Gross Domestic Product Trends and Issues


GDP grew at an annualized rate of 2.0% in Q2 2019. Continued growth compared to the 2.3% average growth in GDP since Q1 2010. This growth over prior quarter took place as the age of the current economic recovery through September 2019 is now 123 months in length and ties the longest in recent history.

Forecasts for GDP growth over the next few years suggest sub 2% levels. Slower growth appears to be theme.

In reviewing details on the components of GDP in the graphs and tables below, the open question remains:

Which components of GDP can produce above expectation and above historical trendline growth such that these expectations of low GDP growth can be exceeded and the economic expansion can continue?

SEPTEMBER 2019 - Economic expansion reaches 123 months and becomes longest in U.S. history!


GDP Component Levels and QoQ Growth Rates: Services is the largest component of GDP with a growth rate this quarter of 2.7%.

Highest growth areas this quarter were in: National Non-Defense - 15.2%, Durable Goods - 12.4%, National Defense - 3.3%, and Non-durable Goods - 6.3%.

GDP Component Contribution to QoQ GDP Growth: This chart shows the contribution to GDP growth this quarter by key components.

This contribution essentially weights the GDP share of the component and its growth rate this quarter.

For Q2 2019, net exports and change in inventories reversed course from Q1 as expected and weighed negatively on GDP growth. Business investment in both Structures and Equipment were negligible contributors this quarter - a sign of business concerns about the future prospects of the economy. And Residential Fixed Investment turned negative this quarter in its contribution to GDP growth.

Primary contributors to this quarter’s growth were Services, Durable Goods and Non-durable Goods.