US nominal GDP of $32.49 trillion at a deflator of 133.9 is $24.27 trillion in 2017 dollars
Nominal GDP values output at the prices of the day, so it rises when prices rise even if nothing more is produced. Real GDP strips the price change out by restating output in a base year’s prices. With a price index built so the base year equals 100, real GDP is nominal GDP divided by the index, times 100.
Real GDP = nominal GDP ÷ deflator × 100
For the United States in the second quarter of 2026, nominal GDP was $32,486.1 billion at an annual rate and the GDP deflator 133.855, so real GDP was 32,486.1 ÷ 1.33855 = $24,269.6 billion in 2017 dollars — the figure BEA publishes, to rounding.
Worked example
Nominal = 32,486.1, deflator = 133.855
Real = 32,486.1 ÷ 133.855 × 100
Real = 24,269.6 ($ billions, 2017 prices)
7,720 of output at this year’s prices is 7,000 at base-year prices: real GDP of 7,000
Without a price index, real GDP comes straight from quantities. Value this year’s output at this year’s prices for nominal GDP, and at the base year’s prices for real GDP. With three goods — 1,000 units of A at $2.50 (base $2.00), 300 of B at $11 (base $10) and 80 of C at $24 (base $25) — nominal GDP is 2,500 + 3,300 + 1,920 = 7,720 and real GDP 2,000 + 3,000 + 2,000 = 7,000.
Real GDP = Σ p₀ × q₁
The implied deflator is 7,720 ÷ 7,000 × 100 = 110.3: prices are about 10% above the base year overall, although good C became cheaper. Choose quantity mode on this page to run your own goods.
Three goods
Nominal = 2.5×1,000 + 11×300 + 24×80 = 7,720
Real = 2×1,000 + 10×300 + 25×80 = 7,000
Deflator = 7,720 ÷ 7,000 × 100 = 110.3
The GDP deflator prices what the economy produces; a CPI prices what consumers buy
The right index for real GDP is the GDP deflator, which covers every good and service produced at home — including investment goods, government services and exports — and excludes imports. The consumer price index covers a basket of consumer purchases, including imports, and nothing else.
Dividing nominal GDP by a CPI answers a different question — what the economy’s output would buy in consumer goods — which is useful for some comparisons but is not official real GDP. The two indices can diverge noticeably when import or investment-goods prices move differently from consumer prices.
BEA uses chained 2017 dollars because a fixed base year distorts growth as prices shift
Valuing every year at one base year’s prices overweights goods whose prices have since fallen — computers are the classic case — and so overstates growth the further you move from the base. Since 1996 the United States has measured real GDP with chain-type indices, which link each year to the next using prices from both, and the reference year is currently 2017.
The chained figure is still expressed “in 2017 dollars”, but its components no longer add up exactly to the total. For teaching and for short spans, the fixed-base method on this page is close; for decades-long comparisons, use the published chained series.
Nominal growth of 5% with 3% inflation is real growth of 1.94%
Growth rates follow the same logic as levels. Real GDP growth is nominal growth deflated by the change in the price index: (1 + g_nominal) ÷ (1 + π) − 1. With 5% nominal growth and 3% inflation, real growth is 1.05 ÷ 1.03 − 1 = 1.94%, close to the shortcut 5 − 3 = 2%.
g_real = (1 + g_nominal) ÷ (1 + π) − 1
The GDP growth rate calculator on this site computes growth between two levels; enter real GDP in both periods to get the real rate directly.
Real GDP measures market output at constant prices, not well-being
A better phone at the same price is more output, but price indices capture quality change only imperfectly, and brand-new goods enter the index late. Unpaid work at home, leisure, the depletion of natural resources and the distribution of income are outside GDP altogether.
Those gaps do not make real GDP wrong for what it measures — the volume of market production — but they are why it is paired with other measures when the question is how well people are living.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.