|Growth Rate—Real Gross Domestic Product||4.3%||4.9%||3.3%||3.5|
|Inflation Rate—Consumer Price Index||3.3%||2.4%||1.1%||2.0%|
|Civilian Unemployment Rate||5.3%||5.3%||4.9%||4.9%|
SOURCE: National Economic Trends, Federal Reserve Bank of St. Louis, October 1997, p.3
Real Gross Domestic Product measures the value, adjusted for inflation, of a country's output of final market goods and services during a year. In contrast, Nominal GDP is expressed as a dollar value not adjusted for inflation. "Final" goods and services ensures that an item is counted only once For example, tires that are on an automobile produced in 1997 are included in the dollar value of the car. If the tires were counted first as tired production and then as part of the car's value, GDP would be overstated.
Economists measure real GDP as a money amount in base-year dollars. They choose some past year, such as 1992, to calculate the value of the economy's current output. Real GDP in base-year dollars show what the money value of the current output would be if prices had not changed since that base year, and enables us to compare real output over time.