What Is GDP?
GDP, or gross domestic product, is the total value of all goods and services a country produces in a period. It is the main scoreboard for the size and health of an economy.
What goes into GDP
Mostly what people spend, what businesses invest, what the government spends, and exports minus imports. In the US, consumer spending is the biggest part by far.
GDP growth
What matters most is how fast GDP grows, adjusted for inflation. Growth of 2% to 3% a year is healthy for a big economy like the US. Two quarters of shrinking GDP is a common sign of a recession.
GDP and the stock market
Over the long run, a growing economy supports growing company profits. But in the short run, stocks and GDP often move differently. Markets look ahead, while GDP reports look back.