The recovery from Great Recession has seen drag from state and local spending: Average contribution to annual GDP growth from state and local consumption and investment spending across business cycles, measured from peak to peak and for first three years after trough

Peak to peak Trough through first 3 years
1960s 19.6% 29.7%
1980s 6.2% 10.6%
1990s 4.7% 6.8%
early 2000s 9.7% 11.6%
later 2000s 3.7% -12.0%

Notes: Blue bars measure the average annual contribution of S&L spending to GDP growth across the entire business cycle (from peak to peak). Red bars measure the average annual contribution from the recession’s trough through the first three years of recovery. The precise peak-to-peak business cycles peaks corresponding to each set of bars are: (1960s) 1960Q2–1969Q4; (1980s) 1980Q1–1990Q3; (1990s) 1990Q3–2001Q1; (early 2000s) 2001Q1–2007Q4; and (later 2000s) 2007Q4–current (2019Q2). The business cycle troughs are: 1961Q1, 1982Q4, 1991Q1, 2001Q4, and 2009Q4.

Source: Author’s analysis of data from the Bureau of Economic Analysis National Income and Product Accounts (NIPA), Table 1.1.2

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