Personal consumption expenditures (PCE), federal government spending, state and local government spending, residential fixed investment, and exports all contributed to the increase in real GDP in the fourth quarter, which was partially offset by negative contributions from private inventory investment and nonresidential fixed investment. Imports, which are deducted from GDP calculations, declined (table 2).
The fourth quarter’s real GDP growth was the same as the third. A drop in imports, an increase in government spending, and a lesser drop in nonresidential investment were countered by a greater drop in private inventory investment and a slowdown in PCE in the fourth quarter.
In the fourth quarter, current dollar GDP climbed by 3.6 percent, or $191.7 billion, to $21.73 trillion. GDP climbed by 3.8 percent, or $202.3 billion, in the third quarter (table 1 and table 3).
In the fourth quarter, the price index for gross domestic purchases grew 1.5 percent, compared to 1.4 percent in the third quarter (table 4). The PCE price index climbed by 1.6 percent, compared to 1.5 percent previously. The PCE price index grew 1.3 percent excluding food and energy expenses, compared to a 2.1 percent increase overall.
In the fourth quarter, current-dollar personal income climbed by $148.7 billion, compared to $162.6 billion in the third quarter. Decelerations in proprietors’ income, personal current transfer receipts, and personal dividend income were somewhat offset by a smaller fall in personal interest income and an acceleration in compensation, resulting in the lower increase (table 8).
In the fourth quarter, disposable personal income climbed by $127.4 billion, or 3.1 percent, compared to $179.5 billion, or 4.5 percent, in the third quarter. Real disposable personal income climbed by 1.5 percent, compared to 2.9 percent in the previous quarter.
In the fourth quarter, personal savings totaled $1.29 trillion, down from $1.30 trillion in the third quarter. In the fourth quarter, the personal saving rate personal savings as a proportion of disposable personal income was 7.7%, down from 7.8% in the third quarter.
In 2019, real GDP increased by 2.3 percent (from the previous year’s annual level to the current year’s annual level), compared to 2.9 percent in 2018. (table 1).
PCE, nonresidential fixed investment, federal government expenditure, state and local government spending, and private inventory investment all contributed to the increase in real GDP in 2019, which was partially offset by negative contributions from residential fixed investment. Imports have risen (table 2).
The slowdown in real GDP in 2019 compared to 2018 was mostly due to slower nonresidential fixed investment and PCE, as well as a drop in exports, which were partially offset by faster state and local government spending. Imports grew at a slower pace in 2019 than in 2018.
GDP in current dollars climbed 4.1 percent, or $848.8 billion, to $21.43 trillion in 2019, compared to 5.4 percent, or $1,060.8 billion, in 2018. (table 1 and table 3).
In 2019, the price index for gross domestic purchases climbed by 1.6 percent, compared to 2.4 percent in 2018. (table 4). The PCE price index climbed by 1.4 percent, compared to a 2.1 percent increase in the previous quarter. The PCE price index grew 1.6 percent excluding food and energy expenses, compared to 1.9 percent overall (table 4).
Real GDP increased by 2.3 percent from the fourth quarter of 2018 to the fourth quarter of 2019. This is compared to a 2.5 percent gain in 2018. The price index for gross domestic purchases grew 1.5 percent in 2019, as assessed from the fourth quarter of 2018 to the fourth quarter of 2019. This is compared to a 2.2 percent gain in 2018. The PCE price index climbed by 1.5 percent, compared to 1.9 percent in the previous quarter. The PCE price index grew 1.6 percent excluding food and energy, compared to 1.9 percent overall (table 6).
A Technical Note that is issued with the press release on BEA’s Web site contains information on the source data and important assumptions utilized for unavailable source data in the advance estimate. Each version comes with a thorough “Key Source Data and Assumptions” file. See the “Additional Information” section below for more information on GDP updates.
What is the GDP of the United States in 2020?
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.
What was the GDP of the United States in 2019 and 2020?
In addition to updated fourth-quarter estimates, today’s announcement includes revised third-quarter 2020 wages and salaries, personal taxes, and government social insurance payments, all based on new data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and salaries are now anticipated to have climbed by $434.5 billion in the third quarter, a $66.5 billion decrease from the previous projection. With the addition of this new statistics, real gross domestic income is now anticipated to have climbed 24.1 percent in the third quarter, a 1.7 percentage point decrease from the prior estimate.
