Nominal GDP measures a country’s Gross Domestic Product using the current prices of goods
and services, giving a view at the current value. To get the formula, you multiply the current
years quantity out put by the current market price. In a June 2022 article on USNews.com, Beth
Braverman explains how a weak GDP can indicate a recession. “Recession” is a temporary
period that an economy suffers from reduced trade and industrial activity. Braverman describes
how a growing GDP indicates a strong economy, while a shrinking GDP is an indication of a
weaking economy. Principal economist, Erik Lundh is quoted in the article as saying “The
nominal number doesn’t really calculate growth, because since it may only be going up because
things cost more than they did a year ago. The real one strips out inflation and compares apples
to apples in terms of value today versus a year ago.”
The article goes on to describe how GDP can be an indicator of a recession, because it is used
to measure the health of the economy. If the GDP is strong, that can mean to a better economy
and better jobs. When the GDP declines, it can mean a weaker economy and less jobs. Nominal
GDP is a measure of a country's gross domestic product at current prices, without taking
inflation into account. In comparison, real GDP measures a country's economic output after
adjusting for the impact of inflation. When it comes to measuring the strength of the economy,
the gross domestic product, or GDP, is one of the most important metrics to keep an eye on.
The Commerce Department announced this week that the United States had experienced two
consecutive quarters of negative GDP growth, meeting a common definition of a recession.
Other economic factors, such as the unemployment rate, can provide a more complete picture
of today's economy when compared to this critical GDP benchmark. A growing GDP indicates
a strong economy, whereas a shrinking GDP indicates a weaker economy and the possibility
of a recession. The Bureau of Economic Analysis in the United States tracks the country's GDP
and releases updated figures quarterly. During the 2020 coronavirus recession, for example,
GDP only fell in one quarter (the second quarter of 2020) before rebounding the following
quarter, but the drop was so steep and widespread that the NBER declared the period a
recession. In most cases, the NBER does not declare a recession until several months have
passed, and in some cases, the announcement comes after the recession has already ended.
However, concerns and fear about a potential recession can sometimes become self-fulfilling.
That's one concern right now, especially with inflation still raging, according to Jonathan
Heckscher, managing director of fixed income and chief investment officer at Fiduciary Trust
International. The nominal gross domestic product is the value of a country's GDP calculated
at the current price level, which means it's not adjusted for inflation.
As noted on The British Broadcasting Corporation (2022) website,
"America's growing trade deficit also subtracted 3.2 percentage points from overall GDP
growth. Exports fell sharply and imports soared, a reflection of strong demand in the US and
weaker economic growth abroad." It was interesting to see that parts of the reduction in the US
overall GDP growth were due to the imports from many companies stocking up due to the
increase in sales pressure resulting from the covid-19 shutdowns. This sales pressure is the
same that resulted in the logistics problems we continue to see today, where ports are backed
up for multiple weeks trying to get ships into the port to be offloaded.
Nominal GDP measures a country’s economic output at current market prices. Nominal GDP
offers proof and precise snapshop of a national economy’s value but since it uses current market
prices it is greatly influenced by inflation. GDP measures the market value of all goods and
services produced by a country, which the bureau of economic analysis calculates by
multiplying price by quantity. In some definitions, the nominal gross domestic product of a
country is its real GDP when changes in prices due to inflation and other market factors are
accounted for. I chose an article that was rather surprising. It was how COVID had impacted
the GDP. he biggest negative shock is recorded in the output of domestic services affected by
the pandemic, as well as in traded tourist services. The pandemic is disproportionately hurting
millions of lower-wage workers in service sectors, who often lack labor protections and work
in close physical proximity to others. Absent adequate income support, many will fall into
poverty, even in most developed economies, worsening already high levels of income
inequality. The effect of school closures could make the educational divide more pronounced,
with possible long-term consequences. The report finds that as the COVID-19 pandemic
worsens, deep-seated economic anxiety—fueled by slower growth and higher inequality—is
increasing. I chose an article from the UN to see how COVID had impacted the economically.
