(April 2016) The U.S. economy is in the seventh year of expansion1 since the Great Recession ended in June 2009.2  The duration of the expansion is fourth longest in the postwar era.3  Yet key economic indicators suggest the recovery is weak by historical standards.  These indicators are Gross Domestic Product, payroll employment, and U.S. industrial production.


Gross Domestic Product


Real GDP is the inflation-adjusted production value of the nation's goods and services less the value of the goods and services used in production.4  GDP has expanded at a 2.1% average quarterly rate in the current expansion versus the 3.2% postwar average.5 Real GDP grew at a 2.7% rate in the previous expansion (November 2001-December 2007).


Payroll Employment


Nonfarm payroll employment, like GDP, is a broad economic indicator.  It has increased at a 1.4 % annual rate versus the 3.6% postwar average.6


U.S. Industrial Production


Industrial production measures the physical output of factories, mines and utilities.  It peaked in November 2014 and has contracted in 14 of 16 subsequent months, an unprecedented event in a postwar expansion.7




Key indicators suggest the expansion is weak by postwar standards.


-- Greg Kaza

1  Expansion is the natural state of the U.S. economy in the postwar era.

2  National Bureau of Economic Research (Cambridge), "U.S. Business Cycle Expansions and Contractions." http://www.nber.org/cycles.html

3  Three expansions had longer durations.  These occurred from March 1991 to January 2001 (120 months); February 1961 to December 1969 (106 months); and November 1982 to July 1990 (92 months).

4  http://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

5  U.S. Bureau of Economic Analysis, U.S. Economic Accounts. "GDP, Percent change from preceding period."  www.bea.gov

6  U.S. Bureau of Labor Statistics, "Employment, Hours, and Earnings from the Current Employment Statistics survey (National), Total Nonfarm Employment." www.bls.gov

7  Federal Reserve System, "G-17 Release, Industrial Production & Capacity Utilization"