August 14, 2016 06:50 CDT

Consensus Actual Previous
Quarter over Quarter 0.2% 0.0% 0.5%
Q/Q change - SAAR 0.5% 0.2% 1.9%
Year over Year 0.6% 0.0%

First estimate of second quarter GDP was flat after increasing 0.5 percent in the first quarter when compared with the previous quarter. On an annualized basis, second quarter GDP increased 0.2 percent after rising 2.0 percent in the first quarter. When compared with a year ago, GDP was up 0.6 percent. Expectations were for an increase of 0.2 percent on the quarter or an annualized gain of 0.5 percent.

Domestic demand was up a weak 0.3 percent with private demand up 0.2 percent. Private consumption was up 0.2 percent for a 0.1 percent contribution to growth. CAPEX retreated 0.4 percent on the quarter after contracting 0.7 percent in the first quarter.

The start of the June quarter had been marred by concerns that the earthquake that hit the southern island of Kyushu in April would disrupt supply chains and put a dent in overall growth for the quarter.

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.