Real Gross Domestic Product – GDP is defined by the Bureau of Economic Analysis as “the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes” (2016, n.p.). The real GDP is analyzed based on the four quarters of the year. For every year the data is provided for four quarters.
The data show the trend of growth in real GDP. In both years in 2014 and in 2015 the annual level increased to 2.4%. The trend of growth did, however, differ in rising of different components that contribute to its growth. The price index increased for 1.2% more in the year 2015 with comparison with the year 2014 (Bureau of Economic Analysis, 2016).
The most significant growth of real GDP was seen in the period between the July and September 2015 or in the so called third quarter. Third quarter real GDP growth increased for 2.0% in comparison to the fourth quarter, where advance estimation has been given at 0.7% increase of the real GDP. The second estimation will not be available until the end of the February. The time period from October to December has experienced the least amount of the growth (Bureau of Economic Analysis, 2016).
I believe the GDP will grow the next year in moderate rates. The economic crisis has finished and since the 2012 onward we have seen the growth of real GDP in higher percentages as before. The levels of unemployment are not predicted to increase or stay in the same level, which means the public consumption will lead to the growth, the real GDP also in the year 2016. The unemployment level will start at about of 5% as it was in the end of the 2015 (Trading Economics1, 2016). If more people work the sum of producing goods and service produced in increasing, but only if the work is done more efficiently. Public spending and bigger consumption will also rise which also contributes to the real GDP growth. The trend predictions for the public spending are shown to be on the increase in comparison from 2015 (US Gov.spending, n.d). I predict that the value of the current will not drop any more based on the other currencies, which will also result in the growth of the real GDP. The interest rate will not increase and this will allow for the short run, an increase since the organizations will most likely engage in the business activities because of the lower financing. The prediction of the interest rates has been given by the Trading Economics (2016) that the interest rate in the country will be at 0.5 percent and by the end of the year around 1.0%. Foreign investment also plays a significant role since it is the main factor that the real GDP in developing countries is a lot higher than in developed ones. Business Consultancy AT Kearney has given the United States the title of the best place in the world to invest in three consecutive years. There were also many government programs launch in the recent past to attract the foreign involvement (Selig, 2016). With the foreign investments more people get hired and the export and import of U.S. products increases. A lot of factors affect the growth of the real GDP and in this year the economic situation will not worsen from the previous year.
Sine I wanted to prove my prediction, I also checked the formal predictions of the OECD data which has foreseen the growth of the real GDP from 2009-2017 in the United States at the rate of 2.39%. More specific prediction was given by the Conference Board, where the Real GDP prediction in the first quarter was estimated at 2.3% of growth, second quarter 2.5%, third quarter 2.2%, and fourth quarter 2.2%.
Work Cited
Arnold, A. Roger. (2010). Macroeconomics. United States: South-Western Cengage Learning.
Bureau of Economics Analysis. (2016). National Income and Product Accounts, Gross Domestic Product: Fourth Quarter and Annual 2015 (Advance Estimate). Retrieved from http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
OECD. (N.d.). Domestic Product. Retrieved from https://data.oecd.org/gdp/real-gdp- forecast.htm
The Conference Board. (N.p). U.S. Economic Forecast. Retrieved from https://www.conference-board.org/data/usforecast.cfm
Trading Economics1. (2016). United States Unemployment Rare. Retrieved from http://www.tradingeconomics.com/united-states/unemployment-rate/forecast
Trading Economics. (2016). United States Fed Funds Rate. Retrieved from http://www.tradingeconomics.com/united-states/interest-rate/forecast
US Gov.spending. (Nd.). Total Budget 2016 Government Spending. Retrieved http://www.usgovernmentspending.com/
Seigl, M. Stefan. (2016). Expending the Foreign Investment in 2016: Creating Jobs and Supporting the U.S. Economy. Retrieved from http://www.huffingtonpost.com/stefan- m-selig/expanding-foreign-investm_b_8938382.html
