Today, real growth in the U.S. economy was announced to be 2.4%, after inflation. This was a drop from the previous quarter growth of 3.1%. The economy still has momentum, just not as much. If you own a business, this growth rate of 2.4% doesn't seem like much, so how can you grow your business more than the economy? Let's drill down into GDP and expose where faster growth comes from.
The Gross Domestic Product is calculated by the Bureau of Economic Analysis, and is the total dollar amount of goods and services produced, but the final GDP number is the sum of 5 components: consumer spending, investment, government and exports. Imports are subtracted from GDP because they are included in the consumer spending component.
The economy is recovering from the 2020 Covid drop, as shown in the chart of GDP from 2005, but not all industries are contributing. If you own a business and are looking to grow your business more than the 2.4% economy, all you need to do is steer your business to benefit from industries that are leading in growth:
and, as shown in the chart, stay away from businesses that are declining:
In summary, the GDP is announced but revised 3 times. It is also calculated two ways, one, as real GDP, which subtracts the inflation rate, and, two, as nominal GDP which is the total number. GDP is calculated every quarter, but the number is an annual rate so be aware of what calculation method you are looking at.
The bottom line is that your business should at least be growing by the GDP number, but grow your business faster by finding a way to do business with those industries leading the charge.
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