GDP

Definition

Gross Domestic Product. The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.

GDP Reporting
The GDP report is released at 8:30 am EST on the last day of each quarter and reflects the previous quarter. Growth in GDP is what matters, and the U.S. GDP growth has historically averaged about 2.5-3% per year but with substantial deviations. Each initial GDP report will be revised twice before the final figure is settled upon: the "advance report" is followed by the "preliminary report" about a month later and a final report a month after that. Significant revisions to the advance number can cause additional ripples through the markets.

The GDP numbers are reported in two forms: current dollar and constant dollar.


Gross National Product (GNP)

It is important to differentiate Gross Domestic Product from Gross National Product (GNP). GDP includes only goods and services produced within the geographic boundaries of the U.S., regardless of the producer's nationality. GNP doesn't include goods and services produced by foreign producers, but does include goods and services produced by U.S. firms operating in foreign countries.

For further explanation, see GDP vs. GNP – What’s the Difference?.

Use GDP in a sentence

Many industrialized countries have a higher GDP per capita rating than third world countries due to their ability to create more goods and services.

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