A quick GDP refresher

Marketplace

American Public Media

Business, News

4.6 • 8K Ratings

🗓️ 25 September 2025

⏱️ 26 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Turns out the economy grew faster than we initially thought in the second quarter of 2025. Between a slowing job market and uncertain trade policies, an upward revision to GDP came as a bit of a surprise. In this episode, a quick lesson on how GDP is calculated and why consumer spending drove the acceleration. Plus: Hiring-related text scams get more believable, the housing market stays stuck, and companies ramp up spending on durable goods.

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Transcript

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0:00.0	The solution to today's economic math problem is 3.8. Please show your work.
0:08.5	From American public media, this is Marketplace.
0:18.1	In Los Angeles, I'm Colin Rizdahl. It is Thursday, today 25 September. Good as always to have you along, everybody.
0:28.5	Believe me when I tell you that math is not, repeat, not my strong suit. But being in this line of work means sometimes you got to, which I offer as a
0:40.0	preface to today's lesson from the Commerce Department this morning by way of the Bureau of
0:44.8	Economic Analysis came a revision of gross domestic product for the second quarter that is
0:49.9	April through June. And honestly, it was a bit of an upside surprise. The economy grew at an
0:55.7	annualized rate of 3.8% in Q2. That's up half a percentage point from the earlier guest last month.
1:03.2	We will get to the why of how that happened in due course. But first, we are going to look at the
1:08.1	what of how we measure this economy.
1:17.7	Ethan Struby at Carlton College and Nicole Struve at Wells Fargo have today's seminar on beginning macroeconomics.
1:26.7	So GDP is the market value of all final goods and services produced within the United States in a given quarter.
1:31.9	I'm being very specific because all of the little words in that definition are actually really important,
1:33.1	and there will be a quiz later.
1:36.6	Start taking notes, gang. I'm here to help you.
1:41.6	GDP is broken down into one relatively simple formula.
1:45.1	The C plus I plus G plus NX.
1:53.1	We have spending by consumers, C, spending by businesses, investment, I, spending by governments, G.
1:54.7	And then you have trade, which we evaluate as a balance.
1:59.1	So you take exports minus imports to get an X, net exports.
2:03.9	The caveat here, and it's a biggie, is that not all elements of that equation are created
2:09.8	equals. Consumption, consumer spending, that's that C in the equation, makes up give or take of
	...

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