10: Gross Domestic Product Report (Part 1) - ECONOMIC REPORTS FOR ALL MARKETS
This is the 10th video in a series on economic reports created for all markets, or for those who simply have an interest in economics. In this lesson we cover the Gross Domestic Product Report.
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Link to the GDP Report:
http://www.bea.gov/national/index.htm#gdp
Text from video:
The GDP report measures the output of goods and services produced by labor and property located in the United States. In other words, it measures the total economic production of the economy.
If you have not already done so, I invite you to stop this video and watch my overview video on the GDP in the basic economics section.
The GDP report is released quarterly by the Bureau of Economic Analysis. I'll post a link for the report in the text next to the video.
The GDP report is the largest, most comprehensive report on the economy. While other reports focus in on individual sections, the GDP report looks at the entire economy.
Economists use the GDP report to gauge growth in the economy.
GDP expands when production increases.
The increase in production creates jobs.
The increase in jobs increases income.
Some of this additional income will be spent increasing corporate income and profit.
Some of this additional income will be deposited into banks which is then loaned out.
This in turn causes more increases in production.
However, increases in production can also lead to inflation and higher interest rates.
GDP contracts when production decreases.
When companies produce less, they need less employees.
Higher unemployment means people earn less and spend less, causing corporate income and profits to drop.
The Government, the Fed and the Treasury use fiscal policy and monetary policy to try and maintain a rate of slow expansion of the GDP which benefits the country in many ways including creating jobs.
However, they have to keep the GDP from expanding too slow, or contracting, because it increases unemployment, and they have to keep the GDP from expanding too quickly because it causes inflation.
Also, because the labor force in the US is growing, the GDP must expand at a rate of about 3% per year or more, or the unemployment level will increase.
The GDP is reported in both current dollars and chained dollars.
When the GDP total increases, it is important to know whether the increase came from increased production, or from inflation. GDP increases from more goods being produced is usually a good sign for an economy as more goods being produced increases supply and lowers prices. However, GDP increases due to inflation is considered a bad sign for the economy because price increases lower demand.
The GDP statistics are reported two ways.
The first is Current Dollars, also known as Nominal Dollars. The numbers in these sections include increases due to inflation.
The second is Chained Dollars, also know as Real Dollars. In these sections, the inflation has been removed from the total by using something called a deflator, which is basically a correction factor applied to remove price increases.
Real, or Chained Dollars are the statistics most economists look at as this shows the real change in production levels in the country. The statistics reported in the media use Real Dollars as well.
An important point to mention is that most of the statistics are reported as an annualized number. In other words, the statistics show what the change would be for the whole year if the same amount of change remained consistent all year long.
Looking at the report, there is a main table, Table 1, and several follow up tables. At the beginning of the report is a summary, and revisions for previous reports
The data in table 1 is presented as a percent change from year to year and a precent change from quarter to quarter.
Table 1 shows the GDP for the entire country.
Table 1 is then broken down into 4 main categories-
Personal Consumption Expenditures, Gross Private Domestic Investment, Net Exports of Goods and Services, and Government Consumption Expenditures and Gross Investment.
Music:
GDP Report Part 1
Danse Macabre - Low Strings Finale (Theme)
Griphop
Plans In Motion
Machinations
Home Base Groove
Kevin MacLeod incompetech.com
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11: Gross Domestic Product (GDP) Report (Part 2)by InformedTrades2,651 views
Excellent video!
bobichina 1 year ago
can't wait for part 2
boqallaf 1 year ago