Glossary · Economy
GDP
GDP (gross domestic product) is the value of everything a country produces in a year: all the goods and services sold to their final buyers, each counted once.
Also called: gross domestic product, economic output, size of the economy
In current dollars, Q3 2026.
After inflation, to Q3 2026.
In 2025, current dollars.
In plain words
Add up the price of every haircut, car, phone, meal, new house and doctor’s visit an economy produces in a year, counting each thing only once, and you get its gross domestic product. It is the most used measure of how big an economy is and whether it is growing.
Only final things count. The flour a bakery buys is already inside the price of the bread, so adding both would count the flour twice. Most of US GDP is what households spend; then come business investment and government purchases; what the country sells abroad is added and what it buys from abroad is taken away.
The US economy produces at a yearly rate of $33T (Q3 2026), about $90,252 for every person who lives there.
Example
A tiny island economy
An island has a farmer, a baker and a café. In one year:
- The farmer grows wheat and sells it to the baker for $100.
- The baker turns it into bread and sells it to the café for $250.
- The café makes sandwiches and sells them to customers for $600.
- GDP counts only the final sale: $600. Not $100 + $250 + $600 = $950, which would count the wheat three times.
The same $600 is the sum of what each one added: $100 + $150 + $350. If next year the island makes the same sandwiches but prices are 3% higher, GDP in current dollars is $618 while real GDP stays at $600.
One level deeper
GDP can rise just because prices rise. Real GDP takes inflation out by valuing every year’s output at the same prices; that is the number behind “the economy grew 2%”. Since 1947, US GDP in current dollars grew 136 times, but real GDP only 11.3 times: most of the rise was inflation.
There are three ways to count it, and in theory they give the same total: add up spending (GDP = C + I + G + exports − imports), add up incomes (wages, profits, rents, taxes on production), or add up the value each industry adds. Statisticians reconcile the three.
To compare countries, GDP is divided by population (GDP per capita) and often converted at purchasing-power parity, because a dollar buys more in some countries than in others.
US GDP since 1947: current dollars and real
On a log scale, equal steps mean equal percentage growth. The gap between the lines is inflation: real GDP values every year’s output at 2017 prices, so the lines cross in 2017.
The numbers behind the chart
| Date | In current dollars | Real, in 2017 dollars |
|---|---|---|
| Q1 1947 | $243B | $2.18T |
| Q4 1950 | $320B | $2.56T |
| Q4 1960 | $540B | $3.47T |
| Q4 1970 | $1.09T | $5.3T |
| Q4 1980 | $2.99T | $7.32T |
| Q4 1990 | $6.0T | $10T |
| Q4 2000 | $10.4T | $14.2T |
| Q4 2010 | $15.3T | $17T |
| Q4 2020 | $22.1T | $20.8T |
| Q4 2022 | $26.8T | $22.3T |
| Q4 2023 | $28.5T | $23T |
| Q4 2024 | $29.9T | $23.6T |
| Q4 2025 | $31.5T | $24.1T |
| Q3 2026 | $33T | $24.6T |
Why it matters
GDP growth is the economy’s pulse: falling GDP is the first sign of a recession, and governments, central banks and companies plan around it.
Debts, deficits and tax revenue are judged against it: a debt of 100% of GDP equals a whole year of the economy’s output.
Over time it shapes living standards: real growth of 2% a year doubles output in about 35 years.
A common mistake
Myth: GDP measures how well-off people are.
In fact: It measures output, not well-being. It leaves out unpaid work at home, leisure and the state of the environment, and says nothing about how income is shared. Rebuilding after a disaster even adds to GDP. It is a good gauge of activity, not of happiness.
Questions people ask
What is the difference between GDP and GNP?
GDP counts what is produced inside a country, whoever owns the factory. GNP (or GNI) counts what a country’s residents earn, wherever they produce it. For most large economies the two are close.
How is GDP growth reported?
In the US, each quarter’s change is reported at an annual rate: the quarter’s growth compounded over four quarters. In Q3 2026 real GDP changed by +3.4% at an annual rate; over the last four quarters it changed by +2.1%.
Which country has the largest GDP?
In 2025, measured in US dollars, the largest economy was United States ($30.8T), followed by China. Measured at purchasing-power parity, the largest was China. Our largest economies article follows the ranking year by year.
Read more on BigCapital
About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- GDP at purchasing power parity: International Monetary Fund, World Economic Outlook database (October 2026), https://www.imf.org/external/datamapper/PPPGDP@WEO; via the IMF DataMapper API, indicator PPPGDP (GDP, current prices, Purchasing power parity; billions of international dollars).
- GDP, current US dollars: The World Bank: World Development Indicators: GDP (current US$) (NY.GDP.MKTP.CD). Original source: Country official statistics, National Statistical Organizations and/or Central Banks; National Accounts data files, Organisation for Economic Co-operation and Development (OECD); Staff estimates, World Bank (WB).
- Gross domestic product (current dollars): U.S. Bureau of Economic Analysis, National Income and Product Accounts, Table 1.1.5, series GDP; retrieved from FRED, Federal Reserve Bank of St. Louis.
- US population (midperiod, BEA): U.S. Bureau of Economic Analysis, National Income and Product Accounts, Table 2.1, series B230RC0A052NBEA; retrieved from FRED, Federal Reserve Bank of St. Louis.
- Real gross domestic product: U.S. Bureau of Economic Analysis, National Income and Product Accounts, series GDPC1; retrieved from FRED, Federal Reserve Bank of St. Louis.
- This page explains a term. It is not investment advice.