| Actual | Previous | |
|---|---|---|
| Quarter over Quarter [Adjusted] | -0.5% | 0.1% |
Highlights
The economy contracted 0.5 percent in the third quarter according to preliminary estimates, as a sharp contraction in the chemical and pharmaceuticals sector dragged the economy down. At the same time services, while growing, expanded at a slower pace.
During the second quarter, growth was a marginal 0.1 percent.
Preliminary estimates are short on detail, and final data will be released in about 45 days which will provide much more insight.
Likely also weighing on growth were the 39 percent tariffs imposed by the United States. Last week, the US and Swiss governments reached an agreement in principle to lower the tariffs from 39 percent to 15 percent, bringing the alpine nation in line with the European Union.
The agreement will come as a relief to the Swiss watch industry in particular which was suffering from the tariffs.
During the second quarter, growth was a marginal 0.1 percent.
Preliminary estimates are short on detail, and final data will be released in about 45 days which will provide much more insight.
Likely also weighing on growth were the 39 percent tariffs imposed by the United States. Last week, the US and Swiss governments reached an agreement in principle to lower the tariffs from 39 percent to 15 percent, bringing the alpine nation in line with the European Union.
The agreement will come as a relief to the Swiss watch industry in particular which was suffering from the tariffs.
Definition
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.
Description
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.
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.
