This is it. The ur-metric. The Platonic form of economic figures. Everything else we look at is just an aspect, a shadow, of the Gross Domestic Product. Everything else measures portions of the economy, but the Gross Domestic Product is the economy.
Of course, what we have today isn't all that impressive. Last month, we got an initial release of data, subject to revision twice. That data showed that GDP grew at an annual rate of 1.3% for the quarter (substantially missing expectations), and that the GDP price index increased at an annual rate of 3.2% (also badly missing expectations). Current-dollar personal income increased 4.2%, personal current taxes increased $22.6 billion, and personal outlays increased 3.1%.
This month, we get the initial revisions. So we're a little closer to knowing how the economy actually performed in Q2, but we won't have any actual number until this time next month. The Econoday-surveyed analysts are pessimistic, expecting the Q2 GDP growth to be revised downwards to 1.1%, although they are also expecting the GDP price index growth to be revised downwards to 2.3%.
The Bureau of Economic Analysis provides the actual numbers in their Gross Domestic Product, 2nd quarter 2011 (second estimate) report, and it is a gut punch. The first revision has adjusted GDP downwards to an annual rate of 1.0% (missing expectations, but still better than Q1's 0.4% growth), while the GDP price index has been adjusted upwards to 3.3%. Yes, that means that economic growth is trending downward while costs are increasing.
So, yeah. Not a good sign, and I would expect the markets to react in a negative fashion. Any overwhelming hysteria will probably hold off until around 10:30 or so, because Federal Reserve Chairman Ben Bernanke will be speaking on the economy at a Kansas City Fed conference at 10 AM today.