move to podunk, but there won’t be any jobs, infrastructure, or many people.

        Move to the big smoke and you’ll need around A$600,000 or more to buy a decent house.

        Then add in daily costs of living and you’ll know why Australia is one of the most costly places to live in the world.

        Twenty years ago it was cheap. It isn’t anymore.

        Just one actual example.

        Water bills.

        In 2009 my bill service charge for three months was A$14.24 or about A$5 a month. Sewerage service charge was A$46 or $A15 or so a month.

        Total service fees before any water use was A$20 a month.

        Usage charges were 1000 litres of water at A$1 per 1000 and sewerage usages was A$1.26 per 1000.

        Fast forward to 2016.

        Water service fee is now A$10 a month (doubled). Sewerage service fee is now A$32 a month. (doubled).

        Usage charges for water is now A$2.58 per 1000 litres. More than doubled. Sewerage is only $A1.87 – a miracle up only 50%.

        Of course, I forgot to add in all the other bull s**t charges that the local and state government also add on each bill and keep going up as well.

        You can say the same for almost anything else except wages. Gasoline is twice as much as 20 years ago, real estate taxes have doubled in the past 6 years, electricity the same – more than doubled in 7 years, natural gas, etc.

        Lamb used to be crap meat. Now it costs around A$46 or more for good ole lamb chops.

        Australia is a great place to retire if you have lots of money.

    • Steve in Flyover says:

      All three of my daughters have opted out of college, and are currently better off for it. Without the albatross of $100K worth of school loans hanging over their heads, you can keep your head above water out here in Flyover working a $12-15/hour job.

      At least for a while, as long as you don’t have kids. Their eldest sister just quit to be a stay at home mom. Worked 12 years for a major retailer, Store Manager, but her pay was so low she was basically working to pay for the child care (a lot of that going around).

      Unemployment (despite the Republican propaganda) doesn’t pay enough for it to be the corrupter of boot-strapping individualism they stay it is. It is, however, better than digging a bigger financial hole, vs. actually working a 40 hour a week job.

      Almost all part-time, minimum wage jobs are net money-losers for the regular working stiff, when the costs of working are figured in (meals, transportation, etc). That’s why I discouraged my kids from working in high school. The only way it “worked” was because of the various subsidies/out of pocket expenses from Mom and Dad.

      This trend of “more work for less pay” has been going on since the mid 80’s. Coincidentally, the same period where Republicans and Republicans Lite (aka Democrats) have controlled the agenda. To me, this is no longer a coincidence.

      All of these problems have been exacerbated by uncontrolled immigration, either legal or illegal. How many of those new 16.5 million are here by immigration? To me, adding more people you can’t find work for isn’t helping. Or worse, can only find work by undercutting the pay of the current workforce?

      OTOH, if the new immigrants will come here, work harder for half of the money, and take the jobs of doctors, lawyers, politicians, lobbyists, defense contractors, hedge fund/private equity pukes, and CEOs, my stand on immigration would change.

      Of course, if that actually happened, the “threat to National Security” light would go on, and you would see barbed wire and Bradley AFVs strung out a quarter mile deep from the Pacific to the Gulf of Mexico overnight.

    • nick kelly says:

      Re: MBA- Germany and Japan are the two most successful exporters since WWII (BTW: in many of the last ten years, Germany, not China, is THE largest exporter in dollar terms- they don’t do flip flops.)
      Neither traditionally had schools of business, and both cultures find the concept somewhat puzzling. It may be changing now but in Japan especially the idea of someone studying business in general and on that basis entering management was counter to their concept of learning ‘genba’, ‘where the rubber meets the road.’

      Of course their universities offer MBA’s now as post- secondary ed has turned into a Walmart, but it wasn’t until the 1990’s that you could get a German MBA.
      RE; today’s degrees- Apart from serious science, I generally agree, unless one feels they are suited to a highly structured workplace- government etc.
      But by way of advice to a young guy- may I suggest plumbing. As a sometime renovator, I taught myself plumbing. It’s no big deal frankly and 90% of plumbing calls ( not installation) are not done by ticketed plumbers. Soldering can be learned in about 15 minutes and is kind of fun. The sewer lines are all tight fitting plastic that you can test before glueing.
      They are always hiring- I’ve seen ads saying ‘if you have any experience’
      But remember- locate the main shut- off before touching anything.

