Retail and wholesale trade industries led the increase in private inventory investment. The largest contributor to retail was inventory investment by automobile dealers. Increases in both products and services contributed to the increase in exports. Consumer products, industrial supplies and materials, and foods, feeds, and beverages were the biggest contributions to the growth in goods exports. Travel was the driving force behind the increase in service exports. The rise in PCE was mostly due to an increase in services, with health care, recreation, and transportation accounting for the majority of the increase. The increase in nonresidential fixed investment was mostly due to a rise in intellectual property items, which was partially offset by a drop in structures.
The reduction in federal spending was mostly due to lower defense spending on intermediate goods and services. State and local government spending fell as a result of lower consumption (driven by state and local government employee remuneration, particularly education) and gross investment (led by new educational structures). The rise in imports was mostly due to a rise in goods (led by non-food and non-automotive consumer goods, as well as capital goods).
After gaining 2.3 percent in the third quarter, real GDP increased by 6.9% in the fourth quarter. The fourth-quarter increase in real GDP was primarily due to an increase in exports, as well as increases in private inventory investment and PCE, as well as smaller decreases in residential fixed investment and federal government spending, which were partially offset by a decrease in state and local government spending. Imports have increased.
In the fourth quarter, current dollar GDP climbed 14.3% on an annual basis, or $790.1 billion, to $23.99 trillion. GDP climbed by 8.4%, or $461.3 billion, in the third quarter (table 1 and table 3).
In the fourth quarter, the price index for gross domestic purchases climbed 6.9%, compared to 5.6 percent in the third quarter (table 4). The PCE price index climbed by 6.5 percent, compared to a 5.3 percent gain in the previous quarter. The PCE price index grew 4.9 percent excluding food and energy expenses, compared to 4.6 percent overall.
Personal Income
In the fourth quarter, current-dollar personal income climbed by $106.3 billion, compared to $127.9 billion in the third quarter. Increases in compensation (driven by private earnings and salaries), personal income receipts on assets, and rental income partially offset a decline in personal current transfer receipts (particularly, government social assistance) (table 8). Following the end of pandemic-related unemployment programs, the fall in government social benefits was more than offset by a decrease in unemployment insurance.
In the fourth quarter, disposable personal income grew $14.1 billion, or 0.3 percent, compared to $36.7 billion, or 0.8 percent, in the third quarter. Real disposable personal income fell 5.8%, compared to a 4.3 percent drop in the previous quarter.
In the fourth quarter, personal savings totaled $1.34 trillion, compared to $1.72 trillion in the third quarter. In the fourth quarter, the personal saving rate (savings as a percentage of disposable personal income) was 7.4 percent, down from 9.5 percent in the third quarter.
GDP for 2021
In 2021, real GDP climbed 5.7 percent (from the 2020 annual level to the 2021 annual level), compared to a 3.4 percent fall in 2020. (table 1). In 2021, all major subcomponents of real GDP increased, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports have risen (table 2).
PCE increased as both products and services increased in value. “Other” nondurable items (including games and toys as well as medications), apparel and footwear, and recreational goods and automobiles were the major contributors within goods. Food services and accommodations, as well as health care, were the most significant contributors to services. Increases in equipment (dominated by information processing equipment) and intellectual property items (driven by software as well as research and development) partially offset a reduction in structures in nonresidential fixed investment (widespread across most categories). The rise in exports was due to an increase in products (mostly non-automotive capital goods), which was somewhat offset by a drop in services (led by travel as well as royalties and license fees). The increase in residential fixed investment was primarily due to the development of new single-family homes. An increase in wholesale commerce led to an increase in private inventory investment (mainly in durable goods industries).
In 2021, current-dollar GDP expanded by 10.0 percent, or $2.10 trillion, to $22.99 trillion, compared to 2.2 percent, or $478.9 billion, in 2020. (tables 1 and 3).
