what is gdp report

U.S. gross domestic product, adjusted for inflation, increased at an annual rate of 2.9 percent in the fourth quarter of 2022, the Commerce Department said Thursday. That was down slightly from a 3.2 percent growth rate in the third quarter. Consumer spending, the bedrock of the U.S. economy, grew at a 2.1 percent rate.

Some countries may have a high per-capita GDP but a small population, which usually means they have built up a self-sufficient economy based on an abundance of special resources. At a basic interpretation, per-capita GDP shows how much economic production value can be attributed to each individual citizen. This also translates to a measure of overall national wealth since GDP market value per person also readily serves as a prosperity measure. To estimate real GDP, https://www.forex-world.net/ the BEA constructs chain indexes that allow it to adjust the value of the goods and services to the change in prices of those goods and services. When a country’s GDP is negative for two consecutive quarters it is considered to be in a recession. In other economic news Thursday, the Labor Department reported that jobless claims totaled 210,000 for the week ended Oct. 21, up 10,000 from the previous period and slightly ahead of the Dow Jones estimate for 207,000.

A soaring trade deficit detracted from U.S. economic growth figures.

Nominal GDP is evaluated in either the local currency or U.S. dollars at currency market exchange rates to compare countries’ GDPs in purely financial terms. In the United States, G.D.P. figures have traditionally been reported at an annualized rate, meaning the amount the economy would have grown or shrunk if the quarter-to-quarter change had persisted for an entire year. The G.D.P. figures don’t directly account for other aspects of the housing market, such as prices — which have fallen somewhat but haven’t plunged — or rents, which rose rapidly for much of last year. The question now is whether the United States’ resilience can continue in 2023. Inflation remains too high by many measures, and the Fed is expected to continue increasing rates in an effort to bring prices under control.

what is gdp report

Critics worry that it masks inequality, which is why there is a push in some corners for economic growth measures to be disaggregated to show exactly who growth is happening for, and to make clear that it overlooks qualitative aspects of life. They also argue that concentrating too much on economic growth overlooks the costs of that growth — on the environment, on workers, and on the general state of the world. Many economists argue that it is more accurate to use purchasing power parity GDP as a measure of national wealth. By this metric, China is actually the world leader with a 2022 PPP GDP of $30.33 trillion, followed by $25.46 trillion in the United States. The biggest downside of this data is its lack of timeliness; investors only get one update per quarter, and revisions can be large enough to significantly alter the percentage change in GDP.

White House plays down first-quarter growth decline.

GNP uses the production approach, while GNI uses the income approach. With GNI, the income of a country is calculated as its domestic income, plus its indirect business taxes and depreciation (as well as its net foreign factor income). The figure for net foreign factor income is calculated by subtracting all payments made to foreign companies and individuals from all payments made to domestic businesses. The production approach is essentially the reverse of the expenditure approach. Whereas the expenditure approach projects forward from costs, the production approach looks backward from the vantage point of a state of completed economic activity.

  1. In context, it’s an important tool used to assess the state of economic activity.
  2. Oil prices rose sharply this year after Russia’s invasion of Ukraine.
  3. Means of calculating GDP have also evolved continually since its conception to keep up with evolving measurements of industry activity and the generation and consumption of new, emerging forms of intangible assets.
  4. Spending on health care also increased, adding 0.4 percentage points to the annual rate of economic growth.
  5. The income approach represents a kind of middle ground between the two other approaches to calculating GDP.

A slowdown in home construction, they warn, could be good for the country’s short-term inflation picture, but bad for its longer-run affordability crisis. In a speech on Thursday, Treasury Secretary Janet L. Yellen defended the scale of the efforts to support the economy. In the first quarter, slower growth in inventories shaved close to a percentage point off G.D.P. growth. Companies raced to build up inventories in late 2021 to make sure supply-chain disruptions didn’t leave them with bare shelves during the holiday season.

GDP was primarily the result of a jump in many areas, including consumer spending, investment in private inventory, government spending, and fixed investment in the residential and nonresidential industries. Consumer spending, as measured by personal consumption https://www.forexbox.info/ expenditures, increased 4% for the quarter after rising just 0.8% in Q2, and was responsible for 2.7 percentage points of the total GDP increase. Gross private domestic investment surged 8.4% and government spending and investment jumped 4.6%.

Since GDP is based on the monetary value of goods and services, it is subject to inflation. Of all the components that make up a country’s GDP, the foreign balance of trade is especially important. The GDP of a country tends to increase when the total value of goods and services that domestic producers sell to foreign countries exceeds the total value of foreign goods and services that domestic consumers buy. When this situation occurs, a country is said to have a trade surplus. In economics, gross domestic product (GDP) is how much a place produces in an amount of time.

U.S. GDP grew at a 4.9% annual pace in the third quarter, better than expected

She also expressed support for the proposed climate and tax legislation that Senate Democrats unveiled on Wednesday evening, suggesting that it would help ease inflation. The bill aims to reduce prescription drug costs and provide expanded tax credits for electric vehicles while raising taxes on large companies and ramping up enforcement of the tax code. I’m not talking about less, I’m talking about more — more safety, more creativity, more opportunities to do what you want to do. And less slaving away for somebody who will dispose of you like a hot potato when they don’t like you anymore or have financial reasons to let you go.

That could allow the Fed to raise rates more slowly, reducing the risk that it will go too far in cooling off the economy. Economic growth remained solid at the end of last year as the strong job market and cooling inflation allowed Americans to keep spending despite fears of a recession. Put differently, the United States as a whole — consumers, businesses, nonprofit organizations, the government — spent more in the first quarter, but got less in return in goods and services. Besides dampening the national mood, inflation has been a palpable force of financial precariousness among lower-income families. Many have been relying on declining cash reserves built up during the pandemic to cushion them against price increases.

“Going forward, the consumer’s not going to spend at the same rate, the government is not going to spend at the same rate, and businesses seem to be slowing down their spending as well,” Arone said. “This suggests this might be the peak GDP figure, at least in the next few quarters.” But now — despite ongoing disruptions tied to the pandemic and new challenges, like high inflation — economic data is beginning to look more normal.

The U.S. economy contracted in the first three months of the year, but strong consumer spending and continued business investment suggested that the recovery remained resilient. Other researchers are working on developing measures of economic growth that integrate not just production of goods and services — which themselves can accelerate climate change — but environmental and social elements as well. GDP per capita is a measurement of the GDP per person in a country’s population. It indicates that the amount of output or income per person in an economy can indicate average productivity or average living standards.

Gross domestic product fell by 0.2 percent in the second quarter, after a 0.4 percent decline in the first, fueling fears that a recession may have already begun. This is the true sign of a truly hegemonic ideology — you don’t even have to think about it anymore. But when you break it down, we do, in fact, think about GDP all the time. On the level of the individual, it is like more income, better savings, better returns, better investments. None of these things are important to you in and of themselves. I have done interviews with corporate CEOs who very frankly admit that the business model they’re currently operating under is not sustainable, that it will hurt the world and the planet in ways that are irreversible.

Is a High GDP Good?

In an increasingly global economy, GNI has been put forward as a potentially better metric for overall economic health than GDP. Because certain countries have most of their income withdrawn abroad by foreign corporations and individuals, their GDP figure is much higher than the figure that represents their GNI. Real GDP accounts for changes https://www.day-trading.info/ in market value and thus narrows the difference between output figures from year to year. If there is a large discrepancy between a nation’s real GDP and nominal GDP, this may be an indicator of significant inflation or deflation in its economy. Economists use a process that adjusts for inflation to arrive at an economy’s real GDP.