The Long Decline in Per Capita GDP Growth

This article was last updated on April 16, 2022

Canada: Free $30 Oye! Times readers Get FREE $30 to spend on Amazon, Walmart…
USA: Free $30 Oye! Times readers Get FREE $30 to spend on Amazon, Walmart…While economic growth in the United States is looking fairly robust as shown on this graph:

 
…in fact, if we look at GDP corrected for inflation and on a per capita basis, it is quite clear that the economy has not really done all that well since the end of the Great Recession.
 
Here is a graph from FRED that shows real domestic growth per capita since 1948:
 
You will notice that there was a significant drop in real per capita GDP during the Great Recession, in fact, per capita real GDP dropped from a peak of $49,506 in the third quarter of 2007 to a low of $46,781 in the second quarter of 2009, a drop of 5.5 percent.  Since then, it has recovered to $50,805 in the third quarter of 2014, the latest quarter for which data is available.  This works out to an increase of 8.6 percent from the 2009 low point.
 
While this looks relatively healthy, there is another way to look at the data.  Since the standard measure of GDP in the United States is expressed as the compounded annual rate of change from one quarter to the next, let's look at the per capita real GDP in those terms as shown on this graph from FRED:
 
When we look at economic growth in these terms, the latest recovery certainly doesn't look quite as healthy as it did after previous recessions.    
 
Here is a table that provides the average compounded annual rate of change of per capita real GDP for each of the periods between recessions since 1961:
 
 
 
Here is the same data in graphic form:
 
 
It is interesting to note that after each recession since the recession of 1974, the per capita annual growth rate of real GDP has dropped, hitting a multi-decade low since the Great Recession.  This quite clearly shows us that United States economic growth rates have been slowing for decades.
 
While we are all aware that GDP data is one of the most heavily revised lagging indicators, a brief look at the history of GDP per capita shows us that this recovery has been far more modest than any recovery in the past five decades, no matter how often the data is revised. 
 
Click HERE to read more of Glen Asher's columns
Share with friends
You can publish this article on your website as long as you provide a link back to this page.

Be the first to comment

Leave a Reply

Your email address will not be published.


*