GDP (Gross Domestic Product)

The total value of all goods and services produced within a country in a specific period.

What Is GDP?

Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a country's borders in a specific time period. It's the broadest measure of a country's economic health and the single most important macroeconomic indicator.

GDP Growth and Stocks

GDP growth directly impacts corporate earnings. When the economy is expanding (positive GDP growth), companies generally earn more, and stocks tend to rise. When GDP contracts (negative growth for two consecutive quarters), the economy is in recession, and corporate earnings typically fall.

GDP Reports and the Market

The Bureau of Economic Analysis releases GDP data quarterly in three estimates: advance (one month after quarter ends), second estimate, and third estimate. The advance estimate typically moves markets the most. Investors compare actual GDP to expectations — much like earnings — with "beats" and "misses" driving market reactions.