In 2021, the price index for gross domestic purchases climbed by 3.9 percent, compared to 1.2 percent in 2020. (table 4). Similarly, the PCE price index grew 3.9 percent, compared to 1.2 percent in the previous quarter. The PCE price index climbed 3.3 percent excluding food and energy expenses, compared to 1.4 percent overall.
Real GDP rose 5.5 percent from the fourth quarter of 2020 to the fourth quarter of 2021 (table 6), compared to a 2.3 percent fall from the fourth quarter of 2019 to the fourth quarter of 2020.
From the fourth quarter of 2020 to the fourth quarter of 2021, the price index for gross domestic purchases grew 5.5 percent, compared to 1.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020. The PCE price index climbed by 5.5 percent, compared to 1.2 percent for the year. The PCE price index increased 4.6 percent excluding food and energy, compared to 1.4 percent overall.
Source Data for the Advance Estimate
A Technical Note that is issued with the news release on BEA’s website contains information on the source data and major assumptions utilized in the advance estimate. Each version comes with a thorough “Key Source Data and Assumptions” file. Refer to the “Additional Details” section below for information on GDP updates.
Is GDP a rate of growth?
The GDP growth rate is a measurement of how quickly the economy is expanding. The rate compares the country’s economic output in the most recent quarter to the prior quarter. GDP is a measure of economic output. The current GDP growth rate in the United States is 6.9%.
What is the distinction between GDP and growth?
What is the difference between growth and development, as posed by readers? Is it possible for a country to grow economically without developing?
- Improvements in the quality of life and living standards, such as literacy, life expectancy, and health care, are examples of economic growth.
- Under normal circumstances, we would anticipate economic growth to facilitate further economic development. More money can be spent on health care and education with a higher real GDP.
- The link, however, is not confirmed. The benefits of economic expansion may be squandered or kept by a select wealthy few.
Graph showing GDP vs GPI
Genuine Progress Indicator (GPI) is an acronym for Genuine Progress Indicator. This is a broader measure of living standards than GDP alone. GPI also considers the environment, health care, pollution, and education, and hence can be used to assess economic progress. It indicates that economic growth increased GPI from 1950 to 1980. However, the connection deteriorated after the mid-1980s.
Economic growth
The increase in Real GDP is a measure of economic growth (real output). The Gross Domestic Product (GDP) is a measure of national income, output, and spending. It essentially calculates the entire amount of products and services generated in a given economy.
Economic development
The term “development” refers to a broader set of statistics than merely GDP per capita. The study of development is concerned with how people are affected in the real world. It examines their real living conditions as well as their freedom to enjoy a high standard of living.
Poverty in its purest form. Do they have enough money to eat a nutritious diet and provide basic necessities like shelter? Economic growth may be required in order for people to have better wages and be able to buy more food. Economic growth, on the other hand, does not always improve people’s living conditions. Because they lack the ability to participate, economic growth may pass the poorest sectors of society by. One significant question is whether the advantages of economic progress are divided evenly across society’s many groups.
Standards in education, such as literacy rates. Growth in the economy may allow more money to be spent on education. There is no guarantee, however, that the proceeds of growth will be spent to raise educational standards. The relationship between GDP and literacy rates is frequently skewed.
Environmental regulations. Economic expansion, on the other hand, has the potential to affect the environment and people’s living standards. Higher output, for example, could result in more pollution. If increased growth necessitates the destruction of trees, this could have long-term negative environmental implications.
Infrastructure / Transportation Infrastructure and transportation improvements are required for economic development. This could be crucial for locations shut off from the primary sources of economic growth.
Measures of economic development
Because it relies on which components are included in the measure, gauging economic progress is not as precise as calculating GDP.
Economic growth can be measured in a variety of ways, including the Human Development Index (HDI)
- The Life Expectancy Index is a measure of how long people live. Average life expectancy in comparison to the world average.
