U.S. Economy: Software Industry Macroeconomics

After four consecutive quarters of accelerating growth in 2011, economic expansion in 2012 has not materialized, and the BEA has repeatedly issued downward revisions to previously released GDP growth numbers that were already anemic.

This excerpt is from our complimentary Q3 2012 Software Industry Financial Report which can be downloaded here:  http://www.softwareequity.com/research_reports.aspx

GDP is best defined as the total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

In September, the Bureau of Economic Analysis (BEA) lowered its estimate of GDP growth in the second quarter to 1.3% from its initial estimate of 1.7%.  After four consecutive quarters of accelerating growth in 2011, economic expansion in 2012 has not materialized, and the BEA has repeatedly issued downward revisions to previously released GDP growth numbers that were already anemic (Figure 1).  The BEA’s initial estimate of 2.0 growth in the third quarter confirms that meaningful and sustained economic growth remains elusive.

An early October employment report released by the U.S. Bureau of Labor Statistics indicated the unemployment rate unexpectedly fell below 8% for the first time in nearly four years.  However the surprisingly good news was called into doubt by a separate survey of employers, watched closely by Wall Street, showed businesses added 114,000 jobs in September, marking a slowdown in hiring, after July and August were revised significantly higher.

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