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What is GDP and why does it matter for markets?

GDP measures the value of everything a country produces in a year: the economy's main thermometer, watched by markets and central banks.

Gross Domestic Product sums consumption, investment, public spending and net exports. Its quarterly growth, published on a regular schedule, tells whether the economy is accelerating or braking — and steers central banks' rate decisions.

For stocks, the surprise matters, not the level: GDP stronger than expected can even sink markets, if it fuels fear of higher-for-longer rates. "Good news is bad news" during inflation fights.

Concrete example

US GDP is worth about $27–28 trillion: over a quarter of the world economy, which is why American data moves everyone's markets.

How you see it in InsiderFlow

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Frequently asked questions

Does growing GDP mean rising stocks?

Not necessarily: the short-term correlation is weak. Stocks price future profits and rates, not yesterday's GDP.

What is GDP per capita?

GDP divided by population: it measures average prosperity better than total GDP.