About this indicator
About
Real gross domestic product is the inflation-adjusted dollar value of all final goods and services produced in the United States. The Bureau of Economic Analysis publishes three estimates of each quarter: an advance release about one month after the quarter ends, a second estimate one month later, and a third estimate one month after that. Annual revisions in July rewrite the prior five years against more complete source data.
Why it matters
Real GDP is the headline measure of how the economy is performing. The National Bureau of Economic Research Business Cycle Dating Committee uses it (alongside other measures) to date recessions. The Federal Reserve's reaction function reads it through the output gap, the difference between actual real GDP and the Congressional Budget Office's potential GDP estimate. A surprise in either direction reprices the path of rates and the equity risk premium.
How it's computed
BEA computes real GDP from the expenditure side: consumer spending, gross private investment, government consumption and investment, and net exports. Each component is deflated by its own price index using a chain-weighted Fisher index, base year currently 2017. Quarterly figures are reported at seasonally adjusted annual rates (SAAR), meaning a 2% quarterly print is what would happen annualized, not the actual quarter-over-quarter change.
Pitfalls
The advance estimate is built on partial data — international trade and inventories aren't fully known yet. Revisions between the advance and third estimates typically run 0.5 to 1.0 percentage points. The annualization convention is also a frequent source of confusion: a 'real GDP growth of 2.5%' headline means an annualized rate, not what the economy actually grew in three months.