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.

    Learn More: GDP Definition: How the Gross Domestic Product Affects You
  • 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.

    Learn More: US GDP Statistics and How To Use Them
  • 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.

    Learn More: What Is GDP Per Capita?
  • 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.

    Learn More: Gross National Product and Its Differences from Gross Domestic Product
  • 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.

    Learn More: Causes of an Economic Recession
  • 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.

    Learn More: What Is the Business Cycle?
  • 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.

    Learn More: What Is an Economic Recovery?
  • 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.

    Learn More: History of Recessions in the United States

Key Terms

  • Recession

    A recession is a significant decline in economic activity, lasting more than a few months. There's a drop in the following five economic indicators: real gross domestic product, income, employment, manufacturing, and retail sales.

    Learn More
  • Stimulus Check

    A stimulus check is a direct payment made by the government to its citizens. Unlike tax credits, which come as deductions from taxes owed during tax filing, stimulus checks are designed to give immediate relief to taxpayers and encourage stability and spending during an economic downturn.

    Learn More
  • Real GDP

    Real gross domestic product (GDP) is a measurement of economic output that accounts for the effects of inflation or deflation. It provides a more realistic assessment of growth than nominal GDP. Without real GDP, it could seem like a country is producing more when it's only that prices have gone up.

    Learn More
  • Economic Growth

    Economic growth is an increase in the production of goods and services over a specific period. To be most accurate, the measurement must remove the effects of inflation.

    Learn More
  • Nominal Gross Domestic Product

    Nominal gross domestic product (GDP) is a measurement of economic output that doesn't adjust for inflation. GDP measures everything produced by all the people and companies within a country's borders. When you hear reports of a country’s GDP that don’t specify the type, it's likely to be nominal GDP.

    Learn More
  • Economic Contraction

    An economic contraction is a decline in national output as measured by gross domestic product (GDP). That includes a drop in real personal income, industrial production, and retail sales. It increases unemployment rates.

    Learn More
  • Economic Depression

    An economic depression is a severe downturn that lasts several years. Fortunately, the world has only experienced one economic depression. That was the Great Depression which lasted for 10 years. The decline in the gross domestic product (GDP) growth rate was bigger than anything experienced since then.

    Learn More
  • Boom and Bust Cycle

    The boom and bust cycle is the alternating phases of economic growth and decline. It's another way to describe the business cycle or economic cycle.

    Learn More
  • Double Dip Recession

    A double-dip recession occurs when an economy enters recovery from a recession but then is derailed and slides back into a recession. While it's rare, it can happen. There have only been two of them since the Great Depression.

    Learn More
  • K-Shaped Recovery

    A K-shaped recovery is when different communities experience different rates of recovery after a recession. The term refers to the shape this type of recovery makes when plotted on a line graph. The portion of the population that recovers quickly is represented by the upper part of the K, while the lower part represents those groups that recover more slowly.

