GDP is a measure of the market value of all the goods and services produced in a country in a given period. It can be measured in several ways, each giving slightly different information. The most common way of measuring GDP is called the production (or output or value added) approach, which measures the market value of all products at each stage in their creation, from raw materials through final consumption. The resulting value is divided into three components: C (consumption), I (investment) and G (government spending).
Another measurement of GDP is called gross national product, or GNP, which includes non-market activities such as bartering and volunteer labor, along with the production of food for personal use. It is not as accurate as the production-based measurement, but it is still useful in some contexts.
A third measure of GDP is called real GDP, which subtracts inflation to give a truer picture of economic growth. This is calculated using a statistical tool called the price deflator, which adjusts for the pace at which prices are rising.
All three measurements of GDP are based on publicly released data by government agencies, including the BEA, Census Bureau and Department of Labor Statistics. The BEA combines these data to produce its monthly advance estimate of GDP and its subcomponents. When data are unavailable, economists can forecast the missing values using econometric techniques. This article explains the basics of how GDP is estimated and reported, but for more detailed information see our articles on each of the individual subcomponents: