GDP Growth & Recessions

Gross domestic product (GDP) is a key economic indicator. The U.S. and world economy use it to measure growth and recessions. Here’s what you need to know about GDP, economic growth, and recessions in the U.S. 

Frequently Asked Questions

  • What is gross domestic product (GDP)?

    Gross domestic product (GDP) measures the value of all final goods and services produced in a country and is a popular indicator of an economy’s health.

  • What is the gross domestic product (GDP) of the United States?

    The gross domestic product (GDP) of the U.S. is worth trillions of dollars. It fluctuates quarter to quarter and year to year. For example, in the first quarter of 2020, nominal GDP was $21.5 trillion, and in the first quarter of 2021, it was $22 trillion.

  • How do you calculate gross domestic product (GDP) per capita?

    GDP per capita is calculated by dividing a country’s GDP by its population at that time. In 2020, U.S. GDP per capita was $63,285, according to the Federal Reserve Bank of St. Louis.

  • How does gross domestic product (GDP) differ from gross national product (GNP)?

    Gross domestic product (GDP) is the value of all final goods and services produced in a country. Gross national product (GNP) is the value of all goods and services produced by only residents of the country, regardless of where they’re located. GNP was used as the primary measure of production in the U.S. until 1991, when GDP took its place.

  • What causes a recession?

    Recessions are often caused by an overheated economy. Inflation may rise, unemployment rates may drop below natural levels, and demand may outweigh supply. Whenever there is an economic expansion it is surely to be followed by a recession. This is a natural part of the business cycle. Other factors can also come into play, such as a pandemic, as seen in 2020.

  • How long do recessions last?

    Recessions can last for months or years, depending on how drastic the economic downturn is. For example, the 2020 recession technically only lasted for two months, the shortest on record, while the Great Recession between 2007 and 2009 lasted 18 months.

  • Which agency determines when recessions begin and end?

    The National Bureau of Economic Research (NBER) determines exactly when a recession begins and when it ends in the U.S. The NBER Business Cycle Dating Committee identifies the peaks and troughs that mark the start and end of recessions.

  • How many recessions has the U.S. had?

    According to the National Bureau of Economic Research (NBER) Business Cycle Dating Committee there have been over 30 recessions in the U.S. since 1857. In the 21st century alone, there have been three recessions in the U.S.

Key Terms

Title reads: "Five ways to measure the U.S. economy"Image shows 5 icons with corresponding captions. The icons are a dollar bill and a few coins, a percentage sign over an zig-zagging, increasing arrow, a small house with a heart in it, a coin with a red arrow pointing downward, and a person with a ball and chain attached at the ankle and the ball has a dollar sign on it. The following captions are in the order of the icons just listed and correspond to them: "U.S. Nominal GDP: Measures economic output of the entire country. GDP Growth Rate: Measures year-over-year percent increase of economic output. GDP Per Capita: Estimates standard of living. Real GDP: Nominal GDP without inflation. Debt to GDP Ration: Determines whether annual income can pay off debt"
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