What Does an Increasing GDP Mean?

The gross domestic product is the measurement of all the goods and services produced by an economy such as a national or state economy. The GDP for a country is the economic output measured over one year. Gross domestic product is considered to be the broadest measurement of economic activity. In the U.S., the Bureau of Economic Analysis (BEA) measures the U.S. GDP and reports quarterly on the size of the economy.

An increasing GDP means the economy is growing. Businesses are producing and selling more products or services. An economy needs to grow to provide a stable economic system and keep up with population growth. When the GDP declines, the economy is described as being in a recession. During a recession, fewer goods and services are being sold, business profits decline, government tax collections fall and unemployment rises.

The Bureau of Economic Analysis reports changes in the U.S. GDP quarterly. The quarterly GDP change is the change in the annual rate of GDP growth for the previous quarter. If the BEA reports a positive GDP number, the economy grew over the previous quarter. The rate of GDP increase gives an indication how fast the economy is growing. When the quarterly GDP results are released, the BEA can also make revisions to the growth rates for previous quarters.

From 1980 through 2010, the U.S. GDP grew from $2.788 trillion to $14.660 trillion, according to the BEA. During that period the highest annual growth of the economy was 7.2 percent in 1984. During those years, only four years -- 1980, 1982, 1991, 2009 -- experienced negative GDP growth. The year 2008 had zero GDP growth. For the decade 2001 to 2010, annual GDP changes ranged from minus 2.6 percent up to 3.6 percent. It was the only decade since records started in 1930 without at least several years of 4 percent or better growth.