The iPhone 6 and the GDP

I recently read an interesting article on the effect of the new iPhone 6 on the United States' Gross Domenstic Product (GDP). We learned in Macro class that one of the things that factors into the calculation of the GDP is consumption. You would think that the release of the new iPhone, what with all of the people buying it, and wanting to buy it, that the overall expenditure would be greatly increased. However, this is actually not the case. 

According to Paul Dales, an economist at Capital Economics, "...those who purchase iPhones tend to forgo the purchase of other items — either by postponing spending in advance or by cutting back afterwards. In other words, the release of a new iPhone model appears to have some effect on the timing of consumption, but not on the overall level."

This is surprising to me, because I had not realized that people would cut back on spending, so even though there is a great new product that people are spending a lot of money on, it is hardly effecting the GDP.

Read the article here: http://www.cnbc.com/id/102053376

:)