In my terms, the GDP is the current rate for good produced in the country. Currently our prices
on almost everything has soared since Covid and the current political climate seems to not be
helping the pricing. Inflation right now is unbelievable and I'm sure everyone is noticing. It is
important economic data to use for possible forecasting in business and how people may want
to save or spend money in the near future. The increase and decrease in prices really depends
on fluctuation. Many households have not seen raises in their income but are trying to cut back
for spending on the necessities they have to purchase. Rent, food, gas are the most prominent
things. All companies have been effected by the current market and climate and it's all passing
down to the consumers. With the rise in prices, some companies cannot afford to keep paying
their employees or as many of them and that can also cause an increase in unemployment. All
these factors together can make a difference in the economy. If people are not seeing it yet,
they will. Nominal GDP is when economic measures will measure the value if all economic
outputs at its current market price. GDP is in the monetary value of all goods and services that
are produced in a country. With nominal GDP there is no change in price due to inflation. With
it not changing when inflation occurs, nominal GDP can inaccurately report true growth when
comparing year to year. The formula for nominal GDP is Nominal GDP= Real GDP X GDP
Deflator.During the first three months of 2022 the the United States GDP dropped. Economic
activity had declined at an annual rate of 1.4% which there were technical reasons for the
decline. The drop in GDP hinted at the risk that was posed by surging inflation. The price of
everything is going up, inflation is happening right before our eyes especially oil, gasoline, and
food. With all these things going up, we aren't in a recession and that is a good thing.
Nominal GDP is gross domestic product (GDP) evaluated at the current market prices. The
GDP is the monetary value of all the different kinds of goods and services produced in a
country. Nominal differs from GDP in that it changes due to inflation reflecting the rate of
price increase in the economy. The labor department reported today that the CPI (consumer
price index) rose 8.5% in July compared to a year ago from now for the price of every day
goods such as gasoline, groceries and rents. This is below the year over year surge recorded in
June in which prices were unchanged in the one-month period from June until now.The so-
called core prices, which take out volatile measurements like food and energy rose 5.9% from
the year before which is below the h .1% economists suspected matching the reading from
July. This high rate of inflation has created severe financial hardships for most households in
the U.S. who are having to pay more for everyday items like food and rents. Inflation has
largely eroded the strong wage gains seen in recent months according to the labor department.
Looking at nominal GDP from my stand point. Means the rise and fall of our economy. Since
we as a country, had to deal with the covid pandemic. It affected the economy to the point, that
I feel that the country is headed for a huge recession. Gas, food, and clothing just to name a
few things that have been impacted. JetBlue Airways is in the process of buying Spirit Airline.
Spirit Airline is an airline that is budget friendly. I personally have used Spirit Airline in the
past. Spirit Airline is an affordable friendly airline in a pinch. But if JetBlue Airway decides to
finalize buying Spirit Airline, this might change affordable, budget friendly airline tickets,
because JetBlue Airways will not possible be affordable or budget friendly airline ticket prices,
for people on a budget. Spirit Airline originally was offering to merge with Frontier Airline
and Frontier Airline is another affordable, budget friendly airline. The merge with Frontier
Airline did not happen. Spirit Airline and Frontier Airline both were financially affordable
airline tickets. Spirit Airline decided to merge with JetBlue Airway. JetBlue Airways were
originally going to merge with American Airlines, but the justice department sued which
caused the two airlines not to merge. This is one thing or companies that have been affected by
GDP. Nominal GDP means that it rises and falls with the change in price and economic output
in an economy. In the real world, the nominal GDP is usually used to compare GDP to other
economic variables that do not adjust for inflation, including debt.
The article I found talks about the long-term effects of Covid-19 on the economy globally.
Growing restrictions on the movement of people and lockdowns in Europe and North America
are impacting businesses that require physical interaction, like retail trade, leisure & hospitality,
recreation, and transportation services are impacted greatly. They comprise more than a quarter
of all jobs in these economies as a whole. Businesses losing money will likely experience a
dramatic rise in unemployment, turning a supply-side shock into a larger demand-side shock
for the economy.I am sure everyone can express an economic impact due to covid in some way
or another. If it was not for the stimulus checks, I would not be able to provide for my family
during the beginning of Covid. Nominal Gross Domestic Product (GDP), is about the current
prizes regardless of inflation. It measures any country's GDP by utilizing current pricing
without changing due to inflation. To simplify Nominal Gross Domestic Product it evaluates
economic production, and goods and services are calculated at the current market price.
The three main industries that people need to survive are all inflated in prices. Food was ranked
third behind housing (34.9 percent) and transportation (1h percent), these are numbers among
US households. (USDA, online, Economic research service) The United states has not declared
a recession, but with the top three industries GDP that Americans need to survive on the rise,
people are preparing for a recession.
Although, gas prices have started to decline, the prices for gas a year ago were .90 lower than
the current prices today. I also read a post where a realtors stated she is getting more rental
request than home buying request because of the inflation in interest and lack of home building
resources. More people that are seeking to buy a house are being forced to rent.
