Importance:
Definition: The GDP report includes inflation information. There are a number of price indexes published in the GDP report. First, the Implicit Price Deflator which measures price changes and changes in spending patterns; second, the Gross Domestic Purchases Prices; third, the Fixed-Weight Price Deflator, which measures price changes for an established basket of over 5,000 goods and services. While these price deflator data are published quarterly, some related price data such as the Consumer Price Index (CPI) and the Producer Price Index (PPI) are published instead on a monthly basis.
Related Indicators:
Source: Department of Commerce, BEA, NIPA dataset.
Frequency: Quarterly, revised monthly. The GDP for a given quarter and its associated price deflators are released in the first month following a quarter as the "advance estimate". The "preliminary estimate" is published in the second month, followed by the "revised" estimate in the third month.
Availability: Three to four weeks
following the reported quarter
Direction:
Timing:
Volatility:
Likely Impact on Financial Markets:
High price inflation is bad news for the bond market. A weak % rate
of change of theprice deflators is received favorably by bond investors;
a strong inflation report causes concern the Fed might need to intervene
and raise interest rates--a negative for the fixed income market.
WEB Links
Graphs of the latest Gross Domestic Purchases Prices data from The Economic Statistics Briefing Room of the White House
The latest GDP report from BEA
You can see GDP Deflator charts with theEconomic Chart Dispenser
You can create customized Price Deflator Charts with the Economic Chart Maker Tip: type "GROSS DOMESTIC PRODUCT" in the Label section of the form and choose the transformation of the data you are interested in.
An analysis of the GDP report from First Union
An Analysis
of the GDP report from Morgan Stanley's Stephen Roach