Gross Domestic Product-GDP

Release Date: Last Day of the Quarter
Release Time: 8:30AM EST
Coverage: Previous Quarter
Released By: Commerce Department

GDP represents the total market value of all final goods and services produced in a country in a given year. It includes consumption, government purchases, investments, and the trade balance (exports minus imports). It is the broadest indicator of the economic output and growth, and probably the most important indicator of the economic wellbeing of a country.

While measured annually, monthly statistics are also released. GDP reflects how fast a country's economy is growing. The U.S. GDP growth has historically averaged about 2.5-3% per year but with substantial deviations. Increasing inventories can indicate that growth is slowing, or consumer demand is changing. Meanwhile the "constant dollar GDP", also known the real GDP, represents the quantity of economic output, which is used in measuring the overall rate of economic growth.

Each initial GDP report is revised twice before the final figure is settled upon: The Commerce Department releases an advance report followed by the preliminary report about a month later and a final report a month after that. Significant revisions to the advance number can move the markets. The GDP numbers are reported in two forms: current dollar and constant dollar. Current dollar GDP equals the market value of goods and services produced. It is calculated using today's dollars and makes comparisons between time periods difficult because of the effects of inflation. Constant dollar GDP, also known the real GDP, solves this problem by converting the current information into some standard era dollar. This compensates for the effects of inflation and allows easy comparisons between periods. Constant dollar GDP represents the quantity of economic output, which is used in measuring the overall rate of economic growth.

Gross Domestic Product vs. Gross National Product (GNP). GDP only includes goods and services produced within the geographic boundaries of the United States, regardless of the producer's nationality. GNP does not include goods and services produced by foreign producers, but does include goods and services produced by U.S. firms based abroad. GDP replaced gross national product (GNP) as the primary measure of U.S. production in 1991.

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