Gross Domestic Product (GDP)

• What it is: A quarterly measure of the production and consumption of goods and services, broken down into several sub-categories.

• Who puts it out: Bureau of Economic Analysis (www.bea.doc.gov).

• When it’s released: 8:30 a.m. ET, approximately one month after the end of each quarter.

• What it means: GDP is used to define business peaks and troughs, and together with employment data, it gives an important indication of productivity growth and economic strength.

Usually a growth rate between 2.0 and 2.5 percent is considered positive when combined with an unemployment rate of 5 to 6 percent. A higher growth rate and/or a lower unemployment rate might indicate inflationary pressure. A lower growth rate might indicate the economy is stalling. A relatively large increase of inventories might indicate a future decrease in the growth rate, as production (supply) at least temporarily has outgrown demand.

Thus, both numbers too low or too high can be interpreted negatively, depending on the current position in the business cycle. The fear of inflation, for example, generally gets more pronounced the longer a high-growth period lasts.