Earlier today we learned that the Second Estimate for Q4 2014 real GDP came in at 2.2 percent (rounded from 2.19 percent), down from 2.6 percent in the Advance Estimate. Real GDP per capita was lower at 1.4 percent (rounded from 1.43 percent), down from 1.85 percent in the Advance Estimate.

Here is a chart of real GDP per capita growth since 1960. For this analysis I've chained in today's dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis, which date from 1959 (hence my 1960 starting date for this chart, even though quarterly GDP has is available since 1947). The population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the highlighted contractions have the same relative scale.

I've drawn an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than long-term trend. In fact, the current GDP per-capita is 9.1% below the pre-recession trend but fractionally higher than the 9.8% below trend in Q1 of this year.

The real per-capita series gives us a better understanding of the depth and duration of GDP contractions. As we can see, since our 1960 starting point, the recession that began in December 2007 is associated with a deeper trough than previous contractions, which perhaps justifies its nickname as the Great Recession.

**Quarterly GDP Compounded Annual Rate of Change**

The standard measure of GDP in the US is expressed as the compounded annual rate of change from one quarter to the next. The current real GDP is 2.2 percent. But with a per-capita adjustment, the data series is currently at 1.4 percent. Both a 10-year moving average and the slope of a linear regression through the data show that the US economic growth has been slowing for decades.

How do the two compare, GDP and GDP per capita? Here is an overlay of the two in the 21st century.

To expand on the illustration above: Since 1960 mean (average) GDP is 3.1 percent. Mean GDP per capita is 2.1 percent.

**Year-Over-Year (YoY) GDP Percent Change and Recession Risk**

Economists and financial journalists vary widely in their opinions about the current level of recession risk. The official call on recessions, of course, is the domain of the National Bureau of Economic Research, which makes the determination on recession start and end several months — sometimes more than a year — after the fact.

GDP per capita, as we've seen, is a weaker series than GDP. What does it suggest about our current recession risk? The next chart shows the YoY change in real GDP per capita since 1960. I've again highlighted recessions. The red dots show the YoY real GDP for the quarter before the recession began, and the dotted line gives us a sense of how the current level compares to recession starts since 1960. This chart suggests that, despite chronic weakness in the economy, this indicator higher than six of the eight quarters during which recessions began. That said, we must remember that GDP is a heavily revised lagging indicator.

As the chart illustrates, the latest YoY real GDP per capita, at 1.66% is higher than the level at the onset of all the recessions in this series with two exceptions — the recession triggered by the 1973 Oil Embargo and the second and more painful half of the early 1980's double dip. That second case was a outlier in that it was to some extent knowingly engineered by the Fed (then Chairman Paul Volcker), an inevitable side-effect of raising the Fed Funds Rate above 19 percent to break the back of the stagflation of the era. Here is a snapshot that illustrates the extreme Fed maneuver.

I'll update these charts when the Third Estimate of Q4 GDP is released next month.