PeakTrader.com

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http://www.ism.ws/ISMReport/NonMfgROB.cfm?navItemNumber=12943

PeakTrader said...

That's an interesting report. Yet, even with a smaller current account deficit as a percentage of GDP (from 6% to 4%), which adds to GDP (since less negative net exports is positive), GDP is very low.

The Legacy of the Great Recession
March 1, 2011

In the fourth quarter of 2010, the demand for goods and services (actual GDP) was about $822 billion (5 percent) less than what the economy was capable of supplying (potential GDP).

When expansions are well underway, after recessions, actual and potential GDP are roughly equal and sometimes actual GDP exceeds potential GDP.

The Output Gap
January 19, 2011
Paul Krugman

"...there will be a $2.9 trillion gap between what the economy could produce and what it will actually produce (over four years; 2008-2009-2010-2011, based on real output).