The iniital estimate of the real GDP growth rate for the second quarter will come out Friday morning, and it is useful to have a metric to put it in perspective. So, here's a letter grade scale:
- A - 5.4% or higher
- B - 3.5% to 5.3%
- C - 1.6% to 3.4%
- D - 0.1% to 1.5%
- F - 0.0% or less
This isn't a perfect scale, but it's a start.
I constructed this by taking real GDP growth rates from the first quarter of 1983 to the first quarter of 2005 (let's face it, few people remember anything macroeconomic before the 80s boom). I then converted them into percentiles. I then followed a grading curve that I was given in my first college course in 1981:
- A - 83rd percentile or higher
- B - 50th to 82nd percentile
- C - 17th to 49th percentile
- D - 6th to 16th percentile
- F - 5th percentile or lower
Note that this sort of scale shows some grade inflation: an average score will get you to the C+/B- borderline. Last quarter's 3.8% growth would have been a solid B- (which sounds just about right to me).