US Gross Domestic Product (GDP): Difference between revisions

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# government spending (G) -- denotes expenditures on goods and services by the government
# government spending (G) -- denotes expenditures on goods and services by the government
# net exports (NX) -- represents a nation’s exports minus its imports
# net exports (NX) -- represents a nation’s exports minus its imports
These components can be referred to in '''nominal''' or '''real terms.'''  ''Real'' terms are nominal measurements adjusted for inflation.  This is critical for comparing growth from one year to the next ([http://amerimetrics.com/index.php?title=Glossary_of_Common_Terms#:~:text=Britannica-,YOY,-%2D%2D%20means%20year%20over '''YOY''' or '''YOY Δ''']).  For example, if GDP increased from 100 in 2020 to 110 in 2021, at first glance it looks like GDP increased by 10% YOY.  If inflation was 5% YOY, however, then ''real GDP growth'' was actually only 5%.
 
=== How do we measure GDP and changes in GDP? ===
The four components (C, I, G, and NX) can be referred to in '''nominal''' or '''real terms.'''  ''Real'' terms are nominal measurements adjusted for inflation.  This is critical for comparing growth from one year to the next ([http://amerimetrics.com/index.php?title=Glossary_of_Common_Terms#:~:text=Britannica-,YOY,-%2D%2D%20means%20year%20over '''YOY''' or '''YOY Δ''']).  For example, if GDP increased from 100 in 2020 to 110 in 2021, at first glance it looks like GDP increased by 10% YOY.  If inflation was 5% YOY, however, then ''real GDP growth'' was actually only 5%.


The below table show's a real example (in billions of US $):
The below table show's a real example (in billions of US $):
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| style="text-align:center;" | YOY Δ || style="text-align:right;" | 2,271.0 || +10.7 || style="text-align:right;" | 1,173.4|| +5.8
| style="text-align:center;" | YOY Δ || style="text-align:right;" | 2,271.0 || +10.7 || style="text-align:right;" | 1,173.4|| +5.8
|}
|}
=== How do we interpret GDP and GDP Δ measurements? ===
First, it is important to acknowledge the ''relative'' size of each of the four components:
C = [http://amerimetrics.com/index.php?title=Glossary_of_Common_Terms#:~:text=notate%20change.-,~,-%2D%2D%20is%20a%20symbol '''~''']68%
I = ~18%
G = ~17%
NX = ~-3%
at only ''three'' of the ''four'' components are significant.


=== 90 Year US GDP Table ===
=== 90 Year US GDP Table ===

Revision as of 12:40, 23 September 2024

What is GDP?

Gross domestic product, or GDP, is the most widely accepted measurement of the health of a nation's economy. It is comprised of four components:

  1. consumption (C) -- represents private-consumption expenditures by households and nonprofit organizations
  2. investment (I) -- refers to business expenditures by businesses and home purchases by households
  3. government spending (G) -- denotes expenditures on goods and services by the government
  4. net exports (NX) -- represents a nation’s exports minus its imports

How do we measure GDP and changes in GDP?

The four components (C, I, G, and NX) can be referred to in nominal or real terms. Real terms are nominal measurements adjusted for inflation. This is critical for comparing growth from one year to the next (YOY or YOY Δ). For example, if GDP increased from 100 in 2020 to 110 in 2021, at first glance it looks like GDP increased by 10% YOY. If inflation was 5% YOY, however, then real GDP growth was actually only 5%.

The below table show's a real example (in billions of US $):

Year Nominal GDP % Real GDP %
2020 21,323.0 20,234.2
2021 23,594.0 21,407.6
YOY Δ 2,271.0 +10.7 1,173.4 +5.8

How do we interpret GDP and GDP Δ measurements?

First, it is important to acknowledge the relative size of each of the four components: C = ~68% I = ~18% G = ~17% NX = ~-3%

at only three of the four components are significant.

90 Year US GDP Table

Sources:

