Long Term Perspective

GDP measures total domestic production quarterly. Final sales reflect demand by consumers, businesses, and government. When final sales grow much faster than GDP for at least two quarters, it signals the need to rebuild inventories. That means production increases and so does GDP. Notice that over the long run, real final sales and real GDP grow by roughly the same magnitude.

Short Term Perspective

Real GDP grew at a moderate 2.4 percent rate in the third quarter, finally slowing down from the heady pace of the past several quarters. Real final sales also moderated, perhaps, suggesting that GDP shifted into lower gear. But it will take more than one quarter's figures to determine whether the slower growth is temporary or not.

Real GDP vs. Final Sales   •   Real Consumer Spending vs. Real Income   •   Debt Burden vs. Savings Rate

Business Fixed Investment vs. Net Cash Flow   •   New Orders   •   Housing Starts vs. Mortgage Rates

Merchandise Exports vs. Trade Weighted Dollar   •   Merchandise Imports vs. Trade Weighted Dollar