In 2020, real GDP fell 3.5 percent (from the 2019 annual level to the 2020 annual level), compared to a 2.2 percent growth in 2019. (table 1).
PCE, exports, private inventory investment, nonresidential fixed investment, and state and local government decreased real GDP in 2020, partially offset by increases in federal government spending and residential fixed investment. Imports are down (table 2).
A drop in services more than compensated for the decrease in PCE in 2020. (led by food services and accommodations, health care, and recreation services). The drop in exports was due to a drop in both services (driven by travel) and goods (mainly non-automotive capital goods). Private inventory investment fell as a result of broad losses in retail trade (mostly auto dealers) and wholesale trade (mainly durable goods industries). Structures (dominated by mining exploration, shafts, and wells) and equipment (headed by transportation equipment) decreased in nonresidential fixed investment, which was partly offset by an increase in intellectual property products (more than accounted for by software). The drop in state and local government spending corresponded to a drop in consumer spending (led by compensation).
The increase in federal spending was due to an increase in non-defense consumer spending (led by an increase in purchases of intermediate services that supported the processing and administration of Paycheck Protection Program loan applications by banks on behalf of the federal government). Increases in upgrades, as well as brokers’ commissions and other ownership transfer costs, accounted for the majority of the increase in residential fixed investment.
In 2020, current-dollar GDP fell 2.3 percent, or $498.3 billion, to $20.93 trillion, compared to a 4.0 percent, or $821.3 billion, growth in 2019. (tables 1 and 3).
In 2020, the price index for gross domestic purchases climbed by 1.2 percent, compared to 1.6 percent in 2019. (table 4). In 2020, the PCE price index climbed 1.2 percent, compared to 1.5 percent in 2019. The PCE price index grew 1.4 percent excluding food and energy expenses, compared to 1.7 percent overall.
Real GDP fell by 2.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020, according to data (table 6). In comparison, in 2019 there was a 2.3 percent gain.
The price index for gross domestic purchases grew 1.3 percent in 2020, as assessed from the fourth quarter of 2019 to the fourth quarter of 2020. In comparison, in 2019 there was a 1.4 percent gain. The PCE price index climbed by 1.2 percent, compared to a 1.5 percent increase in the previous quarter. The PCE price index grew 1.4 percent excluding food and energy, compared to 1.6 percent overall.
In 2019, how much did the GDP grow?
The US economy grew at a respectable 2.3 percent in 2019, buoyed by strong consumer and government spending, but falling short of President Trump’s pledge of at least 3% growth.
In 2021, what was the US GDP?
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.
What is the GDP of the United States in 2022?
According to our econometric models, the US GDP will trend around 22790.00 USD Billion in 2022 and 23420.00 USD Billion in 2023 in the long run.
What is the United States’ most recent GDP?
PCE increased as a result of increases in both services (headed by food services and lodging) and commodities (led by “other” nondurable goods, notably pharmaceutical products). Increases in equipment (headed by transportation equipment) and intellectual property items accounted for the growth in nonresidential fixed investment (led by research and development). The increase in exports was due to an increase in both products and services (dominated by non-automotive capital goods) (led by travel). A drop in retail trade inventories led to a drop in private inventory investment. The reduction in federal spending was mostly due to lower nondefense spending on intermediate goods and services. Nondefense services decreased in the second quarter as banks’ processing and management of Paycheck Protection Program (PPP) loan applications on behalf of the federal government reduced.
In the second quarter, current dollar GDP climbed 13.0 percent on an annual basis, or $684.4 billion, to $22.72 trillion. Current-dollar GDP climbed by 10.9 percent, or $560.6 billion, in the first quarter (revised, tables 1 and 3). The Key Source Data and Assumptions file on BEA’s website has more information on the source data that underpins the estimates.
In the second quarter, the price index for gross domestic purchases grew 5.7 percent, compared to 3.9 percent (revised) in the first quarter (table 4). The PCE price index climbed by 6.4 percent, compared to a 3.8 percent gain in the previous quarter (revised). The PCE price index climbed 6.1 percent excluding food and energy expenses, compared to 2.7 percent overall (revised).
