Expected U. S. Gdp Growth Rate

EXPECTED U. S. GDP GROWTH RATE

HOW THE GDP IS DETERMINED

The Gross Domestic Product (GDP) is the combined output of all U.S. goods and services by labor and property. The GDP shows whether the economy is growing, declining, or is stagnate. Economic growth is instrumental in determining the GDP. GDP per capita is an indicator of the average standard of living in the United States. The GDP is delivered in three reports per quarter; advance report, preliminary report, and the final report. In the last quarter of 2011 the GDP increased 3.0%. The GDP is forecasted to increase at an annual rate of 2.2%. This is based on source data that is incomplete and is primarily the result of personal consumption expenditures (PCE) and exports. There are four main components used in determining the GDP:

Personal Consumption Expenditures (PCE) goods/services

Business Investment

Government Spending

Net Exports of Goods and Services

The GDP is delivered by the Bureau of Economic Analysis (BEA) and is determined not only by the overall output of goods and services but also by recession, inflation, mortgage rates, unemployment, and economic sectors that are growing or declining. These are determining factors for investment.The price index for gross domestic purchases increased 1.1% in the fourth quarter of 2011 and is expected to increase 2.4% in the first quarter of 2012 (United States GDP Growth Rate, 2012).

GDP TRENDS

In the 1st quarter of 2009 the GDP fell to 6.4%. In the 2nd quarter of 2009 the economic stimulus package started to take effect in the economy. The GDP grew 2.2% in the 3rd quarter and 5.6% in the 4th quarter of 2009. Since then the GDP has maintained a level of around 2.2% annually. This is a slow growth rate and recovery due to the national debt (15 trillion) for this economy and it does not look to improve much over the next several years (United States GDP Growth Rate, 2012).

GDP STATISTICS

2010 GDP by Quarter

* 1st Qtr: 3.9% (2.7% increase)

* 2nd Qtr: 3.8% (1.7% increase)

* 3rd Qtr: 2.5% (2.6% increase)

* 4th Qtr: 2.3% (3.1% increase)

2011 GDP by Quarter

* 1st Qtr: 0.4% (1.9% increase)

* 2nd Qtr: 1.3% (1.3% increase)

* 3rd Qtr: 1.8% (1.8% increase)

* 4th Qtr: 2.8% (3.0% increase)

The GDP in 2011 was 15.3 trillion dollars (United States GDP Growth