JP: GDP


Mon Sep 07 18:50:00 CDT 2015

Actual Previous
Quarter over Quarter -0.3% -0.4%
Q/Q change - SAAR -1.2% -1.6%
Year over Year 0.9% 0.7%

Highlights
Second quarter gross domestic product was upwardly revised to a decline of 0.3 percent on the quarter or at an annualized pace of 1.2 percent from the preliminary estimate of 0.4 percent. The data indicate that domestic demand remains weak while exports suffer from sluggish growth globally.

CAPEX was revised down to a decline of 0.9 percent on the quarter from the first estimate's slip of 0.1 percent. Revised private consumption was down 0.7 percent on the quarter after the preliminary estimate of 0.8 percent drop. Private residential investment was up an unchanged 1.9 percent. Exports of goods and services were down an unrevised 4.4 percent.

Japan continues to exhibit an unsteady recovery with on-again, off-again growth. Since the financial crisis Japan had undergone three recessions, despite monetary help from the Bank of Japan. Consumption has been weak since April 2014, when the country lifted the national sales tax from 5 to 8 percent. This was necessary to bolster confidence in Japan's fiscal prudence, but it also threw Japan into another recession.

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.