Gross Domestic Product

Data source: Commerce Department Bureau of Economic Analysis

Gross domestic product is the most commonly used measurement of broad economic activity. For the United States, it represents the total value of goods and services produced inside the borders of the country. (That includes the output of foreign-owned companies operating inside the United States and stands in contrast to gross national product, which is the sum of all goods and services produced using U.S. capital, regardless of the country of production.) Real GDP is generally considered a better figure to look at when comparing the change from one period to another because it eliminates changes caused by inflation (or deflation). Current-dollar, or nominal, GDP shows the output of a particular period using value at that time.

Glossary

• Current-dollar: Measurements based on the value of money at the time of reporting.


• Inflation-adjusted: Measurements based on a recalibration of the value of money that take into account the loss of purchasing power of the dollar due to price inflation. Inflation-adjustment measurements are intended to reflect the "real" value of money at a certain point in time relative to some fixed date to provide a level base for comparing dollar figures. The Bureau of Economic Analysis adjusts its real figures to 2009 dollars for national data and 2005 dollars for regional/state data.


• Gross domestic product (GDP): The size of the U.S. economy, based on the value of all goods produced and services provided inside the U.S. borders. GDP is measured in current dollars. (link to current dollar).


• Real GDP: Inflation-adjusted GDP, represented in 2009 dollars for national data or 2005 dollars for regional/state data.


• Seasonally adjusted at an annual rate: A mathematical adjustment that removes predictable seasonal variations in statistics, providing a level base for comparing figures over time. Numerous fluctuations in economic activity result from holiday gift-buying patterns, typical vacation times and changes associated with school years, just to name a few. As a consequence, all subsets of statistics used to compile GDP figures are adjusted to account for past seasonal patterns of economic activity. GDP figures in CQ Economy Tracker shown for quarterly time periods are seasonally adjusted at an annual rate.