In the second quarter, current-dollar personal income fell $1.32 trillion, or 22.0 percent, compared to an increase of $2.33 trillion (revised), or 56.8%, in the first quarter. The decrease was primarily due to a reduction in government social benefits associated with pandemic relief programs, particularly the reduction in direct economic impact payments to households established by the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act (table 8). Effects of Selected Federal Pandemic Response Programs on Personal Income provides more information on issues that affect personal income.
In the second quarter, disposable personal income fell $1.42 trillion, or 26.1 percent, compared to a rise of $2.27 trillion, or 63.7 percent (revised), in the first quarter. In contrast to a 57.6% gain in real disposable personal income, real disposable personal income fell by 30.6 percent.
Personal spending climbed by $680.8 billion, following a $538.8 billion increase. An increase in PCE for services drove the increase in outlays.
In the second quarter, personal savings totaled $1.97 trillion, down from $4.07 trillion (revised) in the first quarter.
In the second quarter, the personal saving rate (savings as a proportion of disposable personal income) was 10.9 percent, down from 20.8 percent in the first quarter.
A Technical Note that is issued with the news release on BEA’s website contains information on the primary source data and assumptions used in the advance estimate. For each release, a thorough Key Source Data and Assumptions file is also available. See the “Additional Information” section below for more information on GDP updates.
Annual Update of the National Economic Accounts
The Annual Update of the National Income and Product Accounts is included in today’s publication; the updated Industry Economic Accounts, as well as the third estimate of GDP for the second quarter of 2021, will be provided on September 30, 2021. The update covered the period from the first quarter of 1999 through the first quarter of 2021, with revisions to GDP, GDI, and their primary components. The base year is still 2012. GDP and the Economy, a May Survey of Current Business item, contains more information about the 2021 Annual Update.
From the second quarter of 2009 through the fourth quarter of 2019, real GDP increased at a pace of 2.3 percent annually, the same as previously reported. Real GDP declined at an annual rate of 19.2% from the fourth quarter of 2019 to the second quarter of 2020, which is the same as previously reported. Real GDP increased at an annual rate of 14.1 percent from the second quarter of 2020 to the first quarter of 2021, an upward revision of 0.1 percentage point from the previously released estimate.
BEA’s archives contain previously released estimates that have been superseded by today’s publication.
Updates for the First Quarter of 2021
Real GDP is expected to rise 6.3 percent in the first quarter of 2021 (table 1), 0.1 percentage point lower than previously reported. Downward revisions to federal government spending, state and local government spending, and exports were largely offset by an upward revision to nonresidential fixed investment in the revision.
Real GDI is now expected to have climbed 6.3 percent in the first quarter (table 1), compared to 7.6 percent in the prior released figures. Compensation was the biggest factor in the negative revision, which was based on fresh first-quarter wage and salary estimates from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.
The price index for gross domestic purchases is now anticipated to have risen 3.9 percent in the first quarter, down 0.1 percentage point from the previous estimate (table 4). The PCE price index climbed by 3.8 percent, which is 0.1 percentage point higher than the prior estimate. The PCE price index grew 2.7 percent, 0.2 percentage point more than previously reported, when food and energy prices were excluded.
What impact did Covid 19 have on the economy?
In December of this year, Covid 19 was discovered in Wuhan, China. The World Health Organization (WHO) classified Covid 19 a pandemic on January 30.
The current issue is that the virus is having a significant influence on the global economy. In recent days, the epidemic has altered the global economy. The coronavirus outbreak has spread to nearly every country on the planet. There’s no way of knowing how much the global coronavirus outbreak will cost the economy. Over the next decade, most major economies will lose at least 3% of their GDP (Gross Domestic Product).
We expect financial markets to remain volatile as the virus continues to disrupt economic activity and have a detrimental impact on manufacturing and service industries, particularly in developed countries. Because novel virus outbreaks are unlikely to go away anytime soon, strong worldwide action is essential not only to save lives but also to safeguard economic growth.
