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 Gross Domestic Product

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gastaoss



Number of posts : 440
Registration date : 2007-07-01

PostSubject: Gross Domestic Product   Tue Oct 30, 2007 1:35 pm

Gross Domestic Product





Definition

Gross Domestic Product (GDP) is the broadest measure of aggregate
economic activity and encompasses every sector of the economy. Why Investors Care










Released on
10/31/07
For
Q3 Advance 2007








Real GDP - Q/Q change - SAAR





Consensus



3.2%




Consensus Range

2.5%
to
4.0%



















GDP price index - Q/Q change - SAAR





Consensus



2.0%




Consensus Range

0.8%
to
2.3%






























Consensus Notes


GDP
came in at an annualized 3.8 percent for the second quarter - a fairly
robust number. Strength was generally widespread outside of residential
investment. But the subprime mess and worse-than-expected housing have
been damping the consumer sector along with manufacturing. On the
positive side, business investment and exports are likely to keep
growth moderately positive for the quarter. But with subprime lending
problems now creeping into the overall economy somewhat, third quarter
GDP numbers are not as relevant as they would be otherwise. On the
inflation front, the GDP price index rose 2.6 percent annualized in the
second quarter, following a 4.2 percent jump in the first quarter.

Real GDP Consensus Forecast for advance Q3 07: +3.2 percent annual rate
Range: +2.5 to +4.0 percent annual rate

GDP price index Consensus Forecast for advance Q3 07: +2.0 percent annual rate
Range: +0.8 to +2.3 percent annual rate













Trends






Real GDP growth is always quoted at a quarterly annual rate. It
measures how much the economy has grown over a three-month period.
Quarterly growth rates are often volatile; consequently, economists
also like to look at the year-over-year growth in GDP. The yearly
changes tend to be more stable.























It is common to compare quarterly changes at annual rates in the GDP
deflator. These can be volatile, just like the quarterly swings in real
GDP growth; as a result, the trend in inflation is better determined by
year- over- year changes.










Data Source: Haver Analytics
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gastaoss



Number of posts : 440
Registration date : 2007-07-01

PostSubject: Re: Gross Domestic Product   Tue Oct 30, 2007 1:36 pm

Gross Domestic Product





Definition

Gross Domestic Product (GDP) is the broadest measure of aggregate
economic activity and encompasses every sector of the economy.




Why Investors Care?

GDP is the all-inclusive measure of economic activity. Investors need
to closely track the economy because it usually dictates how
investments will perform. Investors in the stock market like to see
healthy economic growth because robust business activity translates to
higher corporate profits. Bond investors are more highly sensitive to
inflation and robust economic activity could potentially pave the road
to inflation. By tracking economic data such as GDP, investors will
know what the economic backdrop is for these markets and their
portfolios.
The GDP report contains a treasure-trove of information which not only
paints an image of the overall economy, but tells investors about
important trends within the big picture. GDP components such as
consumer spending, business and residential investment, and price
(inflation) indexes illuminate the economy's undercurrents, which can
translate to investment opportunities and guidance in managing a
portfolio.
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