GDP Essay Example | Topics and Well Written Essays - 500 words - 1

GDP - Essay Example According to the US Bureau of Economic Analysis that is tasked with the duty of breaking down the worth earned by the goods and services, the rise in real GDP can partly be attributed to the fact that Federal Government spending reduced. The decline in the residential fixed investment together with reduction in spending in both the state and the local governments is another reason the positive trend in real GDP was registered. According to input from the US Bureau of Economic Analysis, the third quarter experienced the most significant growth, translating to a whopping 4.1%. On the other hand, the fourth quarter seemed to have experienced the least form of growth, which translated to 2.4% (Mataloni). With my prediction for real GDP this year being 3.1%, I presume true the idea that the future is uncertain for US economy at large. I say so because this year is likely to witness increased output, which translates to rise in both imports and exports. When the output is increased, business shall no doubt spur, and this shall prompt most of the employers to bring on board additional employees. The hiring of more employees will mean that the rate of unemployment shall decline. In like manner, the participation of labor too is likely to increase following increased output. Another reason real GDP is likely to increase this year is the fact that the personal consumption expenditure is also likely to increase precisely by two cents, and this shall translate to reduced inflation. The unexpected move by the Federal Reserve Bank to keep the short-term interests is also likely to prove beneficial in the end as it will contribute to positive trends in real GDP. In the course of this year, I also expect the Federal Government to cut costs thereby lowering its spending further (Avakov 43). Just as they did last year, the state and local governments alike are also expected to cut their costs hence lowering their budgets further. Just