Tuesday, October 30, 2012


Let's continue looking at GDP by focusing on PCEs.

First of all, overall PCEs are higher than their pre-recession levels and have been at that level for some time (top chart).  We also see a fairly steady increase in PCEs, with the YOY percentage change hovering around the 2% mark (bottom chart).

The chart above shows the percentage change in GDP since the end of the recession and PCEs contribution to that number.  Notice that PCEs are responsible for a fair amount of growth since the 3Q09.

Let's break the data down into its components.

Services comprise about 65% of PCEs.  The top chart shows steady growth since the recession ended, in addition to a level higher than its pre-recession levels (top chart).  However, the lower chart shows a slight slowdown in the pace of growth, with the YOY rate right around 2% coming out of the recession, but with a rate approaching 1% over the last few quarters.

Like services, real PCEs for non-durables are higher than their pre-recession levels (these comprise about 21% of expenditures).  However, notice these experienced a stall about a year ago for three quarters (top chart).  The rate of YOY growth has also slowed.  The pace of growth in this area was strong at the end of 2010 and beginning of 2011, but slowed at the end of last year, to below 1%.  It has picked-up over the last two quarters.

 Durable goods comprise the rest of PCE expenditures (obviously), accounting for 15%.  Like non-durables, these stalled about a year ago, but have since recovered.  What's interesting is the high YOY percentage growth rate of over 5% for the last 6 quarters -- a very strong rate of growth.