2007 GDP Information
The Bureau of Economic Analysis is the federal agency tasked with providing the overall "health check" of the U.S. economy, and it produces this report, the report on the Gross Domestic Product, every calendar quarter. The BEA's GDP figures are important financial news, as they are the primary indicators as to whether or not the US economy is in a recession, a recovery or a period of strong economic growth.
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2007 Overall GDP Numbers
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From the end of the fourth quarter of 2006 through the end of the fourth quarter of 2007, the US GDP rose from 13.75 trillion dollars to roughly 14.25 trillion dollars, a net annual increase of around 3.5%. On the quarterly breakdown, the increases ran at 0.5% for the first quarter, 3.6% for the second, 3.0 for the third and 1.7% for the fourth quarter. The inter-year inflation adjustment for 2007 was 106.23; when the figures are adjusted for inflation, the GDP growth was much lower than the raw data indicates. The increase was from 12.96 trillion dollars to 13.21 trillion dollars, a net increase of 1.9%.
2007 GDP Expenditures by Sector
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The single largest category in calculating GDP is private expenditure, shown on financial news as "consumer spending." In 2007, it broadly hovered between 9.6 trillion dollars in raw numbers to 9.9 trillion dollars in the fourth quarter. Private domestic investment (the factor of GDP that's derived from businesses spending money on new equipment and capitalization) remained flat, bouncing between 2.25 and 2.3 trillion dollars each quarter. By way of comparison, the sum total GDP for discretionary expenditures by all levels of the U.S. government (state and federal combined) rose from 2.6 trillion to 2.8 trillion.
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Government Deficits in 2007
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The government's "official" expenditures (tax revenue minus congressional expenditures) totaled 2.8 trillion dollars by the end of the year. However, total government expenditures (including mandated payouts from deferred savings programs like Social Security, and U.S. debt services) tallied to 4.84 trillion dollars on net revenues of 4.23 trillion dollars, a shortfall of .61 trillion -- or 610 billion -- dollars. The single largest line item in government expenditures was the 187 billion dollars used to service the US debt, paying interest to US savings bond holders.
Contrasts With 2008
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In the third quarter of 2008, and into 2009, the world financial markets largely imploded as the credit default swap and mortgage backed securities bubbles burst. These caused an overall drop in US GDP of roughly 2% per quarter, and raised the total budget deficit -- due to both reduced tax revenues and increased expenditures to bail out corporations suffering a liquidity crisis, plus economic stimulus spending -- of 1.1 trillion dollars. By 2009, the annual government shortfall on the US budget was 1.3 trillion dollars. More disturbingly, the cost of servicing the US debt had more than doubled to 388 billion dollars, at historically low interest rates.
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References
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