    • Lee says:

      (un) Welcome to the club , David.

      No difference downunder in Oz.

      At least we have jobs.

    • prepalaw says:


      you sound like a sincere person. But you confuse the number and quality of your post-high school degrees with the amount of money you earn.

      After you graduate, you must do your post-doc at “Screw-U”. City kids with street smarts know how to protect themselves. Unfortunately, many people with degrees have never been hardened and never learned survival skills.

      If you are in Corporate, there is skill set to be acquired. Ditto for the entrepreneur. Same for Government or the Military. These skills have nothing to do with doing your job. In fact, you can be lousy at your job and get promoted if you have learned how to survive in your workplace environment. Of course, none of this is fair. But, getting a financial reward in most cases has not much to do with what you deserve. You get what you can negotiate.

  10. NotSoSure says:

    No wonder the pie is shrinking since the muppets keep signing up for Amazon Prime. Life’s good.

    • Petunia says:

      Amazon offered college students half off forever if they signed up. My son signed up.

      • prepalaw says:

        Without trying to be rude, half off of what – their tuition bill.

        • Petunia says:

          I’m from NYC, I don’t take offense easily.

          However, Amazon started office prime memberships to college students about two years ago. It costs about $50 a year and is locked in at half price forever. Since my son buys most things online anyway, the shipping cost savings alone pay for the membership, and he gets to watch movies, and read free stuff as well.

          It may interest some readers to know that right after Amazon did this they reported higher subscription rates without disclosing the reason.

  11. Ptb says:

    The more urgent and disturbing reality is that of automation. As the population swells, more work will be automated. I saw Phil Night of Nike fame talking last night and he said that cheap labor is quickly on track to be replaced by automated processes. This may be a real game changer for Emerging market economies as well as the west.

    • MC says:

      Spot on. The machines are taking over, and will put a bullet through the head of the Agricultural Revolution-vintage idea that cheap and abundant labor is a prerequisite for explosive economic growth. China will be the last success story.
      And don’t think it will be limited to manufacturing: in 2013 CNH introduced a grape harvester that can also prune vines, defoliate them and treat them with pesticides and other chemicals. The only human needed is a single operator.
      I saw a field demonstration in France and to say I walked away impressed would be an understatement. I had just seen the future, a rare occurrence.
      CNH now also offers a fruit harvester for trees grafted on dwarfing rootstocks, which are already spreading due to their capability to increase yield per acre and reduced care costs (lower, smaller trees = quicker to prune and treat).

      I don’t want to sound heartless, but those masses pouring into Europe and the US from the Third World are in for a very rude awakening. Long term they cannot compete with the machines, which also have the bonus of not influencing elections.

      • prepalaw says:

        Excellent comment. Do you know of other manufacturers of robotic equipment.

        Unfortunately, CNH is a diversified company, which is losing money fast, heavily in debt and has profit margins which are too low:


        • MC says:

          Well that’s the price of being owned by FIAT-Chrysler, one of the most bailed out entities ever to exist. I should really say more about FIAT’s empire of debt and bailout, but let’s focus here.

          To reduce debt exposure since 2009, CNH has been progressively getting out the earth moving business, which has long looked like a minefield despite the Chinese building boom. See Caterpillar.
          A major mistake they made is to attempt taking on John Deere frontally. John Deere has long owned 60% of the worldwide market for high powered (250HP or more) agri machinery market. In short Deere doesn’t own the market: it is the market.
          Underneath it’s a free for all, with competitors from Italy (SAME, ARGO etc), Japan (Kubota, IHI etc), Korea (Doosan) etc making it a brutal place to compete.
          Grape harvesters are one of the few components of the FC conglomerate to be profitable. They were originally part of the French group Braud & Faucheaux (which operates under the Manitou brand) and I wouldn’t rule out it may change ownership again in the future.

