Gross Domestic Product (or known as GDP), is defined as, “aggregate output as the dollar value of all final goods and services produced within the borders of a country during a specific period of time, typically a year” (McConnell, Brue, & Flynn, 2012). This measures the value of the output in monetary terms, and you can check current trends of the GDP by taking a look at the Bureau of Economic Analysis website. Today, we are taking a look at the “Release Highlights” link to check the most current trends within the GDP.
In the BEA release highlights document, you can see an increase if the GDP within the third quarter, which allows corporate profits to pick up. The document states that “increased 3.1 percent in the third quarter of 2012 after increasing 1.3 percent in the second quarter, according to estimates released by the Bureau of Economic Analysis. The third-quarter growth rate was revised up 0.4 percentage point from the second estimate released in November” (2012, bea.gov). Within the highlights, it mentions how the main driver of the acceleration within the third quarter was due to inventory investment. Consumer spending for durable goods in the third quarter also picked up, as well as motor vehicles and parts turned up. Another highlight was the Federal national defense spending rebounded, as did state and local government spending. Profits of financial corporations also raised 17.5 percent in the third quarter, whereas profits of nonfinancial corporations fell 1.3 percent, with profits from the rest of the world decreased 1.9 percent.
The time period that shows the most significant amount of growth of GDP in the document would have to be from 2008-2009. In the document, it shows that in the final quarter of 2008, GDP in the US was at an all-time low, due to the economic recession. The percentage of growth was almost -10 percent. But as 2009 was progressing (with President Obama now just taking office), you see in the chart that by the end of...
Cited: * McConnell, C., Brue, S., & Flynn, S. (2012). Macroeconomics: Principles, Problems and Policies, Nineteenth Edition. McGraw-Hill Companies, Inc.
* (December 20, 2012). GDP GROWTH ACCELERATES IN THIRD QUARTER. Bureau of Economic Analysis. Retrieved on January 25, 2013 from http://www.bea.gov/newsreleases/national/gdp/2012/pdf/gdp3q12_3rd_fax.pdf
* Kearns, Jeff. (October 15, 2012). Business Economists Reduce U.S. GDP Growth Forecasts. Bloomberg. Retrieved on January 25, 2013 from http://www.bloomberg.com/news/2012-10-15/business-economists-reduce-u-s-gdp-growth-forecasts.html
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