US Economy Actually Expanding, Robustly, Even

The New York Times, Wall Street Journal, MarketWatch, and The Guardian reported this week that US economic growth "stalled" at 0.2% during the first quarter of 2015.

This isn't inaccurate - but keep in mind that the 0.2% of growth was compared to the 4th quarter of 2014. Here's a chart:

Note that the first quarter of 2014 was even more harsh - we actually experienced an economic contraction, quarter/quarter, during the first three months of last year.

And yet that didn't matter in the broad context of 2014 at all, in which the US economy had a pretty good year. So instead of comparing each quarter to the previous quarter, what if we do an apples-to-apples comparison and look back at the first quarter of 2015 compared to the first quarter of 2014?

Not only does this paint a more accurate picture, but also a sunnier one, given that the US economy has grown an average of 2-3% per year for about the last three years.

Yet even annual comparisons can be misleading, since, as discussed previously, 1st quarter of 2014 was particularly bad. Here's the big picture:

Still strong, still healthy, still expanding. Last year our country was responsible for about $17.4 trillion of economic production, a full 22.5% of the world's $77.3 trillion.

Sure, there are some headwinds to face, as always. The Fed is likely to raise interest rates later this year. Currency effects are likely to slow the US down in 2015-2016, while these helped in 2013-2014.

But the economy didn't stall in the first quarter. Especially compared to the first quarter of last year.