          Regarding other automative firms… the worldwide leader in industrial automation by a fair margin is FANUC of Japan. The market is mostly owned by Japanese companies: Nachi-Fujikoshi, Yaskawa Electric, Hitachi and KHI.
          The largest non-Japanese companies are KUKA (Germany), Staeubli (Switzerland) and ABB (Swedish, but headquartered in Switzerland for fiscal reasons ;-)).

          To go in other sectors, Komatsu has been fielding self-driving dozers for a couple years now and is experimenting with automated mining equipment.
          Daimler has received certification from the NHTSA for its first “assisted” lorry in the US: it has a sophisticated system to reduce the driver workload on long hauls. Still not a self driving lorry, but we are getting there.

          And finally there’s Honda. Honda has been making the news for quite some time now with their ASIMO demonstration robot. It’s basically a toy, but the technology behind it is simply mind-bending.
          Knowing Honda, they have surely some large scale use for the technology in it in mind, albeit right now nobody knows what that may be.
          There are rumors Honda may want to enter the healthcare market with it, but the applications for that technology are literally numberless.

        • pre says:


          thank you for your detailed follow-up – I have put your comments in my file for robotic applications.

          I know FANUC – we use them exclusively in our robotic applications for distribution packaging equipment ( palletizers and de-palletizers. Our affiliate in Germany uses ABB.

          They are the best manufacturers of basic robots. But, it is what you do with the machine that counts – for example, we design and manufacturer our own proprietary grippers and applications software.

          I do not own, but have looked at ISRG (and to a lesser extent – TRXC) – surgical robots – the “Da Vinci Machine”. These are one trick ponies and that is why I was fascinated with your grape harvester. These are the kind of investments I would like to pursue – something practical which can be put into practice. Medical applications have huge regulatory hurdles. But, probably so do lawnmower and vacuum cleaning robots.

          A robot without a human operator is something to be reckoned with 20 years from now. But for today, a human, using a robot, like a third arm, is accepted and will become more commonplace.

          If you have additional thoughts, please pass them along.

      • Kat says:

        I seem to hear the groans of sympathy coming from the ,not so distant, era of ghostly Detroit car manufacturer’s assembly lines and other derelict manufacturing entities. The progression to “In the Year 2525” has been ever-present my entire life.
        Starts at the bottom and works it’s way up the food chain, no one takes all that much notice until they are the one being consumed.
        Not heartless, just fact.

    • polecat says:


  12. OutLookingIn says:

    The BEA and BLS published statistics must be highly suspect as to their accuracy, after being “massaged” with seasonal adjustments, or inflation adjusted levels.

    The NBER is a little more accurate, but is a lagging indicator. It at one time, proclaimed a recession. By the time of their proclamation the recession was over!

    The one big difference in the chart is the fact that since the “Great Recession” the GDP has touched the 2% level 4 times, but has failed each time to hold above it.

    Currently the YoY per capita GDP sits at 1.13% and failing to hold above 2% since the recession inception, points to a mediocre GDP of 0.87% for the intervening years! This at best may be described as stagnation.

    The “Great Recession” has not ended on main street and has been morphing into the “Greatest Depression”. The FIRE economy is now serving it’s Banquet of Consequences.

  13. d'Cynic says:

    “These numbers are adjusted for a version of inflation.”

    Meaning if the inflation calculation is wrong or manipulated, the real GDP could have been in decline for years.
    A true measurement would be a happiness gauge. To borrow a term from the current political climate, I would call it the Trumpometer.

    • Steve in Flyover says:

      I have my own “S##t I can no longer afford” List. I’ve been keeping is since around 1990. On it, in no particular order:

      – Various “bucket list” expenditures

      – New car every eight years

      – Maxed out 401K contributions

      – Vacations with a duration longer that 3-4 days

      – Helping the kids pay for college.

      – Owning, rather than renting an apartment/house

      – Being able to retire

      Yeah, it’s all the fault of the central bankers, blah blah……… All I know is that when I haven’t been laid off, I have seen 25 years of 0-3% pay raises in times when the defacto inflation rate is pushing 5-6%. While the suits at the top of the food chain seem to be getting all of the money I’m not making. In spite of having a job where the “shortage of experienced workers” has been whined about for 20 plus years.

