What Is GDP (Gross Domestic Product)?
Gross Domestic Product — the total value of all goods and services produced in a country.
The Full Definition
Gross Domestic Product (GDP) measures the total monetary value of all goods and services produced within a country over a given period, and it's the most widely cited gauge of overall economic health. GDP growth tends to support corporate earnings and stock prices, while two consecutive quarters of GDP decline is the commonly cited (though not official) shorthand for a recession. Investors watch GDP reports alongside other indicators because the stock market often moves on expectations about future GDP trends well before the data itself is released.
Real-World Example
When GDP grows 3% annualized, it signals a generally expanding economy — more consumer spending, more business investment — conditions that historically tend to support corporate revenue and earnings growth.