Gross Domestic Product

Overview
Visualizations (2)
Data

Description:

Gross domestic product (GDP) is the value added in production by labor and capital. It is the most comprehensive measure of economic activity.

GDP for the nation, states and metro areas are produced in both current dollars and inflation-adjusted (real) dollars. The inflation adjustment is unique to each geographic area. GDP is released quarterly for the nation but only annual data are available by state and metropolitan area. Though estimates of current dollar GDP by state go back to 1963, inflation-adjusted data are available only back to 1987. Gross domestic product data are available by metropolitan area only since 2001; county data are not available.

The inflation-adjusted percent change in GDP is presented on Arizona Indicators. The percent changes begin in 1988 for the United States and Arizona and in 2002 for the metropolitan areas.

Data Source:

U. S. Department of Commerce, Bureau of Economic Analysis:http://www.bea.gov/regional/index.htm. Estimates by state are released in June, consisting of advanced (preliminary) estimates for the preceding calendar year by sector, as well as revised estimates for the prior year by sector and subsector. Metro area estimates are released in September, consisting of very preliminary estimates for the preceding calendar year by sector, as well as revised estimates for the prior year by sector and subsector.

Data Quality Comments:

The GDP estimates for the latest year are labeled as “advanced” or “accelerated”—an abbreviated set of mostly preliminary data and a simplified methodology are used to generate these estimates. Even after the estimates are revised, some of the inputs to the calculation of GDP by state and especially by metropolitan area are estimated.

Two estimates of GDP by state exist for 1997: one based on the Standard Industrial Classification (SIC) and the other by the new North American Industry Classification System (NAICS). The 1997 estimate by NAICS should not be compared to the 1996 estimate by SIC, nor should the 1998 estimate by NAICS be compared to the 1997 estimate by SIC.

Gross Domestic Product in Arizona and the United States, Inflation-Adjusted Percent Change

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Visualization Notes:

A healthy economy exists when inflation-adjusted gains in GDP are at least 2-to-3 percent per year. During the 1991-to-2001 economic cycle, the annual average inflation-adjusted growth rate was 7.5 percent in Arizona and 3.7 percent nationally. However, during the 2001-to-2009 economic cycle, the annual average inflation-adjusted growth rate was only 2.9 percent in Arizona and 1.6 percent nationally.

Within an economic cycle, the annual change in GDP is highly variable, exceeding the target during economic expansions and falling short during recessions. During expansions, Arizona’s GDP growth is much higher than the target and the national average due to the state’s much more rapid population growth. However, during recessions—as in 2008 and 2009—Arizona’s economic performance is inferior to the national average. Arizona underperformed the nation again in 2010, as the economy began to recover from the recession. In Arizona, the percent change in GDP during economic expansions has dropped over time, a natural result of the considerable increase in the size of the Arizona economy.

Gross Domestic Product, Inflation-Adjusted Percent Change

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Visualization Notes:

During expansions, inflation-adjusted GDP growth in Arizona’s metropolitan areas generally is much higher than the target of 2-to-3 percent and also is higher than the U.S. metro average due to the above-average population growth in Arizona. Between the end of the prior recession in 2001 and the peak of the economic cycle in 2007, the annual average inflation-adjusted growth rate ranged between 4.7 and 5.3 percent across five of the state’s metropolitan areas — Tucson was lower at 3.3 percent. The U.S. metro average was 2.5 percent. Variations in population growth account for some of the differences across metro areas in aggregate economic growth.

The percent change in inflation-adjusted GDP was negative in 2008 and 2009 in each of the geographic areas; the period of decline began in 2007 and/or lasted to 2010 in some of Arizona’s metro areas. The U.S. metro average fell 2.8 percent over the two years, with nearly all this decline made up in 2010. In contrast, the recessionary drop was much deeper in each of Arizona’s metro areas, ranging from 6 percent in Yuma to 17 percent in Lake Havasu City. Hardly any of the losses had begun to be offset in 2010.