Gary: The good news is the economy is growing. But the bad news, it is not as much growth as many economists had predicted. They say it is because consumers didn’t spend as much as they had hoped.
Consumer spending, which is when you and I spend money, accounts for around 70% of our nation’s economy, or also known as our GDP.
So, I have a pop quiz for you:
What does GDP stand for?
A. Gross Debt Procedure
B. General Dow Jones Product
C. Gradual Debt Process
D. Gross Domestic Product
Take ten seconds.
Time is up! The answer is “D,” GDP stands for gross domestic product.
The gross domestic product is a measure of all the goods and services produced in the U.S. Essentially, what we make and what we buy and sell.
The U.S. has the largest GDP of any country in the world. It takes into account things like exports and imports. We actually import more than we export so that counts as a negative in our GDP. And as I already mentioned, it also includes consumer spending, which makes up the majority of the U.S. GDP, which is why when consumers spend money, the economy actually grows.
Now, even though the GDP is growing, it is not really translating into more jobs for people. And experts say the reason is because while companies are making more goods and services, they are doing it with fewer employees. So, it doesn’t really help unemployment.
- Explain GDP.