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Macroeconomics

GDP Research Paper

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Gross Domestic Product (GDP) research

1) Trends in real GDP that have occurred in the period shown in the BEA release

highlights document

According to the released data publicly disseminated by the U.S.Bureau of Economic

Analysis, the growth rate on real Gross domestic product spanning the year 2016 to 2020, the

growth rate exhibits a varying or fluctuating trend with various increases and decrease.

According to the second estimate published by the Bureau of Economic Analysis, in the

second quarter of the year 2020, the Real GDP experienced a depression of the rate of 31.7

percent. This indicated a percentage change of 1.2 percent, much higher than the estimate

released in the month of July 2020. It's also important to note that in the first quarter of 2020, the

real GDP decreased by a percentage of 5.

2) The period that experienced the most significant growth

The most significant growth was experienced in July 2020. The increase was

demonstrated in personal income and was accounted for by employee compensation as different

sectors of the economy continuously reopened from the lockdown. Individual rental incomes and

proprietor’s disposable income subsequently led to an increase. According to the Department of

Labor's Employment and Training Administration, the decreases in social benefits provided by

the government and asset income were the main decreasing causes of partially offset revenue.

The social benefits such as unemployment insurance benefits decreased in July.

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3) The period that experienced the least amount of growth

The U.S. monthly international trade deficit increased in July 2020 according to the U.S.

Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $53.5

billion in June (revised) to $63.6 billion in July, as imports increased more than exports. The

previously published deficit in June was $50.7 billion. The goods deficit increased from $9.3

billion in July to $80.9 billion. The services surplus decreased by $0.8 billion in July to $17.4

billion.

Exports

The Export of goods and services increased $12.6 billion, or 8.1 percent, in July to

$168.1 billion. Exports of goods increased $12.3 billion and exports of services increased $0.4

billion.

 The increase in exports of goods reflected increases in automotive vehicles, parts,

and engines ($3.8 billion), in consumer goods ($2.6 billion), in industrial supplies and materials

($2.5 billion), and capital goods ($2.5 billion).

 The increase in exports of services reflected increases in other business services

($0.3 billion), in transport ($0.3 billion), and charges for the use of the intellectual property

($0.1 billion). A decrease in travel ($0.4 billion) partly offset the increases.

Imports

The Import of goods and services increased $22.7 billion, or 10.9 percent, in July to

$231.7 billion. Imports of goods increased by $21.5 billion and imports of services increased by

$1.2 billion.
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 The increase in imports of goods reflected increases in automotive vehicles, parts,

and engines ($7.7 billion), in industrial supplies and materials ($4.4 billion), in capital goods

($4.1 billion), and consumer goods ($3.5 billion).

 The increase in imports of services reflected increases in transport ($0.5 billion),

in travel ($0.3 billion), in charges for the use of the intellectual property ($0.1 billion), and

insurance services ($0.1 billion).

4) Projection of the growth in GDP

The decrease in consumer spending reflected a decrease in services influenced by health

care and goods influenced by clothing and footwear. The slowdown in exports primarily

reflected a decline in goods, influenced by capital goods. The decrease in business investment

primarily reflected a reduction in equipment, driven by transportation equipment). The decline in

inventory investment primarily reflected a reduction in retail (led by motor vehicle dealers). The

decrease in residential investment primarily reflected a decline in new single-family housing.

The increase in government spending reflected an increase in federal spending related to

payments made to banks for processing and administering the Paycheck Protection Program loan

applications (BEA, 2020).

Updates to GDP

The revision to GDP mainly reflected upward revisions to inventory investment and

consumer spending.

Corporate profits from current production

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Profits decreased 11.1 percent at a quarterly rate in the second quarter after decreasing

12.0 percent in the first quarter. Corporate profits decreased by 20.1 percent in the second quarter

from one year ago.

 Profits of domestic nonfinancial corporations decreased 15.0 percent after decreasing

14.4 percent.

 Profits of domestic financial corporations increased by 9.2 percent after decreasing

8.9 percent.

 Profits from the rest of the world decreased by 20.3 percent after declining by 8.4

percent.

5) Possible causes of the prediction coming true

The second-quarter decrease in real GDP reflected a reduction in consumer spending,

exports, business investment, inventory investment, and housing investment that were partially

offset by an increase in government spending. Imports, a subtraction in the calculation of GDP,

decreased.

Consumer spending increased in July, reflecting increases in both goods and services.

 When it comes to goods, the leading contributor to the increase was spending for

new motor vehicles, based primarily on unit sales from Ward’s Automotive Sales Report.

When it comes to services, the leading contributors to the increase were spending on

health care as well as food services and accommodations. Within health care, both hospital and

outpatient services increased, based on volume data for hospital services and outpatient visits as

well as credit card data (Kinderman, 117–118)

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 . Spending on food services and accommodations based on Census Monthly

Retail Trade Survey data and Smith Travel Research data (Kinderman, 117–118).
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Works Cited

Kinderman, Daniel (2019). "The Neoliberal Revolution in Industrial

Relations". Catalyst. 2 (4): 117–118

Steverman, Ben ( 2017). "The U.S. Is Where the Rich Are the Richest". Bloomberg.

The US Bureau of Econmics (2020) Second Quarter Industry, State GDP Stats Come Earlier
This Year

Available at: https://www.bea.gov/news/blog/2020-09-04/second-quarter-industry-state-

gdp-stats-come-earlier-year