GDP – Real Economic Growth

Economic output, as measured by real gross domestic product, reflects the amount of goods and services produced by labor and capital in an economy.  The change from period to period, excluding the effects of inflation, measures the real economic growth occurring within the economy.  Economic growth has been relatively consistent over many decades in the U.S., as a result of fairly constant population growth and generally consistent productivity gains (at least in the longer-run).  During the 1930s, economic growth stalled; it then subsequently recovered its long-term average growth rate through an above-average decade in the 1940s. Real GDP during the past three calendar decades was significantly below average. It’s beginning to appear the economy downshifted to a new level of slower growth. This could have significant implications for the stock market over the next few decades.