The second wave of coronavirus is currently affecting the country’s economy as well as the health sector.
Not only has the coronavirus harmed India’s economy, but it has also harmed the global economy. According to a recent World Bank report, the corona virus would have a significant impact on the Indian economy. India’s economic growth rate will plummet, according to Corona.
Thousands of people are on the streets throughout the country due to coronavirus illness, at a time when millions of others are in their homes and taking full advantage of the internet delivery system to receive the products they want while sitting at home.
Even before the coronavirus arrived in India, the country’s economic situation was precarious.
The economy of China, which was once the fastest expanding in the world, grew at a rate of 4.7 percent in 2019. This was the smallest increase in six years.
In 2019, India’s unemployment reached a 45-year high, while industrial output in the country’s eight major industries declined by 5.2 percent at the end of 2018. The situation was the worse in the last 14 years. In other words, India’s economic situation was already precarious.
Experts fear that as a result of the coronavirus’s effect, if there is a public health problem, the already fragile economy may suffer a further hit.
The Indian government must keep a close eye on the rate of development and provide the necessary support and assistance to Indian sectors that are reliant on China.
International institutions should address the identification, effect, spread, and prevention of diseases like coronavirus so that the disease can be controlled.
What was the debt of the United States in 2019?
The Treasury Department said this week that the United States’ total national debt had topped $30 trillion for the first time in history, an amount equal to roughly 130 percent of the country’s annual economic production, or GDP. The staggering sum places the United States among the world’s most indebted countries.
The federal debt has been huge and rising for decades, but the government’s response to the coronavirus outbreak, which included massive cash infusions into the U.S. economy, increased its expansion significantly.
Prior to the pandemic, the national debt was $22.7 trillion at the end of 2019. It had climbed by another $5 trillion to $27.7 trillion a year later. Since then, the country has added almost $2 trillion to its debt.
While the amount of $30 trillion has no meaning in and of itself, it may serve to draw attention to what some regard as a big worry for the country’s future health.
“Reaching $30 trillion in debt is a stark reminder of how high our debt is and how much we’ve been borrowing,” said Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget.
What was the fourth-quarter GDP for 2019?
Positive contributions from PCE, exports, residential fixed investment, federal government spending, and state and local government spending offset negative contributions from private inventory investment and nonresidential fixed investment in the fourth quarter, resulting in an increase in real GDP. Imports, which are deducted from GDP calculations, declined (table 2).
The fourth quarter’s real GDP growth was the same as the third. A drop in imports and an increase in government spending were offset in the fourth quarter by a bigger drop in private inventory investment and a slowdown in PCE.
In the fourth quarter, real gross domestic income (GDI) climbed by 2.6 percent, compared to 1.2 percent in the third quarter. In the fourth quarter, the average of real GDP and real GDI, a supplemental measure of U.S. economic activity that weights GDP and GDI equally, grew 2.4 percent, compared to 1.7 percent in the third quarter (table 1).
In the fourth quarter, current dollar GDP climbed by 3.5 percent, or $186.6 billion, to $21.73 trillion. Current-dollar GDP climbed by 3.8 percent, or $202.2 billion, in the third quarter (tables 1 and 3).
In the fourth quarter, the price index for gross domestic purchases climbed by 1.4 percent, the same as in the third quarter (table 4). The PCE price index climbed by 1.4 percent, compared to a 1.5 percent increase in the previous quarter. The PCE price index grew 1.3 percent excluding food and energy expenses, compared to a 2.1 percent increase overall.
The “Key Underlying Data and Assumptions” file on BEA’s website has more detail on the source data that underpins the estimates.
The fourth-quarter real GDP growth rate was unchanged from the second estimate in the third estimate. The PCE, residential investment, and state and local government spending have all been increased. Downward revisions to federal government spending and nonresidential fixed investment, as well as an upward revision to imports, counterbalance these upward revisions. See the Technical Note for further information. See the “Additional Information” section below for more information on GDP updates.
PCE, nonresidential fixed investment, federal government expenditure, state and local government spending, and private inventory investment all contributed to the increase in real GDP in 2019, which was partially offset by a negative contribution from residential fixed investment. Imports have risen (table 2).
