As the year comes to a close, it is time to look back on the state of America’s economy this year. Gross domestic product, gross national product, exports, job creation, and unemployment are all important factors to take a look at. We will take each one by one.
Gross Domestic Product
Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. The GDP gives a very broad measurement of national economic activity. Although the year has not come to a close, we have reports from the Bureau of Economic Analysis detailing the first three quarters.
The beautiful thing about the GDP measurement is that it is universal. All countries use this same measurement, and therefore, the measurement is consistent across economies. This makes it incredibly easy to compare and contrast the economic activity of various countries.
Gross National Product
The difference between GDP and Gross National Product (GNP) is that while the GDP measures levels of production by any person or entity within the country, the American GNP measures the production of any American or American entity, no matter where it takes place in the world. For example, GNP would include an American corporation that outsourced production to China. Therefore, the GNP is used less frequently and measures a broader scope than the GDP.
Similar to GDP, GNP is used across the planet. Having a universal standard of economic measurement allows for country-to-country comparison. This is truly valuable for economic policy and foreign policy direction.
According to Investopedia, an export is ‘a function of international trade whereby goods produced in one country are shipped to another country for future sale or trade’.
Job Creation and Unemployment Rates
According to Bureau of Labor statistics reports, the average new non-farm job creation throughout the months of September, October, and November 2016 was 176,000 month-to-month. September, new job creation was 208,000; October, new job creation was 142,000; November, new job creation was 178,000.
American economy and job growth will be a fascinating thing to observe under President-elect Trump. He and President Obama have almost completely different priorities, and it will be fascinating to watch them play out. As we end 2016, let us look forward to 2017 and economic changes under a new administration.
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