What To Expect From U.S. GDP
Karina Fabi | Jul 27, 2016 10:14PM ET
A positive US GDP is expected for this Friday. The official forecast is agreed at 2.6% versus 1.1% previous final GDP.
US GDP data comes in three versions, or results, and is published monthly: advanced GDP, preliminary GDP and final GDP. The advanced is the first to publish, and as such tends to have the greatest impact because it is the first hint as to how the economy is evolving. The differences between the three versions are the amount of information collected and revised data for the final GDP outcome.
The American economy is the most important worldwide in nominal terms and the second largest in purchasing power, representing 22% of nominal global GDP and 17% of gross world product. Growth averaged 3.8% from 1946 to 1973. However, since 1973 growth has decelerated, averaging 2.7% GDP. Household income has also stagnated 0.2% a year, averaged at 2.5%.
The financial crisis of 2007-2008 ended with a GDP loss of 5.0% from March 2008 to March 2009. Other financial crises paid a price of 3.7%, followed by the oil crisis in 1973 with a balance of 3.1%. The oil crisis of 1981-83 turned out 2.9% in losses. From 1990-1991, GDP fell 1.3%, and finally 0.3% in 2001.
In contrast, periods of American GDP growth occurred in the early 1960s to mid-1969, expanding by 5.1% annually. From late 1982 to mid-1991, after the slowdown, GDP averaged 4% growth annually.
The forex market on Thursday discounts the trading opportunity for Friday. According to Sebastian Orellana Terrsy, CEO of Azul Capital Markets, if the advanced GDP is as positive as the forecast, it will be a good opportunity to short EUR/USD and go long on USD/CAD. A negative GDP could end up being good for shorting USD/CAD and a long opportunity for EUR/USD.
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