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Buddy R Pacifico said...

2000 -> 2009

U.S. Lost Decade?

http://www.washingtonpost.com/wp-dyn/content/graphic/2010/01/01/GR2010010101478.html

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PeakTrader said...

U.S. Real Per Capita GDP in Business Cycles 1973-82 (long-wave bust period), 1982-90 (expansion), 1991-00 (expansion), 2001-07 (expansion, and 2001 recession so mild it wasn't a recession based on annual real per capita GDP).

1973 $23,200
1982 $25,280

1982 $25,280
1990 $32,112

1991 $31,614
2000 $39,750

2001 $39,773
2007 $43,482

The U.S. created 17.6 million jobs between 1993-98, and created only 3.7 million jobs between 2001-06. However, U.S. real GDP growth was only slightly higher from 1993-98 than from 2001-06. So, the U.S. became much more productive in the 2000s, i.e. using fewer inputs to produce more output.

Over a five-year period in the 2000s, U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth, two million houses a year were built, 16 million autos per year were sold, U.S. real GDP expanded 3% annually, in spite of 6% annual current account deficits (which subtract from GDP).

The U.S. economy was most efficient, while Americans stocked-up on real assets and goods, and capital was built-up. It was one of the greatest periods of U.S. prosperity, and in a structural bear market that began in 2000.

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Buddy R Pacifico said...

Peak Trader, If we are discussing a decade, rather then picking an interval within a decade (2001-2006), then the Decade Real U.S. GDP figure shrinks from 3% to 1.54% for 2000 to 2009.

http://www.measuringworth.com/growth/growth_resultf.php?begin%5B%5D=2000&end%5B%5D=2009&beginP%5B%5D=&endP%5B%5D=&US%5B%5D=REALGDP

Further, as my comment link above shows, household net worth fell 4% in the 2000s Lost Decade.

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PeakTrader said...

Buddy, a U.S. Lost Decade in the 2000s is an illusion.

A Lost Decade is possible starting after the economy peaked in Q4 2007.

U.S. net wealth:

US household net wealth rises
But remains below the record level set in Q3 2007.
15 June 2010

At the end of Q1 2010, the value of US household assets amounted to $68.53 trillion.

At the end of Q1 2010, the level of US total household debt was $13.97 trillion.

US net wealth now represents a very respectable 491% of household disposable income. The current ratio is actually exactly in-line with the long-term ratio, which dates back to 1952, although there have been times when the ratio has risen over 600%.

Overall the US consumer remains extremely wealthy by historical and international standards; despite the high level of debt.