GDP is a crucial lagging indicator for investors evaluating the economy. It reveals whether the economy is expanding or contracting by measuring the total value of goods and services produced over a specific period. A growing GDP signals economic expansion, while a declining GDP may indicate a recession or slowdown. This helps investors assess the overall health of the economy based on past performance.

The BEA provides this API to the public as a way to access various economic data, such as GDP, personal income, and other key economic indicators. The data made available through the API is public information, and the BEA encourages its use for research, analysis, and other purposes.

We can use python language, specifically the requests and pandas libraries, to send an API request to the BEA, authenticate using an API key, retrieve GDP data from the NIPA dataset in JSON format based on specified parameters, check for a successful response and proper data structure, process the data by converting it into a pandas DataFrame.

We have access to GDP data from the second quarter of 1974 through the second quarter of 2024, detailed across categories such as Durable Goods, Equipment, Exports, Federal Spending, Fixed Investment, Goods, Government Consumption Expenditures and Gross Investment, Gross Domestic Product (both real and current dollars), Gross Private Domestic Investment, Imports, Intellectual Property Products, National Defense, Nondefense, Nonresidential Investment, Nondurable Goods, Personal Consumption Expenditures, Residential Investment, Services, State and Local Government Spending, and Structures.

A dashboard has been built to organize the forementioned key economic indicators and clearly visualize the trends for each one.

• Gross Domestic Product (GDP): Measures the total economic output of a country. It represents the market value of all goods and services produced within a nation over a specified period.

• Personal Consumption Expenditures (PCE): Tracks consumer spending on goods and services. This is a significant component of GDP as it reflects the overall demand in the economy.

• Goods: Tangible items purchased by consumers and businesses. Goods are further broken down into:

  • Durable Goods: Long-lasting items (e.g., cars, appliances) expected to last three or more years.

  • Nondurable Goods: Items consumed quickly (e.g., food, fuel, clothing).

• Services: Intangible products like healthcare, education, and finance, which constitute a large portion of consumer spending.

• Gross Private Domestic Investment: Refers to business expenditures on capital goods and investments in inventories.

  • Fixed Investment: Spending on long-term assets like buildings, machinery, and equipment. It is further divided into:

    • Nonresidential: Investments in commercial infrastructure such as factories, warehouses, and office buildings.

    • Residential: Investments in housing and residential property.

    • Structures: Nonresidential structures like bridges, roads, and factories.

    • Equipment: Machinery, tools, and technology purchased by businesses for production.

    • Intellectual Property Products: Includes software, research and development, and artistic originals.

• Exports: Goods and services produced domestically and sold abroad, contributing positively to GDP.

• Imports: Goods and services purchased from foreign countries, which are subtracted from GDP as they represent outflows of domestic currency.

• Government Consumption Expenditures and Gross Investment: The spending by federal, state, and local governments on goods and services.

  • Federal: Divided into:

    • National Defense: Military-related expenditures.

    • Nondefense: Other federal government spending, including infrastructure, education, and healthcare.

  • State and Local: Spending by regional governments on services such as education, public safety, and transportation.