A little less than six months ago, the Bureau of Economic Analysis reported that real GDP for last year’s second quarter in the US had regained its pre-COVID high set back in the fourth quarter of 2019. The announcement seemed somewhat perplexing given that many in the public had been led to believe the American economy was on fire; Warren Buffett had even declared it “red hot.”
Therefore, taking six quarters, a year and a half just to get back to where we started might have seemed troublesome, perhaps even a bit of a contradiction to the widely reported glowing inflationary fires the first half of 2021.
In reality, the situation was even more troublesome than that. It still is, by the way. During last year’s third quarter (the latest data), the US economy only added a few percent more, way less than expected leaving estimated total output (at a seasonally-adjusted annual rate) not even 1.5% better than that prior Q4 2019 top.