      Free Market my azz. A fantasy like pots of gold at ends of rainbows, and candy crapping unicorns.

      Riddle me this, Batman…… How can you call anything a “free market”, when the price of oil is controlled by the whims of a cartel? Specifically, one member of the cartel?

      • nick kelly says:

        Check the salary increases for unionized public sector for the last 20 years, including since 2008. You may find your missing money

        • Petunia says:

          A cop in West Palm Beach, FL makes 113K base pay. That’s more than in New York City. Most taxpayers in the West Palm think they are doing really well making half of that.

        • Steve in Flyover says:

          (Sound of Buzzer)


          I’ve lived in a “Right to Work” state (Kansas). Ask us how our “Zero state taxes on rich people” is going.

          None of the regular working stiffs in the state or local government is getting rich around here. Thanks to the crapification of company pension funds, their retirement plans are marginally better.

          The biggest issue there is “double-dipping”. Work 20 years in the military police, draw a pension. Then work 20 years for the state, draw another pension. While also being a member of the “Flying club” (AKA Air National Guard), fly a couple of times a month, then draw ANOTHER pension.

          Then, when 59 1/2, “retire” and become a consultant for all those Third World police departments on the latest methods of riot control.

          And bitch about how the freeloaders are screwing up America.

        • TheBloomIsOffTheRose says:

          Don’t forget the generous benefits enjoyed by public sector employees, and increasingly, the bonuses, once reserved for the private sector.

          Not to mention the oath of silence that naturally accompanies an irreplaceable job and benefits.

        • Ptb says:

          Federal govt is still govt. state and local may vary.

      • bud says:

        Maxed out 401K contributions…

        That is how you job gets destroyed, you did yourself.

        Machines will do anything and everything that any college degree can in the very near future.

        I remind folks that a bout ten years ago all your phone could do is make a call and some could text, Facebook was still in college, no snapchat, Twitter, Bluetooth, wifi, No algos running the stock market, a thread of honest government existed, China was being financed by wall street while you lost your home….on and on.

        We all know exactly where things are going, just as the molecules knew exactly where they were going since the big bang ( quantum physics) .

        Just wait until the quantum computers hit in the next year or so ( for real), there will be no need for anyone being hired for anything.

  14. Kreditanstalt says:

    Per capita is a much more sensible way to attempt to measure the (unmeasurable) GDP.

    The economy is not “slowing”; it’s shrinking. The number of people with secure, full-time salaried positions at “big companies” – and with disposable income” is falling and has been for years.

    Just look around your suburb. Even in those serene modern rancher upscale neighbourhoods with the green lawns, RVs and F-150s, behind the living room windows there are massive mortgages…most are living paycheck-to-paycheck, all with next-to-no savings and all completely dependent on keeping that (increasing unjustifiably) overpaid job.

    Waiting anxiously for the job losses and pension payout cuts! Not because of any wished suffering but to bring on real price discovery and monetary honesty.

  15. bead says:

    The Fed should just raise interest rates and clobber the stock market. Then we can return to some real politics. I have to remember that the Fed is controlled by the banks anyway. But the banks aren’t doing well with ZIRP and maybe that’s one reason for hope. Not much reason, though, because letting the stock market fall invalidates ten years of Fed BS. So we just circle the drain. I would prefer functioning democracy over demagoguery or the Fed dictatorship but I’m not holding my breath.

  16. Dan Romig says:

    Since the 2008 meltdown we have seen TARP, QE I, II & III, ZIRP and now NIRP. These are all wealth transferring mechanisms that are skewed towards the 1% in general and the 0.01% to an even greater degree.

    The über-elite do not drive the GDP and Main Street economy, and that’s what we see here. No, the 99% are getting squeezed, and it does not look like anything will change in the near term.

    Kreditandstalt mentions pension payout cuts, and this is the predictable result of ZIRP. How the heck can a pension fund manager generate growth on their fund’s capital today?

