This chart shows the quarter-over-quarter, annualized change in the Gross Domestic Product (GDP) and Consumer Price Index (CPI), in relation to the S&P 500. Real GDP is widely considered the primary, most important measurement of the US economy. However, since the GDP data are released well after the sampling periods, and revised for many months in the future, Real GDP is difficult to use in a stock market timing strategy. It may be a coincident indicator, at best, and not suitable for a real-time stock market timing indicator.
NOTE: "Real" is an economic term indicating that the values have already been adjusted for inflation. So, these Real GDP values are inflation-adjusted.
The gray bars indicate recessions, as defined by the National Bureau of Economic Research (NBER), and not by the textbook definition of 2 consecutive quarters of negative real GDP growth.
Real GDP (Gross Domestic Product) Chart
( HINT: Click-and-drag left-to-right on the top chart (S&P 500) to zoom in to a specific date range. Double-click on S&P 500 chart to zoom back out. )