Last week, the Commerce Department reported that U.S. Gross Domestic Product (GDP) increased by a seasonally and inflation adjusted annualized rate of 3.3%, more than double the 1.5% expected by most economist. Positive economic news is a good start to the new year but it’s important for businesses to understand what the headlines mean.
GDP represents the total economic output of an economy within a specified account period. The Bureau of Economic Analysis (BEA) uses four key areas of measure to calculate U.S. GDP.
· Personal consumption expenditures (Consumer Spending)
· Business Investment
· Government Expenditures
· Net Exports
Consumer spending represents 70% of the overall GDP number.
According to the BEA quantifying the GDP numbers helps us to answer questions like:
· How fast is the U.S. Economy Growing?
· How does our State’s Economy compare to other State’s economies?
· Which industries are growing, and which industries are slowing?
At the state level, numbers for the third quarter of 2023 put Missouri in the middle quintile, ahead of neighboring states Arkansas and Iowa but trailing others in the region. While the fourth quarter numbers are certainly a good indicator of positive economic strength overall, we have some opportunities here in our region to continue working towards growth.
