Negative GDP in the last quarter?

Click to enlarge

Following our previous analysis on the relationship between new domain registrations and economic growth we’ve done some more research which, possibly, shows that new dot-com registration may be a leading indicator of both World and USA GDP changes. The left hand scale is GDP change & the right dot-com registrations change.

We’ve looked at the change in quarterly dot-com registrations from 2005 on an annualised basis and compared these with quarterly annualised GDP figures for the US & the World (see below).

Looking at some history first:

  •  Quarter 3 2007 – Dot-com registrations go negative and remain so for 6 consecutive quarters. World GDP goes negative 4 quarters later and remains negative for 6 consecutive quarters. US GDP dips into negative territory for one quarter and then after 4 quarters goes negative for a further 4 quarters.
  • Quarter 3 2009 – Dot-com registrations go positive and remain so for 3 consecutive quarters. World GDP goes positive 2 quarters later & has remained in this territory for the following 7 quarters. US GDP went positive in the same quarter & has remained so for 9 quarters.

Looking now to the current  (quarter 4 2011) situation.

As previously mentioned new dot-com registrations are basically flatlining & this trend continued in November.

The source (Hosterstsats) for January registrations have not yet published their 1 January 2012 snapshot (which is our basis for December registrations) but historically since 2005 December, on average,  has been about 4.4% less than November. If this recurs, or if the % is greater, then the quarters dot-com registrations will, just, be in negative territory.

If this happens then this will be the 3rd consecutive negative quarter. In recent history the last time this happened was in Q1 2008 when US GDP went negative.

We shall wait & see!

Sources

Dot-com registrations Hosterstats

US GDP US Department of Commerce - Bureau of Economic Analysis

World GDP This information was obtained from  The Economist. As the data is not provided it has been  “read”  from this graph which starts in Q2 2007).

 

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