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Inside the Vault | Spring 2009

Economic Snapshot

Real GDP Growth: Compounded annual rates of changes

Fourth Quarter 2008

Percent change at an annual rate from the preceding period.

Q3-07 Q4-07 Q1-08 Q2-08
Growth Rate—Real Gross Domestic Product 0.9% 2.8% -0.5% -3.8%
Inflation Rate—Consumer Price Index 4.3% 5.0% 6.7% -9.2%
Civilian Unemployment Rate 4.79% 5.4% 6.1% 6.9%

What is real Gross Domestic Product (GDP)?

Real Gross Domestic Product (GDP) is the market value of all final goods and services produced in an economy during a year adjusted for inflation. GDP is the most comprehensive measure available of U.S. economic activity. Quarterly changes in real (inflation-adjusted) GDP are considered the primary measure of growth in the U.S. economy.

What are the components of GDP?

The components include personal consumption expenditures (consumer spending), gross private domestic investment (business investment in structures, equipment and software, and inventories), government consumption expenditures and gross investment (government spending), and net exports (exports of goods and services less imports of goods and services).

What is the compounded annual rate of change?

The compounded annual rate of change shows what the growth rate would be over an entire year if the same simple percent change continued for four quarters or 12 months

Which agency is responsible for reporting GDP?

Gross Domestic Product is reported by the U.S. Department of Commerce’s Bureau of Economic Analysis. For more information, see www.bea.gov.

Real GDP Growth

Compounded annual rates of changes

debt

SOURCE: Bureau of Labor Statistics Customer Handbook, found at http://www.bea.gov/agency/pdf/BEA_Customer_Guide.pdf

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