JP: GDP


Sun Mar 08 18:50:00 CDT 2015

Consensus Actual Previous
Quarter over Quarter 0.6% 0.4% 0.6%
Q/Q change - SAAR 2.3% 1.5% 2.2%
Year over Year -0.7% -0.4%

Highlights
Revisions to Japanese GDP failed to amend the narrative of an economy struggling to emerge from last year's recession. Fourth quarter gross domestic product was revised down to quarterly growth of 0.4 percent from 0.6 percent in the first estimate. Annualized growth was estimated at 1.5 percent, down from the previous 2.2 percent. When compared with the fourth quarter of 2013, GDP was revised down to minus 0.7 percent from the original estimate of minus 0.4 percent.

Business spending, originally up 0.2 percent from the prior quarter, is now estimated to have contracted by 0.1 percent. The upside was that private consumption, which originally grew just 0.3 percent, was revised up to a 0.5 percent estimate.

Definition
Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy.

Description
Gross domestic product is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios.

The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.