ECON 111 · Chapter 22

GDP, Prices
and Real Output

Separate changes in prices from changes in production. Learn what GDP measures, build a price index, and interpret real GDP per capita.

The lecture and assignment preserve their stated classroom vintages. Current Data Lab observations may differ because of later releases and revisions.

Explore the chapter’s measurements

• Real GDP growth — The broadest inflation-adjusted measure of current U.S. production, shown at an annualized quarterly rate.
• Real GDP — The inflation-adjusted level of goods and services produced in the United States.
• Headline CPI — Prices paid by urban consumers. The underlying monthly index is retained for every calculation.
• Core CPI — A CPI measure that removes the especially volatile food and energy categories.
• Headline PCE inflation — Headline PCE is the price measure used for the Federal Reserve’s longer-run 2% inflation goal. Coverage and weights differ from CPI.
• Core PCE inflation — PCE excluding food and energy is a gauge of underlying inflation trends. The Federal Reserve’s stated target concerns headline PCE.
• 30-year mortgage rate — The national average rate on a conventional 30-year fixed mortgage.
• Nominal GDP — Current-dollar domestic production; combines price and quantity changes.
• GDP implicit price deflator — The ratio of nominal to real GDP times 100; covers domestic production, not just household purchases.
• Real GDP per capita — Average real domestic production per resident in chained reference-year dollars; not a distribution or welfare measure.
• Headline CPI · NSA — CPI-U without seasonal adjustment. Use this version when matching the chapter’s fixed annual-average evidence.
• CPI-W — Prices for urban wage earners and clerical workers; a different population from CPI-U.
• Chained CPI-U — Accounts for substitution across item categories; initial estimates are revised. Not seasonally adjusted.
• CPI shelter — Prices of shelter services, seasonally adjusted; excludes purchase prices of homes.
• Rent of primary residence — Rent paid for primary residences; seasonally adjusted shelter-service index.
• Owners’ equivalent rent — Rental-equivalent shelter services for owner-occupied homes, not house prices or mortgage payments.
• PPI final demand — Prices received by domestic producers for final-demand goods, services and construction; not a household cost-of-living index.
• Manufacturing hourly earnings — Average hourly earnings of manufacturing production and nonsupervisory employees. This is not the median wage used in the fixed burger example.
• FHFA house prices — All-transactions repeat-sales index, including purchases and refinancings. Asset prices, not shelter services or affordability.

The burger, constant-size home and hypothetical basket examples are instructional calculations. Official series do not replace their fixed inputs.