Analyzing U.S. GDP and Economic Trends

Analyzing U.S. GDP and Economic Trends

When estimating U.S. GDP, you have to factor in about $2 trillion in budget deficits, so it would be inappropriate to talk about "phenomenal sustainability."

To be fair, it should be noted that the budget deficit is primarily spent not on personal consumption but on interest payments, bank bailouts, defense, and pensions.

The possibility of underestimating inflation must also be considered.

Nevertheless, the result is impressive given the context of the situation - the COVID crisis in 2020, the worst inflation crisis in 40 years from 2021 to 2022, a debt crisis in 2022 that is not expected to be sustained in 2023, and extreme increases in the cost of debt service starting from 2023.

Impressive U.S. GDP Growth

Despite all of these challenges, U.S. GDP growth for one year (Q4 2023 to Q4 2022) will be 3.1%, for two years it will be 3.8%, and for the period through Q4 2019, GDP growth will be 8.2%, matching the historical 10-year trend from 2010 to 2019.

Household consumption is growing at 2.6% year-on-year, plus 3.8% over two years, and plus 10.5% in four years, even slightly ahead of the 2010 to 2019 trend.

Investment is performing slightly worse: up 1.8% year-on-year, down 0.6% over two years, and up 9.5% from Q4 2019.

The share of consumption remains stable at 69%, up 1.5 percentage points from 2017-2019, while the share of investment in GDP is 18%, unchanged since pre-consumer times. The same is true for government consumption.

Conclusion

According to official statistics, no crisis is expected. Usually, investments are the first to react to the deterioration of the economic situation, but everything is stable here as well.

Table of contents
  1. Impressive U.S. GDP Growth
  2. Investment Trends
  3. Conclusion