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Measuring the Economy A Primer on GDP and the National Income and Product Accounts

How fast is the economy growing? Is it speeding up or slowing down? How does the trade deficit affect economic growth? What’s happening to the pattern of spending on goods and services in the economy? To answer these types of questions about the economy, economists and policymakers turn to the national income and product accounts (NIPAs) produced by the Bureau of Economic Analysis (BEA). The NIPAs are a set of economic accounts that provide information on the value and composition of output produced in the United States during a given period and on the types and uses of the income generated by that production. Featured in the NIPAs is gross domestic product (GDP), which measures the value of the goods and services produced by the U.S. economy in a given time period. GDP is one of the most comprehensive and closely watched economic statistics: It is used by the White House and Congress to prepare the Federal budget, by the Federal Reserve to formulate monetary policy, by Wall Street as an indicator of economic activity, and by the business community to prepare forecasts of economic performance that provide the basis for production, investment, and employment planning.

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