    In my world (of dreams), the President elect in January 2017 will abolish the Fed and put the control of issuance of currency and monetary policy back in the Department of Treasury’s control – where it belongs. But until that happens, which it won’t, this economic flatline will drag on for a long time. Our nation does not maintain its infrastructure, and it’s way over its head in debt.

    Thanks boys and girls in the two party status-quo. Nice freaking job!

  17. davikk says:

    Can anyone tell me if there is any instruments that can short Heng Seng Index (hong kong stocks) – one of the biggest stock market in Asia. I believe hong kong stocks is in for a rough ride, will drop worse than any other markets. Any etf can short stocks over there?

    • NotSoSure says:

      If you are brave, open an account with Oanda or one of the FX brokers. You can short the Index with an insane amount of leverage if you want to, although depending on your timing it might also put you in the poor house.

      Alternatively you can short EWH. I’ve found in the past though that it’s notoriously hard to short a long ETF nowadays. My broker always ended up calling mine after some short period and afterwards it’s like “We are unable to locate the stocks.”

      • Kasadour says:

        I wish I had the guts of Michael Burry– I’d be shorting (the sh**) out a lot right now. I just can’t ride it out against the FED’s machinations.

      • davikk says:

        Thanks alot! Hong kong economic data is the 2nd worst after Brazil. Yet its stocks recovered so fast from Fed 11th’s low. Despite stocks railled, its real estate never stop dropping. I’m suprised there is no etf which is directly shorting Heng seng index.

    • d says:

      If you are going to do that in the US or amny other places go FXCM or some other broker that.


      Oanda does not have zero balance protection (I got this confirmed on friday the 29 April 2016) if you get a negative balance shift, you will get a very large bill, and they will peruse it.

      Whole bunch of online brokerages will have H/S in their traded Incies list.

    • MC says:

      If you are US-based, look up Direxion Funds and Northern Funds. They have both long and HK ETF’s.
      If you are EMU-based, look up Eurizon. They have a gaggle of ETF’s linked to the Hang Seng and SCSI, both short and long.

      As usual, buyer beware, read the fine print etc.

      And always remember the PBOC Plunge Protection Team is not above extending its activities to the former British colony.

  18. Kasadour says:

    In Oregon, the law changed– unless you’re on a lease, landlords must give a 90 day notice before any rent increase. Big deal. Ok– it buys the tenant a little more time. But moving expenses are high, and rents are ridiculous so one must weigh the cost. Why are the middle class being priced out of middle class rental market(s)? What’s going on?

    The problem isn’t minimum wage. It’s the price of rent (and food and utilities) constantly increasing while wages stay the same. Bring the rental price(s) down!!!!

    • d says:

      NO reduce illegal immigration start sending illegal immigrants back tariff import dumping and unfair trade.

      The wages will start to rise and unemployment drop.

      Why should then return on a property be reduced, to please the tenant when there is no shortage of tenants.

      Most renters do not pay enough to cover the interest and taxes on the property’s they rent.

  19. Chicken says:

    Good work Wolf, thanks for the explanation.

  20. peter brown says:

    Isn’t working age population the real criterion this should be based on?

    • Wolf Richter says:

      Yes, but…. (I don’t have access to that data for the current period).

      I do have some data that is related. Check the question by “c smith” and my response above.

  21. Hal says:

    50 years ago Wang Computer intoduced a machine for typing that made the IBM Selectric obsolete. It made secretaries obsolete. But 4-5% economic growth covered that.

    The automation as we know gets moreintense but since 50 years ago economic growth has trended down even with the numbers gaming. We cannot cover the automation or outsourcing.

    We also had things that laster longer like refridgerators which now cost a fortune because they have leds and electronics and more plastic and it cost a tad more for energy efficient but it does last as long. It still does the same thing as 50 years ago.

    We now have 500 tv channels of lord knows what where we used to get tv for free with only commercials. Now we pay fot tv and still get commercials.

    And somebody pays for tv announcer compensation, all athletes huge pay, entertainment tents for customers attending golf events, and everything else .

    We cannot afford this style of living as in the global community we are not price competive what with minimum wages, high benefits and regulations.

    We are cooked, finished. Answer me this. How do we pay off our debt and obligations.

