2 Center for American Progress | Economic Snapshot: December 2013
Economic growth lags behind previous recoveries.
Gross domesic produc, or GDP, increased in he hird quarer o 2013 a an inﬂaion-adjused annual rae o 3.6 percen. Domesic consumpion increased by an annual rae o 1.4 percen, housing spending subsanially grew by 13 percen, while business invesmen growh slowed o 3.5 percen. Expors increased by 3.7 percen in he ﬁrs quarer, and governmen spending was essenially ﬂa wih an increase o only 0.4 percen.
Te economy has now expanded by 10.2 percen rom June 2009 o Sepember 2013is slowes expansion during recoveries o a leas equal lengh.
Policymakers need o ocus on srenghening key pars o economic growh, paricularly invesmen and expors, wih argeed measures ha go beyond remov-ing ﬁscal uncerainy.2.
Improvements to U.S. competitiveness lag behind previous business cycles.
Produciviy growh, measured as he increase in inﬂaion-adjused oupu per hour, is key o increasing liv-ing sandards. U.S. produciviy has risen by 6.4 percen rom June 2009 o Sepember 2013, he ﬁrs 17 quarers o he economic recovery since he end o he Grea Recession.
Tis compares o an average o 11.4 percen during all previous recoveries o a leas equal lengh.
No previous recovery had lower produciviy growh han he curren one. Produciviy growh is he main driving orce or he counry’s abiliy o raise liv-ing sandards. Weaker produciviy growh han in he pas will make i harder o build a srong middle class, requiring policymakers’ atenion o inves in U.S. compeiiveness.3.
The housing market continues to recover from historic lows.
New-home sales amouned o an annual rae o 444,000 in Ocober 2013a 21.6 percen increase rom he 365,000 homes sold in Ocober 2012 bu well below he hisor-ical average o 698,000 homes sold beore he Grea Recession.
Te median new-home price in Ocober 2013 was $245,800, down slighly rom one year earlier.
Exising-home sales were up by 6 percen in Ocober 2013 rom one year earlier, and he median price or exising homes was up by 12.8 percen during he same period.
Home sales have o go a lo urher, given ha homeownership in he Unied Saes
GDP growth in recovery in comparison to previous recoveries
G r o w t h i n d e x ( l a s t q u a r t e r o f r e c e s s i o n = 1 0 0 )
Mar ’61Mar ’75Dec ’82Mar ’91Dec ’01Jun ’09Number of quarters of economic recoveryRecovery after the Great Recession
Source: Authors’ calculations based on U.S. Bureau of Economic Analysis,
National Income and Product Accounts
(U.S. Department of Commerce, 2013). Calculations only done for recoveries that have lasted at least four years.
Productivity growth in recovery compared to previous recoveries
0%2%4%6%8%10%12%1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17Average previous recoveriesCurrent economic recovery
Source: Authors’ calculations based on productivity growth (output per hour) from U.S. Bureau of Labor Statistics,
Current Employment Statistics
(U.S. Department of Labor, 2013).