Economic growth was robust in the third quarter. Following a revised 0.6 percent quarterly increase in the second quarter, GDP expanded 0.4 percent, a couple of ticks above the market consensus. Annual growth was 2.0 percent, up from a revised 1.5 percent last time.

Household consumption rose a quarterly 0.5 percent, an increase matched by government consumption, but equipment spending fell a hefty 1.3 percent, compounding a 1.2 percent decline in the second quarter. Against that, construction was again solid, up a further 0.9 percent.

Growth would have been stronger but for net foreign trade. Exports were weak with sales of goods (excluding valuables) down a sizeable 4.1 percent on the quarter and of services down 1.5 percent. Goods imports also dropped 1.7 percent but imports of services rose 1.2 percent.

The third quarter data will probably add to SNB concerns about the strength of the Swiss franc and so should leave the central bank on course to cut its policy rate next month. Today's also update lifts the Swiss RPI to minus 7 and the RPI-P to exactly zero. Economic activity in general is now performing much as expected.

The preliminary data showed third quarter real GDP (adjusted for sporting events) expanding 0.2 percent versus the previous period. Growth in the service sector was partially offset by a contraction in industry.

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.