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InsiderOnline Blog: September 2012

The Party Never Got Started

On Thursday, the Commerce Department revised GDP growth for the second-quarter downward to 1.25 percent, which suggests a recession is coming, says James Pethokoukis:

[R]esearch from the Fed […] finds that since 1947, when two-quarter annualized real GDP growth falls below 2%, recession follows within a year 48% of the time. And when year-over-year real GDP growth falls below 2%, recession follows within a year 70% of the time.

Citigroup has also taken a shot at determining the stall speed: “Specifically, when U.S. growth has cut below 1½ percent on a rolling four-quarter basis, it has tended to fall by nearly 3 percentage points over the following four quarters, and the economy has typically entered recession. [AEIdeas, September 27]

Posted on 09/27/12 04:44 PM by Alex Adrianson

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