#FOMCMeeting

Gross domestic product (GDP) calculates the total market value of final goods and services produced within a country’s borders. It serves as the most widely used gauge of economic performance. The output-based GDP method (or GDP by industry) aggregates the gross value added—calculated as total output minus intermediate consumption—across all economic sectors (valued at basic prices), then adds net taxes on products (taxes minus subsidies). This figure is also adjusted to account for inflation.

Personal consumption expenditure (PCE) represents the portion of GDP that tracks household consumption. It quantifies spending on goods and services specifically purchased and used by individuals, reflecting demand within the economy directed toward personal use.