GDP collapse puts U.S. economy into recession red zone

by alexvanbuskirk

GDP collapse puts U.S. economy into recession red zone

By James Pethokoukis @ AEI (September 27, 2012)

GDP growth for the second quarter was revised down to 1.25%.

U.S. economic growth is dangerously slow. I’ve frequently written about research from the Fed which 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.

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