ECONOMIC INDICATORS
Scott Wallace, Ph.D. Director and Editor, CBEI; Professor of Economics School of Business and Economics
With the number of vaccinations increasing and number of new COVID-19 cases falling, the economy appears to be poised for take-off. Fueled by government assistance and increased consumer savings, consumption is likely to be a leading driver in the upcoming expansion. Wisconsin as a whole has weathered the COVID-19 storm better than most states.
National Economic Statistics Table 1 Key Economic Indicators 2021 First Quarter
% ∆ Yr. Ago +2.3% +0.4% +1.0% +2.6%
Nominal Gross Domestic Product (in Billions) Real Gross Domestic Product (in Billions) Industrial Production (2012 = 100) Consumer Price Index (1982 - 84 = 100)
$22,048.9 $19,087.6
$105.6 $264.9
Description: • Nominal Gross Domestic Product (in Billions): The dollar value of all final goods and services produced in a year, using current prices • Real Gross Domestic Product (in Billions): The dollar value of all final goods and services produced in a year, using prices from a base year (2012) to adjust for inflation. • Industrial Production Index: Measures the changes in the volume of output (as a percentage of actual output in 2012) produced in the United States in manufacturing, mining, and electric & gas utilities. • Consumer Price Index: Measures the average monthly change in the price of a representative basket of goods and services bought by consumers. Analysis: • The First Quarter Real GDP number indicates that the economy is approximately where it was a year ago when the coronavirus emerged in March 2020. This certainly indicates a significant improvement over the last several quarters. The economy is still slight smaller as measured by Real GDP than it was in the third and fourth quarters of 2019 and certainly below trend. • The Industrial Production Index number increased by 1.0 % relative to one year ago to 105.6 but still remains below pre- pandemic levels. • Prices have jumped 2.6 percent since last year, raising concerns of rising inflation. Food and energy price increases primarily were responsible for higher overall prices. The Federal Reserve sees the rise in inflation numbers as reflecting “transitory factors” such as supply chain disruptions (April 28, 2021). The Federal Reserve’s goal is to maintain a 2.0% inflation rate over the long run. Until recently, inflation rates were persistently lower than 2%.
Central Wisconsin Report - Fall 2020
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