Just
the FAQs: Gross Domestic Product
What
is gross domestic product?
Gross domestic product (GDP) is the output of goods and services produced by
labor and property located in the United States. It is calculated based on
national spending, sales, investment, wages and salaries, business profits,
exports, and government activity.
GDP is commonly expressed in terms of its percentage growth, seasonally adjusted
at an annual rate. For example, on the news you might hear that “the economy
grew at a 5 percent rate during the first quarter.” This means that given the
rate of growth in the first quarter and in light of certain seasonal factors,
the economy was on track to grow 5 percent for the entire year.
Who measures GDP?
The U.S. Department of Commerce’s Bureau of Economic Analysis (BEA), one of
the agencies under the responsibility of the executive branch.
When?
Quarterly. Advance, preliminary, and final estimates are issued respectively in
the three months following the quarter being measured. Given the complexity of
measuring a $10 trillion economy, it’s not uncommon for the Commerce
Department to revise GDP figures for a particular period months or even years
later as more information becomes available.
Why is GDP significant?
The health of the U.S. economy is of tremendous significance not only to U.S.
residents but to several other nations that depend on the United States for
trade. GDP is regarded as the most comprehensive, accurate tool for assessing
economic health.
Gross domestic product has been ranked as one of the three most influential
measures that affect U.S. financial markets. The Department of Commerce has
recognized GDP as its greatest achievement of the 20th century.
Source: Bureau of Economic Analysis
©
2002 Emerald Publications
