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Article: The Shape of GDP - Analyst Blog
- Article from:
- Zacks Investment Research - Analyst Blog
- Article date:
- November 3, 2009
- Author:
CopyrightCopyright 2009 Zacks Investment Research. (Hide copyright information)
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The Shape of GDP - Analyst Blog
While last week GDP growth came in better than expected at 3.5%, which was a very welcome development, there was very little change in the coverall shape of GDP. This is a troubling development for the long term.
GDP is the sum of spending by the Consumer, Private Investment, Government Spending and Net Exports. The Graph below shows the percentage each of them has contributed to overall GDP since 1947.
The Consumer is still by far the dominate force in the economy, and it is becoming more so. In the 3Q, PCE, meaning the consumer, rose to 70.98% of GDP, up from 70.66% in the second quarter. That is an all-time record high. At the same ...