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The gross domestic product, popularly known as the GDP, is the total value of the output of all goods and services produced by labor and property within the United States. The purveyor of this news is the National Bureau of Economic Analysis, which is an agency of the U.S. Department of Commerce. Estimates of such data are issued quarterly, with two subsequent monthly revisions being released. The initial estimate of a quarter’s GDP is issued late in the month following the end of that three-month period. First and second revisions come out the following two months.  It should be noted that this initial estimate of a quarter’s GDP is based on data that are incomplete. Accordingly, there can be some dramatic revisions as surveys become more complete.

Specifically, after the first--or advance--GDP estimate is issued, there is a month’s wait for the second, or preliminary, GDP estimate to be forthcoming. That data, presumably, is more complete. Then, a month later, we get the final revision. Note that all such releases are estimates, as are all government and private-sector economic issuances, as the samplings are small and incomplete.

Included in the GDP data are estimates of both consumer and industrial activity, with the former accounting for about 70% of total output. Clearly, as the consumer goes, so goes the economy. Of course, the terms consumer and industrial are broad, and are composed of individual categories, such as total consumption, non-residential fixed investment, equipment and software, industrial equipment, residential fixed investment, exports, imports, and Federal, State and Local Government expenditures. There are also estimates of inventory change. This is not an exhaustive list, but it does hit the highlights.

With GDP, and with many other series, the big unknowns are not only what subsequent revisions will contain, but also what the succeeding month or, in this case, quarter will show. Going forward, GDP revisions will reflect subsequent export and import releases and revised data on inventories. Suffice it to say, any GDP reading is a quick and, of necessity, sketchy look at the strength of the U.S. economy at an arbitrary point in time.