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Free Example of The Real Gross Domestic Product Trends Essay

The United States may be the leading economy in the world. Real Gross Domestic Product (GDP) may be viewed as the output of goods and services produced by labor and property located in a certain country. GDP may be calculated quarterly then each quarter’s data accounted after every three months. The recent data posted on CNBC (2012) indicates that from 1948 to 2012, country’s GDP growth rate averaged at 3.25 percent. March 1950 recorded the peak growth rate at 17.2 percent, whereas the lowest rate ever would be -10.4 percent in March 1958. The economy may be market-oriented; business and private firms make most of the decisions.

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Recent GDP Trends

From the last quarter of 2011 to the third quarter of 2012, the economy experienced an increment in real GDP. Decline in private inventory investments reduced the rate of real GDP in the first quarter of 2012 from the third quarter of the preceding year. In the year 2011, real GDP increased by 1.6 where quarters measure differed. Main contributors to the US economy include; sales of computer, motor vehicle industries, non-residential permanent investments, personal consumption expenditure, inventory, federal government spending, and more exports than imports (Zandi 3). All these components have been alternating in the last four quarters of calculation of the real GDP.

United States experienced a gross domestic product (GDP) expansion of 2%  between the 2nd  and the 3rd quarter of 2012. When writing for Yahoo Finance, Boesler (2012) observed that the rise of real GDP over the third quarter would be linked to the positive contribution from the federal government spending; it decreased in the third quarter by above 9 percent compared to the decline of below 1% in the second quarter. Nonresidential permanent investment registered a downturn of 1 percent in the third quarter compared to a rise 3 percent in the second quarter. Personal consumption expenditure increased in the third quarter; private inventory investment made minor decline and decline in the importation, and an upsurge in exportation of services. The US economy may have suffered considerable hurdles including the Hurricane Sandy.

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The Hurricane Sandy

Hurricane sandy has caused enormous damage in US economy; it occurred in northeastern of United States. The storm occurred in October 2012, made enormous damage on the economy of United States. The storm led to a damage of about 50 billion US dollars. Several businesses were disrupted; lives lost, and power lines disrupted. Many people have been displaced; more than 50 houses swept away by fire, and they were reduced to ashes (Morici 2012). The hurricane sandy  mainly felt affected in Caribbean countries and northeastern of United States. Infrastructure around states of New York and New Jersey like bridges and roads destroyed. A State of Emergency ensued in the states of New York and New Jersey attracting federal government aid. In New York, some businesses closed due  to damage by water, and debris carried from the ocean. Transportation industry received a blow after a power supply cut down.

United States trade dropped for the first time since June due to the effects of hurricane sandy. Government quantified storm with positive and negative effects on the economy. The natural disaster contributed to rise of sales food and beverage. Sales of clothing reduced as traders feared to get to the shops.  Motor vehicle sales reduced with more than one percent due to storm. Thousands of vehicles were destroyed scraps by the storm (Morici 2012). This was a blow to an industry that had largely prospered since 2010.

The hurricane sandy has led to unsure damage with the floods reaching in the airport and subways system in New York. Thousands of flights would be cancelled due to flood of water along the waterways. Subway system closed, and transportation cut down for a few days. These led to a reduced income to the government affecting the rate of real GDP growth (Morici 2012). President ordered the federal government to release the money to rebuild destroyed structures of New York and New Jersey. Damage creates enormous upturn to the federal government spending in the fourth quarter of 2012. The estimation concludes that hurricane sandy would have no much effect on the fourth quarter although they will be a slight reduction of less than 0.5 percent. The rebuilding of destructed structures would bring more change and would be felt later in 2013 quarters.

Due to anxiety, the victims of the disaster need to purchase new household goods. Infrastructural rebuilding is taking place, and people affected may be expected to purchase new clothing’s. The calculation of consumer expenditure is the key measure of economy expenditure.

Likely Risks

The US real GDP growth might be negatively affected by the ongoing war crisis in Middle East. Reduce oil supply and rising price, there will be a downturn in the acceleration of real GDP.  Unemployment slows down increase of the economy due to a small percentage of the population excluded in US workforce. Recent United States elections may indirectly lead to some upheavals in growth of economy in the fourth quarter of 2012 and the first quarter of 2013. The economic growth rate may remain slow until the new Congress settles and inauguration of Obama by 2013 (Zandi 2012).


United States economy has been increasing since down fall in 2009; the real GDP rose at a rate of 2% in the third quarter of 2012 from a 1.3 percent in the second quarter. The federal government has recently increased expenditure,  exports,  personal consumption expenditure, and  lowered imports. Hurricane had enormous significance in the growth of GDP. The affected persons would be seeking to buy new homes hence generation of income. The government might be required to put measures to covert natural catastrophe like hurricane sandy. Nevertheless, economic recovery may be realized by 2013 with the new government.

Code: writers15

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