GDP, or gross domestic product, is a reflection of the economy in a particular region of the world. Though it makes sense to refer to states as having a GDP, you might run into situations where the economic performance of a state is referred to as the GSP, which stands for gross state product. Either way, for the sake of this article, we will be calling them GDP values.
Since we are looking at the GDP by state in the United States of America, the GDP helps to inform people about how well a state is doing in terms of the state's economy. The GDP of a state refers to the overall production and distribution of goods in a state. You will find that GDP values are listed as dollar amounts because it is a monetary representation of how much a state either brought in or spent on a quarterly basis.
These are two different ways of viewing GDP in a country. The income approach is the former of the two, and it is defined by calculating how much money everyone in a certain location kept as profits over the course of a year. The expenditure method of determining GDP is the exact opposite way of calculating gross domestic product for a particular state, but the value should still be relatively similar, if not identical. The expenditure method looks at how much money people spent in a given year, compared to how much they made in total.
Since an annual GDP value cannot be determined until the year in focus comes to an end, the most recent GDP reports reflect the outcomes of 2018. The GDP values by state for 2019 will be available in 2020, and so on and so forth.
The gross domestic product of a state is calculated every three months. With this quarterly system in place, the progression or digression of the GDP in each state can be seen so state governments can understand how their economy performed throughout the year. Looking at economical performance from one year to the next is important in order to see where the state is thriving and where the state could use additional effort, but it is more informative for the GDP values to reflect shorter periods of time.
A lot of changes take place on a month-to-month basis, and economies are already very fluctuating variables, so it makes more sense to view trends on a smaller scale than reflecting on GDP values once at the end of every year. Now that we understand that GDP values reflect the economic performance of a state, let’s start looking at numbers!
Here are the percentages of change between the third quarter GDP values and the fourth quarter GDP values by state for the year 2018.
GDP by State in 2017
Looking back in history is never a bad idea. While many unfortunate events have happened and many ill circumstances have transpired, viewing how everything used to be helps people in present time understand how far everyone has come. In order to fully know if the states in America have experienced a better year in terms of individual GDP values, or if the economy of a state has actually performed less well than usual in 2018, it is helpful to reflect on the previous year and compare values between the two.
Looking at the GDP by state in 2018 only tells you how each state performed in a given year. But if you want to see what those GDP values mean in terms of improvement and change, it is helpful to look back at the year before and see how GDP values compare between 2017 and 2018.