Factors affecting economic growth in developing countries
- Corruption levels, such as the percentage of tax revenue that is really collected and spent on public services.
- Standards of education and labor productivity. The workforce’s productivity is influenced by basic literacy and education levels.
- Inward investment levels. China, for example, has made investments in a number of African countries in order to facilitate the export of raw commodities that its economy requires.
- There is a lot of job mobility. Is it possible for labor to transition from relatively inefficient agriculture to more productive manufacturing?
- The amount of foreign help and investment that comes in. Aid that is targeted can help to enhance infrastructure and living conditions.
- Savings and investment levels. Increased savings can be used to fund further investment, which will aid economic growth.
Economic growth without development
It is feasible to have both economic growth and development at the same time. i.e., the economy is growing, but most people aren’t seeing any real gains in their living conditions. This could happen as a result of:
- Only a small percentage of the population may gain from economic progress. A country’s GDP will increase if it produces more oil, for example. However, it is possible that this oil is held by a single company, in which case the average worker does not gain.
- Corruption. Although a country’s GDP may increase, the advantages of growth may be diverted to politicians’ bank accounts.
- Concerns about the environment. The production of harmful chemicals will enhance real GDP. It can, however, cause environmental and health issues if not properly regulated. This is an illustration of how expansion can result in a drop in living standards for many people.
- Congestion. Congestion can be exacerbated by economic expansion. As a result, people will spend more time stuck in traffic. They may have a higher GDP, but their living standards are worse since they spend more time stuck in traffic.
- The output was not consumed. A rise in GDP is reflected when a state-owned industry boosts output. However, if the output is not utilised, it does not result in a rise in living standards.
- Spending on the military. Spending more on military items can boost a country’s GDP. However, if this is done at the price of health care and education, living standards may suffer.
- Is the increased GDP beneficial to everyone, or are the proceeds kept by a tiny percentage of the population?
- Statistics like the Human Development Index, which looks at real GDP as well as education and health care indexes, could be useful.
Is GDP calculated per capita?
The Gross Domestic Product (GDP) per capita is calculated by dividing a country’s GDP by its total population. The table below ranks countries throughout the world by GDP per capita in Purchasing Power Parity (PPP), as well as nominal GDP per capita. Rather to relying solely on exchange rates, PPP considers the relative cost of living, offering a more realistic depiction of real income disparities.
What is the current GDP rate?
The nominal GDP, or GDP at current prices, for the year 2021-22 is anticipated to be 232.15 lakh crore, compared to a tentative estimate of 197.46 lakh crore for the year 2020-21. The nominal GDP growth rate is expected to be 17.6% in 2021-22.
What does GDP mean?
This article is part of Statistics for Beginners, a section of Statistics Described where statistical indicators and ideas are explained in a straightforward manner to make the world of statistics a little easier for pupils, students, and anybody else interested in statistics.
The most generally used measure of an economy’s size is gross domestic product (GDP). GDP can be calculated for a single country, a region (such as Tuscany in Italy or Burgundy in France), or a collection of countries (such as the European Union) (EU). The Gross Domestic Product (GDP) is the sum of all value added in a given economy. The value added is the difference between the value of the goods and services produced and the value of the goods and services required to produce them, also known as intermediate consumption. More about that in the following article.
What factors influence GDP growth?
A GDP price deflator, which is the difference in prices between the current year and the base year, is used to compute real GDP. For example, if prices have risen by 5% since the base year, the deflator is 1.05. Real GDP is calculated by dividing nominal GDP by this deflator.
Which country is the poorest in the world?
Burundi, a small landlocked country ravaged by Hutu-Tutsi ethnic conflict and civil violence, has the terrible distinction of being the poorest country on the planet. Food scarcity is a serious concern, with almost 90 percent of its approximately 12 million residents reliant on subsistence agriculture (with the overwhelming majority of them surviving on $1.25 a day or less), and food insecurity is about twice as high as the norm for Sub-Saharan African countries. Furthermore, access to water and sanitation is still limited, and only about 5% of the population has access to electricity. Needless to say, the epidemic has worsened all of these issues.
