Good morning! Shall we talk about US Q4 GDP? It was gangbuster at 5.5% YoY (we use this to compare to Asian countries) or this is what Q4 2021 vs Q4 2020. Nominal GDP grew 11.7%YoY and so US nominal GDP expanded 10.2% in 2021.
Fed is still doing QE & rates are close to zero.👈
Fed is still doing QE & rates are close to zero.👈
I compare the quarterly %YoY chart here of the US nominal, US real and China real GDP. Note that as China decelerates towards 4% in Q4, US GDP accelerated to 5.5%.
Last year, the US grew 5.7% in 2021 vs 2020 (which fell -3.4% vs 2019) so a lot of it is making up for lost time.
Last year, the US grew 5.7% in 2021 vs 2020 (which fell -3.4% vs 2019) so a lot of it is making up for lost time.
US nominal GDP was USD22.99trn or USD23trn (good number to remember so when people say this is X% of GDP). And so it added 2.1trn or 10% in 2021 to total 23trn by end of the year.
Now what does that say about 2022? If consensus is right, going to be about 25trn by end of this yr
Now what does that say about 2022? If consensus is right, going to be about 25trn by end of this yr
Where did I get that estimate from (just did it in my head)? Well, consensus is forecasting 3.8% real growth for 2022, which is a deceleration from 5.7%. Fine, but CPI is still high at an average of 4.8% so that takes nominal roughly 9%. 23trn * 1.09 = roughly 25trn or another 2t
Mathematically, because the base is higher, the US is going to add the same level of nominal GDP in 2022 as 2021, if consensus is correct of a slowdown (still robust at 3.8%).
What does that mean? For China to catch up, its base is lower, it has to grow faster consistently!
What does that mean? For China to catch up, its base is lower, it has to grow faster consistently!
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