America in recession

I have been a fraction off in keeping my readers informed on the nature of the economy.  Below is a chart that shows the year, quarter, GDP of the U.S. and the inflation adjusted GDP.  I have been living in San Francisco where business was steady in late '08 and started growing in '09 for the entire year.  I called the rise in the stock market correctly in February '09 and the turn around of the economy at the same time.

One of my errors was looking at the GDP in current dollars.  The economic peak was August of '08 and the bottom was February '09. The drop was less than 3% over half a year. Insignificant by historic standards.

Trouble is, when we adjust for inflation, the downturn began in June '08 and lasted to the same February '09.  The drop, inflation adjusted was 4% over 8 months, still not much.

2007q4	14,337.9	13,391.2
2008q1	14,373.9	13,366.9
2008q2	14,497.8	13,415.3
2008q3	14,546.7	13,324.6
2008q4	14,347.3	13,141.9
2009q1	14,178.0	12,925.4
2009q2	14,151.2	12,901.5
2009q3	14,242.1	12,973.0
2009q4	14,463.4	13,155.0

As for the whole picture, I came across these charts in Forbes. which calls to my attention what we all know, that employment fell off more than in past recessions and has risen at a much slower pace (if it is rising at all) than in past recessions. Particularly slow for younger people, men and blacks.

 That tells me what I have been saying for some time.  We are now reaping the rewards of astounding increases in productivity that occurred in the past 15 years, which is why people with fewer skills are the ones who were laid off first and are being replaced last. 

The chart on fixed capital investment says two things: the same thing, major productivity gains occurred in the past, there aren't many highly productive investments available.

And, most importantly, the Federal stimulus package, which passed in mid-February 2009, passed after the bottom of the recession had happened....  the stimulus certainly used Federal dollars to compete with private dollars.  In short and in plain English, which we don't hear from the current liars in Washington,the stimulus package made the economy worse and the labor market much worse.