The Gross Domestic Product is an indicator of economic health. When the GDP is negative for back to back quarters the country is officially in a recession. The headline number is the annualized, Table 1, single quarter value. This is the change from the immediate quarter. If a the prior quarter us negative and there is substantial improvement, the following quarter may have a distorted value. The Real GDP number is the annual GDP measure from the same quarter from the prior year, Table 8 data. You may have heard that President Obama never had a full year of GDP growth of 3.0% or higher. This month's data was interesting because it was the advance value for the fourth quarter. There will be a preliminary value released next month and a "final" value released the following month. The data was also interesting because we saw such a surge during the third quarter and such a disappointing fourth quarter.
The Annualized Growth Rate was 1.9%. This is the best case scenario. If this quarter is a template for the rest of the year our annual Real GDP would be 1.9%. This is considerably better than the 0.9% rate of fourth quarter of 2015. It is significantly lower than the 4.0% rate of 2013q4. There was a huge surge n fourth quarter gross private domestic investment. Will it continue?
We have only had one quarter where there was an annual Real GDP over 3.0% - Last Quarter we were under 2.0%. The Annual REAL GDP growth rate exceeded 2.0% during 2010, 2013, and 2014. As it stands the annual Real GDP and the Annualized GDP are identical. Last year the quarterly annualized rate was under 1.0%. this can be observed in the declining in the real GDP level during 2016q1 and 2016q2. We saw an abnormally high spike in the Table 1 2016q3 level which pulled up the 2016q3 and q4 Table 8 values. What is concerning here is the the Gross Private Domestic Investment for the Fourth Quarter is lower than it was during 2013q4, 2014q4, and 2015q4. Each year the investment dropped during the fourth quarter,when the annual changes were 9.3%, 3.8%, and 2.6% respectively. This year the q4 GPDI was 0.4%. If there is any good news in this it is that the GPDI during 2016q1 was -0.7%, -2.9% and -2.7%.
Will we see more growth in Gross Private Domestic Investment? It sounds like it. Companies are saying that they will be hiring.
It's the economy.
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