GDP stands for gross domestic product. The total value of goods produced and services rendered in a year time." GDP is the major topic of macroeconomics.It is also one of the most interesting facets ofeconomics because itis continually changing.For example, on Thursday, February 27, 2020,the Departmentof Commerce Bureau of Economic Analysis (BEA) released its estimate offourth quarter(October - December of 2019) GDP.The following is an overview of thosestatistics.

According to BEA, the growth rate of GDP was +21 percent in the fourth quarter.Compared with the third quarter growth rate of +2.1 percent, economic growth was unchanged in the fourth quarter (para. 1, 2019).Please note: These quarterly growth rates are adjusted to annual rates, soGDP did not actually grow 2.1 percent in the fourth quarter.Instead, it meansthe economy would grow 2.1 percent for the entire year (12 months) if it grew at the same pace as it didin the fourth quarter.

The BEA's latest report on GDP is available at www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm.

Class - What comments or questions do you have about the following GDP statistics?Dothose statistics reflecteconomic conditions where you live?Is your workplace benefiting from the increase in GDP?What was the major cause ofthe drop in gross private domestic investment?

GDP Update

Percent change fromthird quarter2019 to fourth quarter of 2019

Overall GDP: +2.1 percent

Personal consumption expenditures: +1.7

Gross private domestic investment: -6.0

Government consumption expenditures and gross investment: +2.6

Exports: +2.0

Imports: -8.6

Talk About Confusing:

Advance, Second,and Third GDP Estimates!

GDPstatistics arerevised,re-revised,and re-re-revised!For example, BEAreleases estimates of each quarter's GDP at least three different times.The three releases are: (1) advance, (2) second estimate, and (3) third estimate.The advance estimate isthe first available estimate, the second estimate is compiledabout one month after the advanceestimate, and the third estimate is available about one month after the second estimate.In addition, the quarterlyGDP statistics arecompiled into annual estimatesas part of BEA'sannualrevisions.For example, the release dates of the fourthquarter 2019 GDPestimates are scheduled as follows:

• Advance: January 30, 2020
• Second Estimate: February 27, 2020
• Third Estimate: March 26, 2020

The reason for these revisionsis because as time goes by BEAgathers" . . . newly available and more comprehensive source data . . ."Talk about confusing!

References

U.S. Department of Commerce. Bureau of Economic Analysis.Gross domestic product, fourth quarter and year 2019 (second estimate). Retrieved March 25, 2020 from https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm