JP: GDP


Mon Mar 07 17:50:00 CST 2016

Consensus Actual Previous
Quarter over Quarter -0.4% -0.3% -0.4%
Q/Q change - SAAR -1.4% -1.1% -1.4%
Year over Year 0.8% 0.7%

Highlights
Japan's economy did better than originally though, with an assessment of GDP for the quarter trumping expectations that it would contract even more than originally stated. The second estimate of fourth quarter gross domestic product contracted slightly less than in the first estimate. GDP was down 0.3 percent on the quarter revised from 0.4 percent. On an annualized basis, GDP contracted 1.1 percent instead of 1.4 percent. CAPEX was revised upward to 1.5 percent on the quarter from 1.4 percent. Domestic demand was down 0.4 percent instead of declining 0.5 percent. Household consumption retreated an unrevised 0.9 percent.

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.