Chart of U.S. GDP
Chart of U.S. GDP

The U.S. Bureau of Economic Analysis reported this morning that the economy expanded at an annualized rate of 1.7 percent in the second quarter, much faster than the consensus forecast of 1.0 percent.

Growth looks even less impressive when you step past the noisy quarterly numbers and focus instead on the 12-month changes. As you can see in the chart below, the economy only grew by 1.4 percent since the middle of last year -- the slowest pace since the recovery began more than three years ago.

Chart of U.S. GDP
Chart of U.S. GDP

A new analysis from the Federal Reserve Bank of Dallas provides a broader perspective on the weakness of this recovery and the damage caused by the crisis. They estimate that the shortfall in GDP from 2008 through 2023 amounts to about $10 trillion in today's dollars.

The shortfall in spending on non-durable goods and services suggests an even bigger decline in people's expectations of future earnings. While this calculation is sensitive to assumptions about the sustainability of pre-crisis consumption patterns, the Dallas Fed economists' baseline conclusion is still striking. According to them, "the fall in consumption implies that households revised down their expectations of discounted future income by $30.2 trillion." As they note, this is "an enormous amount."

Measures of spending only capture some of the costs of the crisis. Job loss and heightened fears about future job loss are psychologically taxing. Prolonged unemployment permanently reduces future earning power, to say nothing of the emotional impact of being jobless in a society where social status is often defined by one's work. Moreover, "unemployment is also associated with worse physical health" because it raises stress. This leads the Dallas Fed economists to conclude that their $10 trillion estimate "drastically understates the true cost of the crisis."

We have known for some time that the recovery was underwhelming. As the Dallas Fed's analysis makes clear, the latest GDP data do nothing to change that.

(Matthew C. Klein is a writer for Bloomberg View. Follow him on Twitter.)