|
|
The Author's Page for |
|
|
|
The Complete Idiot’s Guide to Economic Indicators RogersEconomics.com |
|
The
Complete Idiot’s Guide to Economic Indicators
Web Links and Updates
by Chapter
Chapter 4
GDP and Monthly
Indicators
Introduction
from Chapter 4
In
Chapter 3, you got an introduction to the big picture of GDP. Now, you’re going
to learn some fascinating details about monthly indicators’ relationships to
GDP. By the time you finish this chapter, you’ll have a solid grasp on how
these indicators lend insight into GDP components. And it’s not as complex as
you might think.
You
already understand some basics of GDP, so we’re going to hit the ground
running. Grab your beverage of choice, get comfortable, and hop back onto the
path of becoming a savvy market watcher!
The
bottom line is we want to know how monthly economic indicators give us the big
picture for the economy. GDP paints a
broad picture of what going on and actually condenses the major sectors into
four manageable parts. Now we want to learn which monthly indicators impact
those four parts (C + I + G + Net Exports).
How do we start to tie together the monthly indicators to get the
overall direction of the economy? Tie
them in with GDP components!
There
are two basic ways of viewing monthly indicators in their relationship to GDP
components. First, some series are source data for GDP. The Commerce Department
uses those indicators to estimate portions of GDP. Second, other monthly
indicators suggest how strong or weak a particular GDP component is in coming
months. The expenditure approach to GDP helps you to think about how other
economic indicators fit into the big picture, such as which indicators tell you
how strong the consumer sector is currently in GDP.
GDP
divides the expenditure view of the economy into relatively tidy categories
that have common factors affecting that sector’s growth. When you learn the
basic GDP expenditure components and their fundamentals, you’ll think like an
economist! It may seem daunting now, but by the time you finish this book,
you’ll understand the underlying factors that determine the strength for a
sector. These factors are what economists call sector fundamentals.
Web
Links for Chapter 4
Key Source Data for GDP
Chapter 4 talks about learning what key
series go into estimates for gross domestic product. It also goes into what the behavioral characteristics
are for various components of GDP (such as personal spending versus
exports). Basically, you can tie
subsequent chapters (such as Part 2 on the consumer sector) with economic
indicators to the related behavioral components of GDP. An example listed is the employment situation
report gives lots of clues about the health of consumer spending.
However, you may be interested in the current
data that make up most of the estimates for the latest quarter of GDP. This would be the source data.
First, the Commerce Department lists the
primary source data used in each quarter’s advance report (first estimate) for
GDP.
So, you can start by looking at the advance
estimate found at the main link at the Commerce Department.
Or you may want to look at the advance report
in historical releases of GDP.
Here’s a list of the
main source data for GDP components.
Personal consumption
expenditures
Retail
sales excluding autos
Nonresidential
investment, structures
Nonresidential construction outlays
Nonresidential
investment, equipment and software
Shipments (from the durables report) of
nondefense capital goods
Exports and imports of capital goods from
the monthly
international trade report
Residential
investment
Residential construction outlays
Change in private
inventories
Monthly
business inventories report
Government consumption
expenditures and gross investment
Construction outlays,
public
Net exports
Exports and imports from the monthly international
trade report
The
long, detailed list can be found at the Bureau of Economic Analysis web site
for National Economic Accounts.
Look
under “Supplemental Estimates,” “Underlying
Detail Tables”
Return
to Chapter List for Web Pages, The Complete Idiot’s
Guide to Economic Indicators
Return to Economic
Indicators Site Map
Back
to Home Page for RogersEconomics.com
Email comments or suggestions to RMRogers@mindspring.com
