Gross Domestic Product

an economic indicator that measures the value of all goods and services produced by the economy within its boundaries and is the nation's broadest gauge of economic health. GDP is divided among personal consumption, investment, net exports, and government spending. Consumption makes up roughly two-thirds of the total. GDP is normally stated in annual terms, though data are compiled and released quarterly. The U.S. Bureau of Economic Analysis releases an advance estimate of quarterly GDP, followed by a "preliminary" estimate and a "final" figure. It is reported as a "real" figure, that is, economic growth minus the impact of inflation. The figure is tabulated on a quarterly basis, coming out in the month after a quarter has ended. It is then revised at least twice, with those revisions being reported once in each of the months following the original release. Changes in the GDP of the United States are calculated quarterly and announced in annualized terms (what the annual change would be if the quarter's pace of growth or contraction continued for a year). GDP reports appear in most daily newspapers and on-line at services like America Online. Also visit the federal government statistics Web site on the Internet at www.bea.gov/bea/newsrel/gdpnewsrelease.htm, www.fedstats.gov/, or www.economicindicators.gov. GDP is often a measure of the state of the economy. For example, many economists speak of recession when there has been a decline in GDP for two consecutive quarters. The GDP in dollars and real terms is a useful economic indicator.