1. Expected U.S. GDP Growth Rate
Victoria Rock
AIU Online
BUSN300-1202A-15

2. Abstract
Being a newly appointed President for the local Chamber of Commerce, a presentation on the
Expected U.S. GDP growth will be examined and explained.

3. Introduction
In this paper the GDP growth rate of the U.S. will be examined through trends, forcasts, and
statistics. Also how the GDP is determined and interpreted.

4. Expected U.S. GDP Growth Rate
The value of the U.S. GDP has continued to increase in value and the year with the highest
value recorded was in 2010 at $14,526.5 billion dollars. (National Income and Product Accounts
Table, 2012). However, the rate of growth in GDP has varied. There are periods when the GDP
increases at an increased rate while others have a negative growth.
A graph of GDP against years
16,000.00
GDP (Billions of dollars)
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Years Series1
As you can tell in the next chart in our analyses we reviewed the annual GDP growth from
1991 to 2010, and can see alternate cycles of increase and decrease with the highest growth rate
recorded in 2000. The economy registered a boom between 1998 and 2000 which shows an
increase of 6.39% in 2000. In 2001 GDP growth was recorded at 3.36%, 2002 at 3.46%, 2003 at
4.70%, and 2004 at 6.38%, with the highest growth occurring in 2005 at 6.49%. From 2005 to

5. 2009 the economy experienced a recession and the GDP decreased at a diminishing rate. The
Annual growth registered amounted to 5.97% in 2006, 4.87% in 2007, 1.87% in 2008, and the
lowest in 2009 at -2.47%. Decline in GDP can be attributed to reduced personal consumption
expenditures which is the main component contributing to the GDP. However in 2010 the
economy started to improve and growth was recorded at 4.21%. (Economic Expansion (GDP),
2011)
Annual GDP growth
8.00%
6.00%
%age change in GDP
4.00%
2.00%
0.00%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
-2.00%
-4.00%
Years
The Economic Times stated that the Federal Reserve cut its forecasts for the US economic
growth from 3.1 to 3.3 percent down to 2.7 to 2.9 percent and sees 2012 growth in a 3.3 to 3.7
percent range. The slowed growth was being attributed to increasing inflation due to factors
pushing up the price of commodities. The slow pace is also attributed to higher prices of food
and energy which will lead to a reduced consumer purchasing power. (Federal Reserve cuts US
GDP forecast; no hint of more support, 2011)
Global Finance has provided various statistics in relation to GDP which includes information
that the GDP per capita in the US amounted to $48,666 based on 2010 figures. The service

6. sector is the main contributor to the GDP accounting for 76.9%, manufacturing at 21.9%, and
agriculture sector at 1.2% and is based on GDP values for 2009. (DATA ON GDP AND
ECONOMIC INFORMATION, 2011)
Real GDP for the past ten years
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Real 4.1% 1.1% 1.8% 2.5% 3.6% 3.1% 2.7% 1.95 0% -2.6% 2.8%
GDP
Note: Reprinted from the United States Country Report by Global Finance, 2011
How GDP is determined
There are two ways in which the GDP can be calculated; the income approach which is
calculated by adding up total compensation to employees, gross profits for firms, and taxes less
any subsidies.
GDP = compensation of employees + gross profit for firms + taxes – subsidies
The expenditure method is the more common approach and is calculated by adding total
consumption, investment, government spending and net exports less imports.
GDP = personal consumption + government spending + investments + exports – imports

7. Interpreting GDP
A positive Real GDP number reflects a growing economy while a negative GDP reflects a
declining economy like what we saw in 2009. When you have two consecutive quarters of GDP
decline it generally is associated with a recession. (Economic Expansion (GDP), 2011)

8. Reference
DATA ON GDP AND ECONOMIC INFORMATION. (2011). Retrieved from Global Finance:
http://www.gfmag.com/gdp-data-country-reports/151-the-united-states-gdp-country-
report.html#axzz1s9ytNMsh
Economic Expansion (GDP). (2011, December). Retrieved from Russell Investments:
http://www.russell.com/helping-
advisors/Markets/EconomicIndicatorsDashboard/EconomicExpansion-GDP.aspx
Federal Reserve cuts US GDP forecast; no hint of more support. (2011, June 23). Retrieved from The
Economic Times: http://economictimes.indiatimes.com/news/international-business/federal-
reserve-cuts-us-gdp-forecast-no-hint-of-more-support/articleshow/8956240.cms
National Income and Product Accounts Table. (2012, March 29). Retrieved from Bureau of Economic
Analysis:
http://www.bea.gov/National/Nipaweb/Tableview.Asp?Selectedtable=5&Viewseries=NO&Java=
No&Request3Place=N&3Place=N&Fromview=YES&Freq=Year&Firstyear=1990&Lastyear=2010
What is GDP and why is it so important? (2007, September 19). Retrieved from Investopedia:
http://www.investopedia.com/Ask/Answers/199.Asp#Axzz1aeuepbgk