The U.S. Federal Reserve released its latest Flow of Funds report for the U.S. economy on 10 March 2016. Let's run through a short checklist to see what it tells us of the relative health of the U.S. economy....
Falling or negative acceleration of private sector debt?
Check.
Falling real GDP growth rate?
Check.
Let's go to the chart....
If you look closely at the latest data in the chart above, there is reason for optimism. The rate at which the acceleration of private sector debt in the U.S. is falling is itself decelerating, or at least it was through the final quarter of 2015. That positive jerk (or impulse), if sustained, points to a higher real GDP growth rate for the U.S. economy in the near future.
Previously on Political Calculations
- The Position, Velocity and Acceleration of Private Debt in the U.S.
- The Correlation Between Decelerating Debt and Falling GDP
- QE and the Acceleration of Private Debt in the U.S.
- Private Debt Decelerates in 2015Q3, Real U.S. GDP Follows
Data Sources
U.S. Federal Reserve. Data Download Program. Z.1 Statistical Release (Total Liabilities for All Sectors, Rest of the World, State and Local Governments Excluding Employee Retirement Funds, Federal Government). 1951Q4 - 2015Q4. [Online Database]. 10 March 2016. Accessed 10 March 2016.
U.S. Bureau of Economic Analysis. Table 1.1.1. Percent Change from Preceding Period in Real Gross Domestic Product. 1947Q1 through 2015Q4 (second estimate). [Online Database]. Accessed 10 March 2016.
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