Expected U.S. GDP Growth Rate Going Forward

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Expected U.S. GDP Growth Rate Going Forward

• Name

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GDP definition

• GDP Gross domestic product
• Value of goods services produced in period of
  time
• Similar to standard of living
• Determined in one of three ways

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Ways to determine GDP

• Product approach
• Income approach
• Expenditure approach

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Product approach

• Most direct way to measure GDP
• Adds total of all enterprises
• All products must be bought by somebody
• Value of products must equal money being spent

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GDP economy of a country

• GDP affects everyone
• Predicts if economy is strong
• Alternately, economy could ready to collapse
• Healthy economy usually means unemployment low
• Increased wages
• Increased labor demand

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Changes in GDP

• Significant changes in GDP
• Usually affects stock market
• Investors worry about negative GDP growth
• Economists use this information to determine a
  recession

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United States GDP

• Unemployment high
• Inflation on the rise
• Low demand for new products
• Limited demand for homes

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Growth in US GDP in 2010

• May have been from bank bonuses
• May not reflect actual increases in GDP
• Many pundits predict a poor economic recovery

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Economic future in peril

• Government markers predict poor performance
• Very slow addition of new jobs
• Many people out of work

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Bad predictions

• Economists suggest low employment rates hurting
  GDP
• Leads to limited demand for new products
• Interest is low

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US GDP vs. foreign GDP

• Other countries also hurting financially
• Many countries have looked to the US
• We have much in the way of high debt
• Foreign countries buying our debt

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US debt

• Unfortunately, US in credit crisis
• Huge national debt
• Owned by other countries
• Limited ability to repay
• Our tactic of printing more money devalues the
  dollar

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US GDP on trend
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Possible good news

• US Reserve says, moderate strengthening of the
  expansion in 2011.
• This department in the know
• Able to make changes
• Hopefully will have good incentives for the
  economy upturn

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References

• Investopedia (2010) What is GDP and why is it so
  important? http//www.investopedia.com/ask/answers
  /199.asp. Last accessed February 15, 2011.
• Lazzarro, J. (2010) Economists Lower 2011 U.S.
  GDP Growth Forecasts to 2.5. http//www.bloggings
  tocks.com/2010/09/10/economists-lower-2011-u-s-gdp
  -growth-forecasts-to-2-5/. Last accessed February
  15, 2011.
• Morici, P. (2010) GDP Trends Not Encouraging.
  http//www.economyincrisis.org/content/gdp-trends-
  not-encouraging. Last accessed February 15, 2011.
  
• World Bank, Statistical Manual gtgt National
  Accounts gtgt GDPfinal output, retrieved October
  2009. "User's guide Background information on
  GDP and GDP deflator". HM Treasury.
  http//www.hm-treasury.gov.uk/data_gdp_backgd.htm.
    "Measuring the Economy A Primer on GDP and the
  National Income and Product Accounts" (PDF).
  Bureau of Economic Analysis. http//www.bea.gov/na
  tional/pdf/nipa_primer.pdf.