SPECIAL PROJECT VALUE LINE - Research Paper Example

GDP: Economic Indicator GDP: Economic Indicator The gross domestic product (GDP) is an economic measure that assesses the country’s economic performance by measuring the total value of the products produced by the population at a given time, either quarterly or annually. Precisely, the GDP, measures the monetary value of the final products (goods and service) produced during a given period of time (Callen, 2012). In this forecast, I choose to use the American GDP in the year 2015 during a quarterly period because the GDP is a good indicator of understanding the economic growth.

In calculating the GDP, there are many approaches to the same. Specifically, theses are the production approach, the expenditure approach, and the income approach.In my forecast, I focused on the real GDP as an indicator of economic growth in the US in 2015. Precisely, this type of the GDP examines a topic of interest to the public as everyone wants to understand the performance of the total goods or service. As an economic indicator, the GDP is imperative because it provides information about the size of the economy as well as its performance (Madigan, 2015).

When the GDP experiences a growth rate, it indicates that the economy is in a healthy status. Explained broadly, an increase in the real GDP is a sign of an economic growth and predicts the possibility of increased employment and a decrease in the inflation rates.The strong economic growth as indicated in the trend of the GDP suggests that the US labor market will expand compared to the previous year. Specifically, the Wall Street Journal forecast that unemployment will decline from 5.6 to 5.

2 percent by December 2015 compared to the same time in 2014 (Madigan, 2015). The tight labor market interprets to an increase in income rising from 1.7 percent to 2.6 percent in 2014 and 2015 respectively. If this prediction is correct, the US economy will experience the highest and fastest wage growth since 2008. Using three reliable international forecasting agencies, I obtained the average of the presented GDPs to determine the perceived performance of the US economy in 2015. The table below represents the quarterly GDPs from Wall Street Journal, the Conference Board, and the Well Fargo, US economic forecast (The Conference Board, 2015; The Wall Street Journal, 2015; Wells Fargo, U.S. Economic Forecast, 2015).

Quarterly 1Quarterly 2Quarterly 3Quarterly 4Wall Street Journal2.72.93.03.5The Conference Board2.42.42.32.4The Well Fargo, US1.52.42.92.9Average 2.22.62.72.9As observed from the table, the three forecasting agencies predict an increase in the national real GDP. As seen from the average in the quarterly forecasts, the GDP will rise from 2.2 percent in the first quarter to 2.9% in the fourth quarter. According to the Wall Street Journal panel of economic experts, the increasing economic trend is caused by the prolonged drop in oil prices that began in June 2014.

Specifically, this is associated with the increased turnover accrued by consumers and businesses as the lower energy prices reduce the prices of commodities. The growth in GDP has multiple benefits to the US economy because it will reduce inflation, unemployment rates, and increase income rates.ReferencesCallen, T. (2012, March 8). Gross Domestic Product: An Economy’s All - Back to Basics: Finance & Development. Retrieved from http://www.imf.org/external/pubs/ft/fandd/basics/gdp.htmMadigan, K.

(2015, January 15). WSJ Survey: Economists See 2015 GDP Growth at 3% - WSJ. Retrieved from http://www.wsj.com/articles/wsj-survey-economists-see-2015-gdp-growth-at-3-1421345963The Conference BOARD. (2015). U.S. Forecast | The Conference Board. Retrieved from https://www.conference-board.org/data/usforecast.cfmThe Wall Street Journal. (2015, February). Econ Forecast - The Wall Street Journal - WSJ.com. Retrieved from http://projects.wsj.com/econforecast/#ind=gdp&r=20Wells Fargo, U.S. Economic Forecast. (2015). U.S. Economic Forecast.