Year President Political Party 1:Gross domestic product 1:GDP Rank 2:Consumption Rank 7:Private Investment Rank 22:Govt Rank
1930 Hoover Republican -8.5 93 94 91 86
1931 Hoover Republican -6.4 92 93 92 72
1932 Hoover Republican -12.9 95 95 95 6
1933 Roosevelt Democratic -1.2 87 90 6 9
1934 Roosevelt Democratic 10.8 5 5 3 89
1935 Roosevelt Democratic 8.9 6 10 2 59
1936 Roosevelt Democratic 12.9 4 2 9 90
1937 Roosevelt Democratic 5.1 24 39 12 5
1938 Roosevelt Democratic -3.3 91 89 90 82
1939 Roosevelt Democratic 8 9 18 11 85
1940 Roosevelt Democratic 8.8 7 22 5 67
1941 Roosevelt Democratic 17.7 2 6 14 94
1942 Roosevelt Democratic 18.9 1 91 94 95
1943 Roosevelt Democratic 17 3 54 93 93
1944 Roosevelt Democratic 7.9 11 53 15 88
1945 Roosevelt-Truman Democratic -1 85 9 7 3
1946 Truman Democratic -11.6 94 1 1 1
1947 Truman Democratic -1.1 86 75 74 2
1948 Truman Democratic 4.1 35 69 10 78
1949 Truman Democratic -0.6 83 55 89 87
1950 Truman Democratic 8.7 8 7 4 24
1951 Truman Democratic 8 10 79 65 92
1952 Truman Democratic 4.1 36 46 83 91
1953 Eisenhower Republican 4.7 27 27 50 81
1954 Eisenhower Republican -0.6 82 72 76 4
1955 Eisenhower Republican 7.1 13 4 13 8
1956 Eisenhower Republican 2.1 66 51 68 23
1957 Eisenhower Republican 2.1 68 60 75 75
1958 Eisenhower Republican -0.7 84 83 82 64
1959 Eisenhower Republican 6.9 14 16 16 54
1960 Eisenhower Republican 2.6 58 57 62 29
1961 Kennedy Democratic 2.6 59 71 63 76
1962 Kennedy Democratic 6.1 17 25 21 79
1963 Kennedy-Johnson Democratic 4.4 32 31 42 50
1964 Johnson Democratic 5.8 18 12 38 53
1965 Johnson Democratic 6.5 16 8 20 62
1966 Johnson Democratic 6.6 15 15 32 84
1967 Johnson Democratic 2.7 55 47 73 83
1968 Johnson Democratic 4.9 25 13 48 65
1969 Nixon Republican 3.1 48 38 51 22
1970 Nixon Republican 0.2 76 65 79 12
1971 Nixon Republican 3.3 46 35 28 13
1972 Nixon Republican 5.3 23 11 25 17
1973 Nixon Republican 5.6 20 26 27 19
1974 Nixon-Ford Republican -0.5 81 87 81 49
1975 Ford Republican -0.2 79 68 87 48
1976 Ford Republican 5.4 22 17 17 25
1977 Carter Democratic 4.6 29 29 18 34
1978 Carter Democratic 5.5 21 28 23 57
1979 Carter Democratic 3.2 47 67 56 39
1980 Carter Democratic -0.3 80 86 85 43
1981 Reagan Republican 2.5 63 81 33 32
1982 Reagan Republican -1.8 88 80 86 42
1983 Reagan Republican 4.6 28 14 30 69
1984 Reagan Republican 7.2 12 20 8 66
1985 Reagan Republican 4.2 33 23 66 80
1986 Reagan Republican 3.5 45 32 64 77
1987 Reagan Republican 3.5 44 43 60 58
1988 Reagan Republican 4.2 34 30 61 35
1989 Bush Republican 3.7 41 48 55 56
1990 Bush Republican 1.9 70 74 72 61
1991 Bush Republican -0.1 78 84 80 33
1992 Bush Republican 3.5 42 37 41 27
1993 Clinton Democratic 2.7 56 40 37 16
1994 Clinton Democratic 4 38 33 22 21
1995 Clinton Democratic 2.7 57 52 57 26
1996 Clinton Democratic 3.8 40 42 35 31
1997 Clinton Democratic 4.4 31 36 24 37
1998 Clinton Democratic 4.5 30 21 29 51
1999 Clinton Democratic 4.8 26 19 36 63
2000 Clinton Democratic 4.1 37 24 44 40
2001 Bush Republican 1 75 64 78 70
2002 Bush Republican 1.7 73 61 69 74
2003 Bush Republican 2.8 53 45 54 47
2004 Bush Republican 3.8 39 34 31 36
2005 Bush Republican 3.5 43 41 45 30
2006 Bush Republican 2.8 52 49 58 38
2007 Bush Republican 2 69 66 71 41
2008 Bush Republican 0.1 77 85 84 52
2009 Obama Democratic -2.6 90 88 88 68
2010 Obama Democratic 2.7 54 76 19 20
2011 Obama Democratic 1.6 74 77 43 7
2012 Obama Democratic 2.3 65 82 26 11
2013 Obama Democratic 2.1 67 78 40 10
2014 Obama Democratic 2.5 61 56 46 14
2015 Obama Democratic 2.9 51 44 47 45
2016 Obama Democratic 1.8 72 62 67 46
2017 Trump Republican 2.5 64 59 53 28
2018 Trump Republican 3 49 58 49 44
2019 Trump Republican 2.5 60 73 59 71
2020 Trump Republican -2.2 89 92 77 60
2021 Biden Democratic 5.8 19 3 34 18
2022 Biden Democratic 1.9 71 63 52 15
2023 Biden Democratic 2.5 62 70 70 73
2024 Biden Democratic 3 50 50 39 55

40 Year GDP Chart

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