Mon Dec 07 17:50:00 CST 2015

Consensus Actual Previous
Quarter over Quarter 0.3% 0.3% -0.2%
Q/Q change - SAAR 1.0% -0.8%
Year over Year 1.7% 1.1%

Third quarter GDP was revised upward to a gain of 0.3 percent on the quarter from a decline of 0.2 percent in the first estimate. On an annualized basis the 0.8 percent decline in the initial estimate was revised to a gain of 1.0 percent. On the year, GDP was up 1.7 percent, up from 1.1 percent before. The positive revisions mean that the Japanese economy did not suffer another technical recession in the second and third quarters of the year.

Most importantly, CAPEX was revised to a quarterly gain of 0.6 percent the initial estimate had been a decline of 1.3 percent. Instead of subtracting from growth, CAPEX contributed 0.1 point. Consumption was up 0.4 percent (up 0.5 percent previously) but still contributed 0.2 point to GDP. Public investment and inventories contributed minus 0.1 point and minus 0.2 point respectively.

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

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.