Economy
March 31, 2017
US Gross Domestic Product - Q4 2016 Third Estimate
Written by Peter Wright
The headline report of GDP growth in Q4 came in at an upwardly revised 2.06 percent which was a decline from 3.53 percent in the third quarter. GDP is measured and reported in chained 2009 dollars and in the third estimate of Q4 was $16.813 trillion. GDP is defined as Consumption (C) plus Investment (I) plus Government Spending (G) plus [Exports (E) minus Imports (I)] or: GDP = C + I + G + (E-I)
The growth calculation is misleading because it takes the Q over Q change and multiplies by 4 to get an annualized rate. This makes the high quarters higher and the low quarters lower. Figure 1 clearly shows this effect.