    Learn More
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"
5 U.S. GDP Statistics You Need to Know
how banking works: Banks are insured by the Federal Deposit Insurance Corporation (FDIC), making them a safe place to deposit money. Savers are paid a small percent of deposited amount based on an interest rate. The Federal Reserve allows banks to lend up to an entire amount of its deposits. Profit is made by charging higher interest rates on their loans than they pay for deposits
Banking
Illustration of components of an economy: currency, food, electricity, water. Text says "U.S. economy collapse: What will happen, how to prepare."
Can the US Economy Collapse?
Worker fitting headliner in car in car factory - stock photo
Trends in America's Manufacturing Sector
The image shows infographic bubbles that contain text. The text reads: The Great Recession By the Numbers; Housing Prices fell 31.8 percent; Unemployment was still above 9 percent in 2010; 30 billion federal guarantee for deal between Bear Stearns and JP Morgan Chase; $182 billion federal bailout for AIG US treasury later sold the shares for $22.7 billion profit; $144.5 billion moved from money markets to treasury bonds; Fannie Mae and Freddie Mac guarantee 90 percent of all mortgages; Treasury department spent $439.6 billion buying bank and car stocks; By 2010 banks paid back $442.6 billion.
2008 Financial Crisis Causes, Costs, and Could It Happen Again?
An illustration shows how GDP per Capita is calculated.
GDP Per Capita
The Business Cycle's peaks and troughs illustrated with mountains and valleys.
Business Cycle
imports
Why Souvenirs Are Imports
President Trump Holds First Campaign Rally Since Coronavirus Diagnosis
What You Need to Know About President Trump's Impact on the National Debt
Image shows a timeline between 2007 and 2009 surrounded by images of a house, an uppercase “O”, a bull, a falling chart line, a person, and the United States. Text reads: Stock Market Crash of 2008. Housing slowdown, Lehman Brothers declared bankruptcy, jobs lost, nation in recession, Obama’s economic stimulus plan, and stock market finally recovered.
When and Why Did the Stock Market Crash in 2008?
What Makes Real GDP So Incredibly Real?
This illustration describes major events of the Great Depression including "Black Thursday (Oct. 24, 1929) kicked off stock market crash of 1929," "Smoot-Hawley Act of 1930 raised import tariffs and arguably worsened the Great Depression," "June 1930: The Dust Bowl began," "1933: FDR took office," "1933: The New Deeal launched programs like the "Social Security Act to reverse the downward economic spiral," and "1938: Economy started to grow again and the Great Depression was over."
Great Depression Timeline
Tea Party Advocate Ted Cruz
The Tea Party Movement's Effect on the Republican Party
Protestors at Bear Stearns
How a Bank That Survived the Depression Started the Great Recession
Businesspeople Exiting Wall Street Station
The Great Recession of 2008: What Happened, and When?
Rep. Barney Frank and Sen. Christopher Dodd at news conference
Dodd-Frank Wall Street Reform Act
Group of call-center staff working
What Is Outsourcing and How Does It Affect Jobs in the U.S.?
Illustration of the three types of unemployment: Structural, Frictional, and Cyclical, all surrounding a man dressed in a suit, holding a briefcase while looking worried as he stands next to a "Help Wanted" Sign
Types of Unemployment
what is the GDP growth rate? Indicates how quickly the economy is growing or shrinking. Has four components: personal consumption, business investment, government spending, and net trade. Shows where the economy is within the business cycle. Real GDP adjusts for inflation
How To Calculate the GDP Growth Rate
U.S. Economic Crisis
Protect Yourself from the Next U.S. Economic Crisis
Airplane mechanics looking at paperwork and working on a helicopter
What Durable Goods Orders Tell You About the Future
In the oval office, Former President George Bush., President-elect Barack Obama, President George W. Bush, former Presidents Bill Clinton and Jimmy Carter, Washington, D.C., January 7, 2009.
How Every President Since Hoover Has Affected the U.S. Economy
Hand holding up a $10 bill in front of the U.S. Treasury
What Is the U.S. Department of the Treasury?
What Does Gross National Product Say About a Country?
Man worried about finances
Why Recessions Happen in the U.S.
People shopping
When to Use Nominal GDP
Bernanke Angry Over AIG Bailout
This Bailout Made Bernanke Angrier than Anything Else in the Recession
Charles Keating
How Congress Created the Greatest Bank Collapse Since the Depression
retail sales
U.S. Retail Sales Report for April 2022
Depression soup line
What Makes a Depression So Much Worse Than a Recession?
A demonstrator holds up a sign behind U.S. Treasury Secretary Henry Paulson (L) and Federal Reserve Board Chairman Ben Bernanke (R) during a hearing before the Senate Banking, Housing and Urban Affairs Committee
What Is Too Big to Fail?
couple at bank
How Your Bank Really Works
income inequality
How to protect yourself from the next boom and bust cycle.
Henry Paulson
How Hank Paulson Saved You from the Financial Crisis
G-20
What Does the G-20 Do?
How Retail Sales Help You Understand the Economy
Fed Chair Janet Yellen
Who Was the Only Female Federal Reserve Chair?
Biden's Treasury Secretary Nominee, Janet Yellen
What Did Hamilton and Other Treasury Secretaries Really Do?
Paul Volcker next to American flags
Paul Volcker and How He Got a Shock and a Rule Named After Him
economic depression
What Causes an Economic Depression, and Why One Won't Happen Again
Emergency room professionals transporting patient on a gurney
See for Yourself wherther Obamacare Increased Healthcare Costs
Business people closing a deal
How Bank Repos Affect Interest Rates
Farmers
Why Drought Is the Biggest Climate Change Worry for Most Americans
Concerned woman reading papers in kitchen at home
2008 Financial Crisis Timeline
Speaker of the Housr Nancy Pelosi (D-CA), Senate Minority Leader Chuck Schumer (D-NY) and Senate Majority Leader Mitch McConnell (R-KY) attend a reception in the White House January 23, 2017 in Washington, DC.
Congress' Powerful Impact on the Economy
A worried senior chef in the kitchen counter
12 Causes of Economic Recession
Migrants exit a Border Patrol bus and prepare to be received by the Val Verde Humanitarian Coalition after crossing the Rio Grande on September 22, 2021 in Del Rio, Texas. Thousands of immigrants, mostly from Haiti, seeking asylum have crossed the Rio Grande into the United States. Families are living in makeshift tents under the international bridge while waiting to be processed into the system. U.S. immigration authorities have been deporting planeloads of migrants directly to Haiti while others have crossed the Rio Grande back into Mexico.
How Immigration Impacts the Economy
Frank and Dodd
What Did Barney Frank Do?
Ben Bernanke
The Great Depression Expert Who Prevented the Second Great Depression
President Bush Dealing With the 2001 Recession.
The 2001 Recession
Trump speaking to auto workers
Did Donald Trump Bring Back American Jobs?
Tim Geithner
Did TARP Help You or the Banks?
America's manufacturing jobs
Manufacturing Jobs: Definition, Types, Changes
Woman shopping
The Retail Industry and Its Impact on the Economy
U.S. Federal Reserve Chairman Ben Bernanke
Here's How They Missed the Early Clues of the Financial Crisis
A person picks up a found penny from the ground.
Why America Should Get Rid of the Penny
President George W. Bush
Did the Bush Economic Stimulus Package Work?
An illustration shows how a recession affects parts of the economy.
Recession
A view of the London Skyline
What Is LIBOR and How Does It Affect You?
A FEMA representative surveys Hurricane Sandy damage in the Rockaways, January 17, 2013 in the Queens borough of New York
What Has Climate Change Cost Us? What's Being Done?