The GDP (Gross Domestic Product) represents the annualized change in the value of all goods and services produced by an economy.
The GDP number comes in three releases: advanced, preliminary and final, and the most important one is the advanced GDP release as it shows traders the most likely number we’re going to have. Revisions may look different, but there is usually only small deviations from the actual number released when the advanced GDP was issued.
Because this data is released on a quarterly basis, it is multiplied by four. The GDP is the broadest measure of economic activity and the primary gauge of economic health. Therefore, when data is released and it goes negative for example, it shows an economy in recession and troubles on the horizon. On the other hand, positive values indicate an expending economy and that specific number shows the pace of the expansion.
The important most things to take into consideration when looking at the GDP indicator are the following:
- release date: quarterly, about 60 days after the quarter ends;
- release time: 12:30 GMT, during the North American trading session;
- brings extreme volatility levels;
- first tier data;
- closely watched by market participants.