GDP and 93-year averages
|As written by Francesc, Happy Saint George day in Barcelona. A rose for the lady and book for the gentlemen. Only 3 books to suggest, Inside the Currency Market, Using Z Scores to Trade FX and the Contested Election of 1870. Books not to purchase. Market books, Technical analysis books, trading books.
From 200 economic data points, the Bureau of Economic Analysis produces and reports Real GDP due to elimination of price fluctuations from Inflation. Inflation for the BEA is measured by the Price Index for Gross Domestic purchases. The important measure is price changes paid for goods and services. Similarly, the PCE consumption index is factored from the prices of Goods and services purchased by consumers. PCE is released alongside GDP.
On the opposite side to Real GDP is Nominal GDP as Inflation becomes a factor to measure Inflation in the price of goods and services produced including Exports but eliminates Imports. Nominal GDP factors the market value of all goods and services over each annual and 6-week period.
Real vs Nominal GDP measures price changes Vs the value and output of all goods and services. Real GDP is factored by dividing Nominal GDP to the Price Deflator. While Nominal GDP is factored by Real GDP X price deflator. The price deflator measure the output produced by Inflation.
The GDP price deflator for Q4 2023 rose 1.7% and 3.3% for Q 2023 while Real GDP rose 3.4% on an annual basis. The price index for gross domestic purchases increased 1.9 percent in Q4 2023. PCE increased 1.8%.
GDP 93-year average
GDP from annual averages 1930 to 2023 = 3.45. The 5 year average = 2.28 and 10 year at 2.41. The 15 and 20 year trades 2.35 and 2.05. From 2 to 20 year ranges from 1.93 to 3.4 at the 4 year and 2.95 at the 2 year average.
The Congressional Budget Office aligns with my averages as they factor GDP at 2.2% from 2024 to 2027 then 2.1 in 2028 and 2029. After 2030, GDP travels to 1.6 lows.
GDP last at 3.4 and expected 2.5 is a massive move lower. GDP must first break 2.95 then 2.6 at the 3 year average. The line at 2.6 is most vital. If this line breaks then GDP heads to 2.41, 2.35, 2.31 and 2.28 at the 5 year average.
Current GDP at 3.4 trades at the 93-year average and should much lower from an average perspective.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.