GDP is one of the key measures of a nation’s economic performance. This DataPost outlines the components of GDP and places these components within the context of recent values published by the Bureau of Economic Analysis.

1. GDP
Measuring the Economy
Date last updated: September 14, 2020
DATAPOST
Federal Reserve Bank of San Francisco
Economic Education

2. GDP – Did You Know?
$6.8
$9.4
$13.1
$15.6
$3
$6
$9
$12
$15
$18
1980 1990 2000 2010
Annual Real U.S. GDP
(Trillions of chained 2012 dollars)
Real GDP (adjusted for inflation)
nearly doubled in value between
1980 and 2000. In 2010, real GDP
reached $15.6 trillion.
Known As
• Gross Domestic Product
• National Output
• Measure of the Economy’s Health
Calculation
Data
Reports
• The Bureau of Economic Analysis (BEA) is
responsible for calculating values of GDP
• The BEA publishes estimates on an annual and
quarterly basis
• The “advanced” estimates of GDP are released
roughly four weeks after the end of each quarter
(January, April, July, and October)
• “Revised” estimates incorporate more complete
and accurate source data
Source: Bureau of Economic Analysis
DATAPOST www.frbsf.org/education/teacher-resources/datapost FRBSF Economic Education
Three ways to measure national output:
• Expenditure Approach: sum of goods and services sold
to final users (this is the most common approach)
• Income Approach: sum of income payments and other
costs incurred in the production of goods and services
• Value-Added Approach: sum of the value added at
each stage of production

3. Components of GDP
(Expenditure Approach)
-$2
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
$22
Real GDP in 2019
(Trillions of chained 2012 dollars)
69% [C] = $13.24
18% [I] = $3.44
Consumption
e.g., durables and nondurables
[C]
Investment
e.g., business investment in
equipment and factories
[I]
Government Spending
e.g., government purchases of
goods and services
[G]
Net Exports
e.g., U.S. exports to other
countries, less imports
[X]
-5% [X] = $-0.92
17% [G] = $3.30
Sources: Bureau of Economic Analysis &
FRBSF Calculations
www.frbsf.org/education/teacher-resources/datapost FRBSF Economic EducationDATAPOST

4. U.S. Real GDP
by major spending category
-$2
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
1950 1960 1970 1980 1990 2000 2010
(Annual values for years shown,
trillions of chained 2012 dollars)
Consumption
Investment
GovSpend
Net Exports
Source: Bureau of Economic Analysis
www.frbsf.org/education/teacher-resources/datapost FRBSF Economic EducationDATAPOST

5. $12
$13
$14
$15
$16
$17
$18
$19
$20
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Bureau of Economic Analysis
U.S. Real GDP by Quarter
(Trillions of chained 2012 dollars, SAAR)
www.frbsf.org/education/teacher-resources/datapost FRBSF Economic EducationDATAPOST

6. $12
$13
$14
$15
$16
$17
$18
$19
$20
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Source: Bureau of Economic Analysis
2020:Q2
$17.28
Gray bars indicate periods of economic
recession according to the NBER
Business Cycle Dating Committee
Seasonally adjusted
annual rate
An inflation-adjustment
method using 2012 dollars as
the base year of comparison
Annotated Chart Notes
U.S. Real GDP by Quarter
(Trillions of chained 2012 dollars, SAAR)
2009:Q2
$15.13
2001:Q4
$13.28
www.frbsf.org/education/teacher-resources/datapost FRBSF Economic EducationDATAPOST

7. Real Gross Domestic Product (GDP)
Q4/Q4 Percent Change
Source: Bureau of Economic Analysis & FRBSF Calculations
Note: Values are percent change using trillions of chained 2012 dollars (SAAR)
Measuring Changes in GDP: Yearly % Change
-4
-3
-2
-1
0
1
2
3
4
5
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
www.frbsf.org/education/teacher-resources/datapost FRBSF Economic EducationDATAPOST

8. -4
-3
-2
-1
0
1
2
3
4
5
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Real Gross Domestic Product (GDP)
Q4/Q4 Percent Change
Source: Bureau of Economic Analysis & FRBSF Calculations
Note: Values are percent change using trillions of chained 2012 dollars (SAAR)
% change from
2001:Q4 to 2002:Q4
Real GDP dropped nearly
3% between 2007:Q4 and
2008:Q4
The “Great Recession” is
the 18-month period from
Dec 2007 to June 2009,
according to the NBER
Annotated Chart Notes
Measuring Changes in GDP: Yearly % Change
www.frbsf.org/education/teacher-resources/datapost FRBSF Economic EducationDATAPOST

9. What Do You Think?
1. How has consumer spending changed since
1950? How have net exports changed since
1980? (See slide 4)
2. What was the lowest level of real GDP during
the Great Recession? (See slide 5)
3. How does real GDP growth in the Great
Recession compare to early 2000s recession?
(See slide 7)
4. Why is GDP considered a good measure of the
“health” of the economy?
www.frbsf.org/education/teacher-resources/datapost FRBSF Economic EducationDATAPOST