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GDPResearch: Trends in Real Gross Domestic Product

Grossdomestic product GDP is considered as one the chief indicators beingutilized to assess the status of a country`s economy. Itcharacterizes the over-all dollar value of the entire products andservices manufactured over a certain time period. As an individualcan visualize economic manufacture and development, what GDPexemplifies has a great effect on almost every person within thateconomy. When GDP is at its best performance, there is lesser numberof unemployed individuals and wages increase. On the other hand, whenGDP is low, there is greater number of unemployed workers and thewages become stagnant. It is not difficult to realize why a pooreconomy generally signifies lesser revenues for companies, which inturn signifies lower stock values. A vital transformation in GDP,either up or down, typically has a substantial impact on the stockmarket. Stockholders are really anxious with regards to negative GDPprogress, which is one of the aspects that economists utilize toidentify whether a country’s economy is in a recession. GDP percapita is every so often deliberated as a sign of a country’saverage living.

Accordingto the data released by the Bureau of Economic Analysis, real grossdomestic product (GDP) showed an increase of 2.6 percent during thelast quarter of 2013, based on the “third” estimate published bythe Bureau of Economic Analysis. The expansion rate was 0.2percentage point greater compared to the “second” estimatepublished in February 2014. During the third quarter, there was a 4.1percent expansion rate.

Fourth-quarterGDP brings to light consumer spending increased of 3.3 percent, thehighest recorded since the last quarter of 2010. Consumer spendingmirrored the expenses on health care, housing and utilities, as wellas accommodations and food services. During the third quarter, therewas a 2.0 percent increased in consumer spending. Exports likewiseincreased during the last quarter of 2013. These increases wereoffset everby a recession in inventory investment, a greater reduction infederal government spending and a recession in housing investment.

Theupward adjustment to real gross domestic product growth mirrored theamalgamation of newly accessible source data. Consumer spending wasadjusted up particularly the services, whereas business investmentparticularly intellectual property products, as well as inventoryinvestment were adjusted down.

Asfor real disposable personal income (DPI) or personal income revisedfor taxes and inflation, there was an expansion rate of 0.8 percentduring the last quarter of 2013 compared to a 3.0 percent expansionrate during the third quarter. Personal saving as a percentdisposable personal income had an expansion rate of 4.3 percentduring the last quarter compared to a 4.9 percent expansion rateduring the third quarter of 2013.

Fromthe figure shown above, the last quarter of 2011 showed the mostsignificant growth in real gross domestic product while the firstquarter of 2011 showed the least significant growth in real grossdomestic product. The data implies that the economy is thrivingdespite some hindrances such as the reduction in the GDP last quarterbrought about by ‘temporary’ factors. The consumption functiontells us that as income rises, consumption rises more slowly thanincome. Induced consumption expenditures are influenced primarily byincome. The United States have been consuming too much and saving toolittle. Throughout 2014, real gross domestic product is expected toshow improvement during the second and third quarter and will startto decrease again on the last quarter of the year.

Sources:

Bea.Gov.&quotGDP GROWTH SLOWS IN FOURTH QUARTER.&quot&nbspBea.gov,2014. Web. 31 Mar 2014.http://www.bea.gov/newsreleases/national/gdp/2014/pdf/gdp4q13_3rd_fax.pdf

Bea.Gov.&quotNews Release: Gross Domestic Product.&quot&nbspBea.gov,2014. Web. 31 Mar 2014.http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

Yamarone,Richard. &quotGross Domestic Product.&quot&nbspTheTrader`s Guide to Key Economic Indicators, Third Edition,(2012): 11–46. Print.