    • Petunia says:

      I think the plan was to never have to pay back the debt. If you really pay attention, Washington doesn’t care about how much they spend, especially on the military. Look at what they do, not what they say.

      • d says:

        The plan was to inflate it away with among other things an ever expanding base population of consumers.

        The problems with this the leftist central planners missed are: finite resources, human pollution accelerated global warming, leading to rising sea levels.

        Other major Economies deciding not to allow the US to inflate away its debt.

        Once the Major CB’s started heading in different directions (Starting when the US went QE and the ECB refused to follow at the same time).

        The financial Shitstorm caused by the CB’S heading in different directions at different times. Must now be allowed to play out completely (this may take decades) before a new direction consensus can be agreed.

        The Japanese Americans and British agree that monetary policy alone can not resolve the problems.

        The ECB and china are still heading in the easiest direction for them which is not the direction of resolving the long term issues. Theirs or the systems.

        • walter map says:

          “The problems with this the leftist central planners missed are: finite resources, human pollution accelerated global warming, leading to rising sea levels.”

          The failure to address the issues of finite resources and destructive externalities is a defining feature of unregulated capitalism.

          There are no “leftist” central planners but there are totalitarians, none of whom can be described as liberals, at least not honestly. Actual progressive liberals do address these issues and corporatists wage war on them for doing so.

        • d says:

          “There are no “leftist” central planners but there are totalitarians, none of whom can be described as liberals”

          Inside every liberal there is a closet totalitarian Screaming to rule.

          All central planners are by default, leftist liberals, and Totalitarians, their way is the only wright way for the masses, they claim.

          They will support this with guns and genocide, at any evidence of dissent, given the opportunity.

          “The failure to address the issues of finite resources and destructive externalities is a defining feature of unregulated capitalism. ”

          No it is the failure of Keynesian leftist stimulus increasing consumption to grow at a faster unnatural rate.

          “The failure to address the issues of finite resources and destructive externalities is a defining feature of unregulated capitalism. ”

          Is a defining feature of what we have most definitely.

          What we have is almost unregulated, unsustainable, consumerism based capitalism, due to Keynesian leftist stimulus policy’s.

          Not unregulated capitalism.

          Unregulated capitalism would not allow the leftist Keynesian stimulus which unbalances everything.

          Unregulated capitalism, wants the Darwinism, Keynesian stimulus (QE), prevents.

          All leftist liberals are Totalitarians you see this a soon as you dare to disagree with them EG Helen Clark V Tamihere.

    • walter map says:

      “We cannot afford this style of living as in the global community we are not price competive what with minimum wages, high benefits and regulations.”

      If you’re not “price competitive” it’s because workers in other countries are prevented from profiting from their own labor, and extending such a policy to all countries only worsens the situation for more people.

      In the absence of a minimum wage, benefits, and regulations most of the population of your country will become acquainted with the Haitian lifestyle without ever having to move. It is hardly a worthy goal to profit by reducing the general population to destitution.

    • walter map says:

      “we are not price competive what with minimum wages, high benefits and regulations.”

      We can start by cutting your income to $68/month to make you competitive with the Bangladeshis.

    • Bigfoot says:

      Sad that even a rock band in the 70’s knew paper money don’t hold. Some vintage Montrose.

      In our current monetary setup, the debts can’t be repaid without abolition of the system. Over simplified explanation but if 0 money existed & a CB creates $100, loans it to gov at 5%, there now exists a debt of $105 but an existing monetary base of only $100. Where does the extra $5 come from to “pay off the debt”? See the problem with a fiat monetary system disconnected from labor & productivity.

      • Inflation – this is how they want to escape the debt. Problem with this inflationary escape of debt – idea that through increased money supply (gov spending) you can have inflation bigger than your interest rates accrue on your debt – is that you are TAXING everyone with savings through destruction of money. What is more – if you could have some sort of a guarantee that whatever government spends money WILL WORK – you don’t have it. If it is a failure, it is huge and I mean bigger than 2008. Now we have many examples of such risks – Auto loan bubble, student loan bubble, S&P bubble not to mention bankrupted governments that can go to war not to pay the debt…
        this is called war on cash. We see it in front of our eyes and it will be bad. http://independenttrader.org/war-on-cash-a-piece-of-a-bigger-puzzle.html

        • Bigfoot says:

          War on cash indeed & it is global in nature. Cash represents the last bastion of autonomous financial freedom & the power structure everywhere seeks to eliminate this.

