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Fourth Quarter GDP Gets a Big Downward Revision Essay


The article by Danielle Kurtzleben posted on the news portal called USNews states that the gross domestic product growth in the US did not match the expectations formed by the economists and experts at the end of 2013. The author of the article refers to a report made by the Commerce Department, which noted that the economy of the United States did not show the growth it was expected to. In fact, gross domestic product growth was revised downward (Kurtzleben, 2014).

According to the prognosis, the growth was initially estimated to reach 3.2 percent, but the actual numbers showed that the GDP growth for the fourth quarter is 2.4 percent. The reason for the downward revision is the reducing amount of consumer spending in the United States.

Even though taken by itself consumer spending remained quite strong, the slowdown in the gross domestic product still occurred because of the slowdown in the sphere of business investment, the cuts made in government spending and lowering demand for home remodeling and real estate. The author notices that the experts explain that downward revision most likely was caused by the unusually cold winter the United States had this year.

The article brings up a topic of gross domestic product and how the economists follow it carefully every season. In the modern world, the development and growth of GDP are extremely important; this is why the slightest changes in it are being monitored and examined. There is a common opinion that the growth of the gross domestic product in the world is the marker of a successful economy (Rehman 2014).

The downward revision of GDP and softer spending in the United States are being researched, and the economists are anticipating that both factors will improve in the closest time. The author of the article says that the changes in the growth of gross domestic product and consumer spending are not necessarily an indicator of some big changes in the country’s economy in the future.

Winter slowdowns are quite common and inevitable because they depend on the cold weather and lower spending in the category of inventory. The economy is expected to catch up, and the numbers are anticipated to improve after the winter season gradually, and cold weather are gone.

In the world of nowadays, the significant changes in GDP growth are not rare. Unfortunately, we are witnessing the economic depression and crises in many countries of Europe these days. Many economical experts are working on forming economic forecasts for the world’s economy and for the future of the counties separately, yet the crises still appear as if out of nowhere, unexpected and in most cases they catch the country leaders unprepared to deal with this kind of changes.

World’s strongest financial thought professionals including the ones working for the World Bank and Monetary Fund are involved into preparing a way out of the current situation, yet many economic experts still disagree about the reasons why the most stable and the strongest economies tend to go into collapse from time to time.

Professionals from all around the world are trying to invent a formula that would be able to predict such collapses so that the economies of the world were able to fight the downfalls and crises. The reasons for the unexpected crises could be outdated statistics and methods, not able to keep up with the developing world.

Reference List

Kurtzleben, D. (2014). . USNews. Web.

Rehman, S. (2014). . Web.

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IvyPanda. (2020, April 1). Fourth Quarter GDP Gets a Big Downward Revision. Retrieved from https://ivypanda.com/essays/fourth-quarter-gdp-gets-a-big-downward-revision/

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"Fourth Quarter GDP Gets a Big Downward Revision." IvyPanda, 1 Apr. 2020, ivypanda.com/essays/fourth-quarter-gdp-gets-a-big-downward-revision/.

1. IvyPanda. "Fourth Quarter GDP Gets a Big Downward Revision." April 1, 2020. https://ivypanda.com/essays/fourth-quarter-gdp-gets-a-big-downward-revision/.


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IvyPanda. "Fourth Quarter GDP Gets a Big Downward Revision." April 1, 2020. https://ivypanda.com/essays/fourth-quarter-gdp-gets-a-big-downward-revision/.

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IvyPanda. 2020. "Fourth Quarter GDP Gets a Big Downward Revision." April 1, 2020. https://ivypanda.com/essays/fourth-quarter-gdp-gets-a-big-downward-revision/.

References

IvyPanda. (2020) 'Fourth Quarter GDP Gets a Big Downward Revision'. 1 April.

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