Real GDP growth by quarter in the U.S. 2011-2020

Owing to the economic effects of the coronavirus (COVID-19) pandemic, real U.S. GDP increased by 33.4 percent in the third quarter of 2020. This compares to an increase of 2.4 percent in the fourth quarter of 2019, before COVID-19 started to spread around the world.

How GDP is calculated

GDP, or gross domestic product, is effectively a count of the total goods and services produced in a country over a certain period of time. It is calculated by first adding together a country’s total consumer spending, government spending, investments and exports; and then deducting the country’s imports. The values in this statistic are the change in ‘constant price’ or ‘real’ GDP, which means this basic calculation is also adjusted to factor in the regular price changes measured by the U.S. inflation rate. Because of this adjustment, U.S. real annual GDP will differ from the U.S. 'nominal' annual GDP for all years except the baseline from which inflation is calculated.

What is annualized GDP?

The important thing to note about the growth rates in this statistic is that the values are annualized, meaning the U.S. economy has not actually contracted or grown by the percentage shown. For example, the fall of 32.9 percent in the second quarter of 2020 did mean GDP is suddenly one third less than a year before. What it means is that, if the decline seen during that quarter continued at the same rate for a full year, then GDP would decline by this amount. Annualized values can therefore exaggerate the effect of short-term economic shocks, as they only look at economic output during a limited period. This effect can be seen by comparing annualized quarterly growth rates with the annual GDP growth rates for each calendar year.