          What is seldom discussed is the underground economy & the huge amount of cash flows related to it. Many banks have been complicit in laundering the cash associated with the underground market. The war on cash has been ramped up here in the us with billions of dollars in civil asset forfeitures in recent years. They are allowed to steal whatever “suspicious” amount of cash or goods you may have on you without charging you with any crime. It’s outright theft & you have to expend considerable resources to have any hopes of getting back your properties. Pure legalized theft!

          I doubt there are any reliable statistics in regards to the underground markets but it would be interesting to know if these activities are growing or in decline. I would think that as our economy washes down the drain, the underground economy will grow & cash will not be completely eliminated. Anyone have anything on this?

          I can envision a point not far down the road where your debt will be a part of capital control systems. Examples would be restricted movements within the country or travel to other countries. ” I’m sorry sir/mam, we have denied your travel to ——– due to your current debt levels. We will escort you to Sector D so a proper plan of reconciliation may be implemented. Step this way please.” Sounds far fetched? Maybe, but consider where we are on the global political, societal, & financial fronts & try to recall your belief systems from 1, 2, 3 or more decades back if you’ve been around awhile. Did you envision all the nuances of the current times?

          As far as extinguishing our government debts, I believe 100% in what I posted above. If someone can give a concise explanation of how debts can be repaid in our current debt based fiat currency system without abolishing the system I would love to hear it. I believe Petunia is right & there was never any intention to pay the debt & primarily because of simple math. It’s a simple con game & they have done everything in their power to complicate the system & keep people perpetually confused. It will end when it finally goes boom. Whomever controls the issuance of a countries currency is in the drivers seat & the red pill/ blue pill paradigms in the us will not make a difference as they are all totally corrupted.

          Here is where we are eventually headed.

        • d says:

          Some Western, as well as Eastern States. Already refuse to allow you to leave, if they claim, you owe them.

          There is already some talk of them extending this to student loans.

          Draconian you pay (exorbitant amounts, you dont have, as we have frozen all your assets)t o prove you acquired this asset/liquidity with tax paid funds, seizure laws, with very low ceilings. Are becoming more prevalent in the west.

          More of a reason to have liquidity beyond the national jurisdiction you live in, and all assets held in trust, or by trust held entity’s.

          The police and the state are not there to help you, they are not your friends, they do not act in your interest, or care about the rule of law when applied to their actions.

          You will be much better of in life, if you regard the state as a lawless extortionist, than something you have any obligation to.

          Most people who learn this, are not personally financially protected from it, the first time. Even Jews forget this from time to time, as was demonstrated in Europe 1933-1946.

          One reason the price of gold is so artificially high, is to aid the war on cash.

          $ 100.00 Oz gold bars are usable and tenable to hold. $1200.00 Oz value rapidly fluctuating gold bars are not.

          Russia, china, and the muslims ,are doing quiet well, at making the west, just as bad, as the Shitholes their general populations live in.

          Now that all land on the planet is under the control of draconian authority’s. General population humans, may be seeing the last vestages of a short lived period of freedom, disappearing in the west today.

          Slavery through debt, and state controlled electronic currency. Seems to be the future Plan.

          Many times in the past, plans for the masses have failed, although the failing is often a Horrendous affair, for the masses.

  22. 9 to 5 says:

    Sorry for the late comment..
    I am just one of many in the working class, I don’t have a fancy degree or anything but I feel like I have my share of common sense.

    The numbers our fine men in power keep on presenting sure look nice, oddly enough I can’t see it or feel it.
    For me this article makes more sense than almost anything that officials present for the masses.

    I was just wondering, in this age of rising inequality. I am not sure on any numbers, but isnt so that the top 1-10% gets like 70-80% of the growth..
    Is that something that future screwing up the numbers for the working class or is that already accounted for?

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