The GDP report comes out Friday, August 26th at 8:30 AM eastern time. Why is it important? The gross domestic product,or GDP, is one of the primary indicators used to gauge the health of a country’s economy. It represents the total dollar value of all goods and services produced over a specific time period. Usually, GDP is expressed as a comparison to the previous quarter or year. So for example, if the year to year GDP is up 3%, this means that the economy has grown by 3% over the last year.
Measuring GDP is complicated. The calculation can be done two ways. One way is by adding up what everyone earned in a year. This is called the Income Approach. This approach is often referred to as GDPI. It is calculated by adding up total compensation to employess, gross profits for incorporated and non incorporated firms and taxes minus subsidies. The second way is by adding up what everyone spent. This is called the Expenditure Method. This method is the more popular approach. It is calculated by adding total consumption ,investment, government spending, and net exports. Realistically, both approaches should arrive at approximately the same total!
When the economy is healthy, you will usually see low unemployment and wage increases. A poor economy usually means lower profits for companies, which in turn means lower stock prices. So is our current economy in good shape or not?
Series 3 Licensed
Senior Market Strategist
Susan attended the University of Wisconsin Integrated Liberal Arts Program where she received her BA/BE degrees in 1966. After graduating, Susan taught elementary school. In 1980, after watching a family member trade in the pits of the Chicago Mercantile Exchange, she began training with Ira Epstein and G.H. Miller. She passed her Series 3 exam and enrolled in a multitude of technical analysis courses, including: charting, fundamental theory, Gann theory, Market Profile, and seasonal patterns. In 1981, she moved to Rouse Woodstock, which became American Futures, where she helped train brokers to raise equity. In 1982 she formed a trading group and then moved to Refco. In 1994, she joined Jack Carl/Index Futures to pursue the retail hotline business and expand her trading group. In 2011, Susan joined RJO Futures.