In 2009, GDP (Gross Domestic Product) started to improve after four quarters of decline during the Great Recession. Nominal GDP for 2009 rebounded to $14.418 trillion. (This was the most recent BEA revision, released July 29, 2013. The 2011 BEA estimates were lower: $13.939 trillion in 2011 and $14.119 trillion in 2010.).
Here are the most recent GDP estimates for each quarter in 2009 (with the prior estimates in parentheses):
- Q1: $14,381 trillion ($13.893 trillion in 2011 revision, $14.049 trillion in 2010.
- Q2: $14.342 trillion ($13.854 trillion in 2011, $14.034 trillion in 2010.
- Q3: $14.384 trillion ($13.920 trillion in 2011, $14.114 trillion in 2010)
- Q4: $14.564 trillion ($14.087 trillion in 2011, $14.277 trillion in 2010).
What Was the GDP Growth Rate in 2009?:
GDP also refers to the GDP growth rate. This measures the changes in real GDP from quarter to quarter. In other words, the GDP growth rate measures economic growth. The ideal GDP growth rate is between 2-3%. Less than 2% will not create new jobs for the growing labor force. More than 3% means the economy is headed toward an asset bubble. This generally creates inflation and rising prices. Sometimes higher prices will cool off demand. More often, the bubble bursts, and the economy descends into recession. At that point, the economy contracts, and the GDP growth rate turns negative. Most estimates of economic production are nominal GDP. However, it's important to take out the effects of price increases, which is done in real GDP. Growth rates use real GDP to compare growth from one quarter to the next.
In 2009, the GDP growth rate was -2.8%. In other words, the economy contracted 2.8%. (Note: This is the most recent estimate by the BEA, released on July 29, 2013. It was better than the prior estimate of -3.5%, released in 2011 and the 2.9% revision, released in 2010.) Here's the most recent GDP growth rate for each quarter in 2009 (The prior estimates are in parentheses):
- Q1: -5.4% (-6.7% in 2011, -4.9% in 2010)
- Q2: -0.4% (-0.7% in 2011 and in 2010)
- Q3: 1.3% (1.7% in 2011, 1.6% in 2010)
- Q4: 3.9% (3.8% in 2011, 5% in 2010)
The Economic Stimulus Package, which was approved in March 2009, stimulated the economy enough to pull it out of recession in Q3. The remarkable Q4 growth rate of 3.8% is typical as an economy bounces out of recession. Businesses generally let their inventory run low when demand is low. They must quickly restock, spiking GDP.
2009 GDP for the Year: -2.8% (2012 revision was -3.1%, 2011 was -3.5%, 2010 was -2.9%, Original estimate was -2.4%)
Q1: -5.4% (2012 revision was -5.3%, 2011 was -6.7%, 2010 revision was -4.9%, 2009 revision was -6.4%)
- Advance - The economy fell 6.1%, partly due to leaner inventories. The was the third declining quarter in a row, and the fourth since the recession began in Q4 2007. The slowdown in Q1 was only slightly less than the 6.3% drop in Q4 2008. This is the first time since the Great Depression that GDP fell more than 5% for two quarters in a row. The (very faint) silver lining is that a large contributor to the decline was a decrease of business inventories. This means that inventories are getting lean, potentially boosting production next quarter if orders hold steady. The decrease of business inventory contributed 2.79 points to the Q1 decline and .11 in Q4. When inventories are taken out of the calculations, Q1 GDP fell 3.4% compared to 6.2% in Q4 2008. However, the near-bankruptcy of the U.S. auto industry contributed 1.36 percentage points to the Q1 decline and 2.01 points to the Q4 2008 decline. Another contributor was the fall-off in commercial construction.
- Second - The economy contracted 5.7% in Q1. The slump in U.S. car sales contributed 1.36 percentage points to the Q1 decline and 2.01 points to the Q4 2008 decline. Another contributor was the fall-off in commercial construction.
- Third - Growth was down 5.5%. The economy contracted more than 5% for two quarters in a row, the first time since the Great Depression.
- Advance - Government spending propped up the economy, which contracted 1% -- the fourth contraction in a row and the fifth since the recession started in 2007. U.S. car sales are improving, and will further improve in Q3 with the Cash for Clunkers program. Government stimulus is propping up the economy and keeping this recession from turning into a depression. However, a return to normal bank lending is needed for a full recovery.
- Second - In a very unusual move, the BEA did not adjust its estimate, which remained at -1%. The slump would have been much worse without the Economic Stimulus Program. Government spending contributed 1.25% to GDP growth, according to Econompic.
- Third - The economy declined .7% in Q2 2009.
- Advance - The economy grew 3.5%, which meant that technically the recession was over.
- Second - Growth was revised down to 2.8%. More data came in over the last month, which showed that commercial real estate and personal spending wasn't as strong as initially estimated.
- Third - Growth was revised down to 2.2%.
- Advance - The economy grew 5.7%, but half of that growth was based on businesses re-stocking low inventory. The economy would have only grown 2.3% without the inventory adjustment, according to econo-blogger Calculated Risk. Real estate and consumer spending actually slowed in Q4. These are needed to sustain any lasting recovery.
- Second - Economic growth was revised up to 5.9%, but businesses re-stocking low inventory drove 4 points of that growth. Econo-blogger Calculated Risk points out that:
Changes in private inventories are transitory (only lasts a few quarters at the start of a recovery), and although the headline number was revised up, final demand was weaker than in the advance estimate.He goes on to note that spending on personal consumption and residential investment were both revised down in Q4.
- Third - The report said 5.6% growth, but after taking out restocking of low inventory, the real number was 1.8%.
More GDP by Year
For earlier years, see U.S. GDP History