GDP Growth Rates for the USA and Germany (2019 Q3)
Although advance growth estimates were released previously, second estimates – which are released today – enable us to conduct a more confident analysis. According to the US Bureau of Economic Analysis (BEA), real gross domestic production (GDP) in the USA increased at an annual rate of 2,1% in the third quarter of this year. Last month’s advance estimate was 1,9% and complete data now shows that the economy is getting slightly better. The reason behind that is; positive contributions from personal consumption expenditures, private inventory investments, exports, residential fixed investment and federal/local government spending.
At the above graph, I have plotted the percentage change in GDP values both annually and quarterly. Figures are seasonally adjusted and chained to a reference year. Annual changes, which compares the data with the same quarter of the previous year, are represented with blue columns and quarterly changes are shown with a red line.
After having a good first quarter in 2019, with a solid 3,10%, the US economic growth fell down to a 2,00% rate in the second quarter. Third quarter’s growth rate shows a pick up from that point, but annualised data is still struggling with a continuing decline.
When it comes to the German economy, the scenario is still unpleasant but it is getting better. Due to optimism in global trade, with a possible compilation of Phase I on the trade deal between USA and China, German exports and manufacturing data had an upward move.
According to German Statistics Federal Office (DESTATIS), GDP growth rate increased 0,1% at the third quarter of 2019 after hitting the negative zone, with a minus 0,2% at the second quarter. For the annualised data of 0,5% growth, we can state that the economy definitely dodged the technical recession and is getting stronger.
As you can follow the similar patterns on both graphs that the best rates were in 2017, but since then we are on a downward trend. One striking difference on the other hand is that, it seems US economy has much room on growth and more distance to the negative area than her German counterpart.
Ergun UNUTMAZ, 27.11.2019