How did things get to this point, despite the fact that the civil war officially ended 15 years ago? Infrastructure deficiencies, widespread corruption, and security concerns are all common causes of extreme poverty. In 2005, Pierre Nkurunziza, a charismatic former Hutu rebel who became president, was able to unite the country behind him and begin the process of reconstructing the economy. However, in 2015, his announcement that he would run for a third termwhich the opposition claimed was illegal under the constitutionreignited old feuds. Hundreds of people were killed in fighting, and tens of thousands were internally or externally displaced as a result of the failed coup attempt.
Nkurunziza died in the summer of 2020, at the age of 55, from cardiac arrest, while it is widely assumed that Covid-19 was the true reason. Days later, Evariste Ndayishimiye, an ex-general designated by Nkurunziza to succeed him when his term expired, was sworn in. His track record has been mixed so far. While he, like his predecessor, minimized the virus’s severity, and claims of human rights violations continue to emerge from the country, he made an effort to relaunch the economy and mend diplomatic relations with his African neighbors, particularly the West. His efforts were rewarded: the United States and the European Union recently withdrew financial restrictions imposed in the aftermath of the 2015 political turmoil, resuming aid to Burundi. Could this be a watershed moment for the world’s poorest country?
Which European country is the poorest?
Financial and social rankings of European sovereign states
- Despite having Europe’s greatest GDP growth rate, Moldova is one of the poorest countries in the continent, with the lowest GDP per capita.
- Madrid is Spain’s financial capital and one of Europe’s most important financial centers.
What accounts for Ireland’s high GDP?
The fundamental reason for Ireland’s high GDP growth rates is that, in recent years, a number of large multinational firms have transferred their economic activities, and more especially their underlying intellectual property, to Ireland, largely due to low corporate tax rates.
What will be the GDP in 2021?
In addition to updated fourth-quarter projections, today’s announcement includes revised third-quarter 2021 wages and salaries, personal taxes, and government social insurance contributions, all based on new data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and wages climbed by $306.8 billion in the third quarter, up $27.7 billion from the previous estimate. With the addition of this new statistics, real gross domestic income is now anticipated to have climbed 6.4 percent in the third quarter, a 0.6 percentage point gain over the prior estimate.
In 2021, real GDP climbed by 5.7 percent, unchanged from the previous estimate (from the 2020 annual level to the 2021 annual level), compared to a 3.4 percent fall in 2020. (table 1). In 2021, all major components of real GDP increased, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports have risen (table 2).
In 2021, current-dollar GDP climbed by 10.1 percent (revised), or $2.10 trillion, to $23.00 trillion, compared to 2.2 percent, or $478.9 billion, in 2020. (tables 1 and 3).
In 2021, the price index for gross domestic purchases climbed 3.9 percent, which was unchanged from the previous forecast, compared to 1.2 percent in 2020. (table 4). Similarly, the PCE price index grew 3.9 percent, which was unchanged from the previous estimate, compared to a 1.2 percent gain. With food and energy prices excluded, the PCE price index grew 3.3 percent, unchanged from the previous estimate, compared to 1.4 percent.
Real GDP grew 5.6 (revised) percent from the fourth quarter of 2020 to the fourth quarter of 2021 (table 6), compared to a fall of 2.3 percent from the fourth quarter of 2019 to the fourth quarter of 2020.
From the fourth quarter of 2020 to the fourth quarter of 2021, the price index for gross domestic purchases climbed 5.6 percent (revised), compared to 1.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020. The PCE price index grew 5.5 percent, unchanged from the previous estimate, versus a 1.2 percent increase. The PCE price index grew 4.6 percent excluding food and energy, which was unchanged from the previous estimate, compared to 1.4 percent.