The economy held up better than expected in the third quarter, albeit after a weaker revised performance in the previous period. Real GDP expanded at a 0.3 percent quarterly rate after a 0.1 percent dip in April-June period. Annual growth was also 0.3 percent, unchanged from its third quarter print.

Domestic demand was boosted by a 0.5 percent quarterly rise in government expenditure, the only component to show any real strength. Household spending was up a modest 0.2 percent, down from 0.4 percent previously and a rate matched by construction. Investment in equipment and software fell a further 1.1 percent, compounding the 3.4 percent slump recorded in the second quarter. Consequently, with business inventories strongly negative, growth would have been much more subdued but for a positive contribution from net foreign trade. Here, exports of goods and services increased 1.7 percent while imports fell 3.6 percent, their second successive decline. This added 3.2 percentage points to the overall quarterly change.

In sum, the economy had a respectable third quarter but sluggish consumer spending and weak gross fixed capital formation suggest that growth is likely to be subdued this quarter. To be sure, there is nothing here to make the SNB want to raise its policy rate later this month. That said, at least today's data finally lift both the Swiss RPI (15) and RPI-P (20) back above zero, implying that economic activity in general is now running slightly ahead of market expectations.

Total output stagnated in the second quarter and is similarly expected to register zero growth in the period just ended.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. There is no flash estimate and the first report is typically not issued until around sixty days after the end of the reference quarter. This has the advantage of limiting the size of any future revision and also accommodates the inclusion of the GDP expenditure components.

GDP 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.