Real GDP Per Capita, How to Calculate It, and Data Since 1947

What Real GDP per Capita Reveals About Your Lifestyle

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Real GDP per capita is a measurement of the total economic output of a country divided by the number of people and adjusted for inflation. It's used to compare the standard of living between countries and over time.

This economic indicator consists of the following three concepts. You must understand these first if you want to comprehend GDP per capita.

The first concept is “gross domestic product.” That measures everything that a country produces in a year.

The components of GDP are personal consumption, business investment, government spending and exports minus imports. The Bureau of Economic Analysis reports it quarterly, updating its estimate each month. 

The second is “real GDP,” which is GDP without the effect of price changes. Inflation makes regular, “nominal” GDP higher, so real GDP is a more accurate measurement when you want to compare an economy over time.

The third is “per capita,” which means “per person.” Real GDP is divided by the population of a country to calculate real GDP per capita. It's the best way to compare economic indicators like GDP for countries with very different population sizes. 

Real GDP per Capita Formula

The formula for real GDP per capita depends on what data you have available. Let's start with the simplest. If you already know real GDP (R), then you divide it by the population (C):

R / C = real GDP per capita.

In the United States, the BEA calculates real GDP using 2012 as the base year. If you don't know real GDP, you can calculate it from nominal GDP (N) if you know the implicit price deflator (D). The deflator is the ratio of what goods and services would cost today if there had been no inflation since the base year.

It's similar to another measure of inflation, the Consumer Price Index. Its components are weighted differently.

Fortunately, the BEA provides the deflator for 2012 in Table 1.1.9. Here's the formula to calculate real GDP per capita (R) if you only know nominal GDP (N) and the deflator (D):

(N / D) / C = real GDP per capita

The best way to calculate real GDP per capita for the United States is to use the real GDP estimates already published by the Bureau of Economic Analysis. Then just divide it by the population. Fortunately, the Federal Reserve Bank of St. Louis already calculated it, as shown below.

Annual U.S. Real GDP per Capita Since 1947 in 2012 Dollars

Year Real GDP per CapitaEvent Affecting GDP
1948$14,316Recession. Adjustment to peace-time.
1950$14,490Korean War.
1953$17,013Eisenhower took office. War ended. Recession.
1954$16,425Recession ended.
1957$17,583Fed raised rates. Recession.
1958$16,793Fed lowered rates. Recession ended. 
1959$17,734Fed raised rates.
1961$17,816JFK took office. Ended recession.
1963$19,257JFK assassinated. LBJ took office. 
1965$20,997Vietnam War. 
1966$22,510Fed raised rates to fight inflation.
1967$22,911Economy slowed. 
1968$23,551Fed raised rates.
1969$24,365Nixon took office. Fed raised rates
1971$24,520Burns chaired Fed. Stagflation. Wage-price controls.
1973$26,718OPEC embargo. Recession. Gold standard ended.
1974$26,643Ford took office. 
1975$25,789Recession ended.
1977$27,706Carter took office.
1978$28,549Fed raised rates.
1979$30,077Volcker chaired Fed. Raised rates.
1981$30,316Reagan took office. Recession. Cut tax rate.
1982$29,365Recession ended. 
1983$29,511Payroll taxes raised.
1986$33,725Reagan cut taxes. 
1987$34,585Greenspan chaired Fed. Inflation. 
1988$35,728Fed raised rates.
1989$36,929Bush 41 took office. S&L Crisis.
1991$36,746Recession ended.
1992$37,304Fed lowered rate.
1993$38,029Clinton took office. NAFTA and EU
1994$38,852Economy grew 4%.
1995$39,729Fed raised rates. 
1998$43,035LTCM crisis.
1999$44,600Glass-Steagall repealed. 
2000$45,944Tech bubble burst. 
2001$46,531Bush 43 took office. Recession.  9/11 attacks.
2002$46,690War on Terror.
2003$47,078Fed lowered rate. Iraq WarJGTRRA
2004$48,663Fed raised rates, hurting interest-only loan holders. 
2007$51,540Dow hit 14,164.43.
2008$51,637Financial crisis.  Fed lowered rates. QE.
2009$49,491Obama took office. ARRA.
2010$49,903ACA passed. Tax cuts
2011$50,485Iraq War ended.
2012$51,446Fiscal cliff.
Strong dollar hurt exports
2015 $53,849
2016$54,287Jobs improved. 
2017$54,945Trump took office. Dollar weakened.
2018$55,964Trump tax cuts.

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