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Economic expansion (GDP)

ECONOMIC INDICATOR

Historical graph of the GDP Real

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What is it?

  • The GDP (Gross Domestic Product) measures the total market value of a nation's output of goods and services during a specific time period. It is usually measured on a quarterly basis.
  • Current GDP is based on the current prices of the period being measured. Nominal GDP growth refers to GDP growth in nominal prices (unadjusted for price changes). Real GDP growth refers to GDP growth adjusted for price changes.
  • Calculating Real GDP growth allows economists to determine if production increased or decreased, regardless of changes in the purchasing power of the currency.

Why is it important?

  • This is the most widely-used measure of the overall economic activity and is viewed as a gauge of a country's fundamental economic health.

How do we interpret it?

  • A positive Real GDP number reflects a growing economy; a negative GDP number reflects a declining economy.
  • Two consecutive quarters of GDP decline is generally associated with recession.

Typical historical range

  • As of December 2012, 90% of the U.S. GDP growth rates have ranged from -2.20% to +10.20%.
Footnotes

The source of our data is Bloomberg.

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First used September 2009
Revised 2014

RFS 11939