The slowdown in real GDP in 2019 compared to 2018 was mostly due to slower nonresidential fixed investment, exports, and PCE, which were partially offset by faster state and local government spending and federal government spending. Imports grew at a slower pace in 2019 than in 2018.
GDP in current dollars climbed 4.1 percent, or $847.5 billion, to $21.43 trillion in 2019, compared to 5.4 percent, or $1,060.8 billion, in 2018. (table 1 and table 3).
In 2019, real GDP increased by 1.9 percent, compared to 2.5 percent in 2018. (table 1).
In 2019, the price index for gross domestic purchases climbed by 1.5 percent, compared to 2.4 percent in 2018. (table 4). The PCE price index climbed by 1.4 percent, compared to a 2.1 percent increase in the previous quarter. The PCE price index grew 1.6 percent excluding food and energy expenses, compared to 1.9 percent overall (table 4).
Real GDP increased by 2.3 percent from the fourth quarter of 2018 to the fourth quarter of 2019. This is compared to a 2.5 percent gain in 2018. Real GDI grew 2.0 percent in 2019, as measured from the fourth quarter of 2018 to the fourth quarter of 2019. This is compared to a 2.3 percent gain in 2018. (table 6).
From the fourth quarter of 2018 to the fourth quarter of 2019, the price index for gross domestic purchases climbed by 1.4 percent. This is compared to a 2.2 percent gain in 2018. The PCE price index climbed by 1.4 percent, compared to 1.9 percent in the previous quarter. The PCE price index grew 1.6 percent excluding food and energy, compared to 1.9 percent overall (table 6).
In the fourth quarter, profits from current production (business profits adjusted for inventory valuation and capital consumption) climbed $53.0 billion, compared to a decrease of $4.7 billion in the third quarter (table 10).
Domestic financial corporation profits grew $0.7 billion in the fourth quarter, compared to a $4.7 billion loss in the third quarter. Domestic nonfinancial firms’ profits grew $53.7 billion, compared to a $5.5 billion fall in financial corporations’ profits. Profits in the rest of the globe fell $1.4 billion, compared to a $5.5 billion increase in the United States. Receipts climbed by $3.4 billion in the fourth quarter, while payments increased by $4.8 billion.
Profits from current production remained constant in 2019, after increasing by $68.7 billion in 2018. Domestic financial businesses saw a $7.1 billion gain in profits, compared to an increase of $11.1 billion. Domestic nonfinancial firms’ profits fell $36.4 billion, compared to a $10.0 billion increase in financial corporations’ profits. Profits in the rest of the world climbed by $29.3 billion, compared to a $47.6 billion increase in the United States.
How much debt does America have?
“Parties in power have built up the deficit through increased spending and poorer tax collection, regardless of political affiliation,” says Brian Rehling, head of Global Fixed Income Strategy at Wells Fargo Investment Institute.
While it’s easy to suggest that a specific president or president’s administration led the federal deficit and national debt to move in a given direction, it’s crucial to remember that only Congress has the power to pass legislation that has the greatest impact on both figures.
Here’s how Congress responded during four major presidential administrations, and how their decisions affected the deficit and national debt.
Franklin D. Roosevelt
FDR served as the country’s last four-term president, guiding the country through a series of economic downturns. His administration spanned the Great Depression, and his flagship New Deal economic recovery plan aided America’s rebound from its financial abyss. But the greatest substantial increase to the national debt was the expense of World War II, which added nearly $186 billion to the national debt between 1942 and 1945. During FDR’s presidency, Congress added $236 billion to the national debt, a rise of 1,048 percent.
Ronald Reagan
Congress passed two major tax cuts during Reagan’s two administrations, the Economic Recovery Tax Act of 1981 and the Tax Reform Act of 1986, both of which reduced government income. Between 1982 and 1990, Congress passed Acts that reduced revenue as a percentage of GDP by 1.7 percent, resulting in a revenue shortfall that contributed to the national debt rising 261 percent ($1.26 trillion) during his presidency, from $924.6 billion to $2.19 trillion.
Barack Obama
The Obama administration oversaw both the Great Recession and the recovery that followed the collapse of the mortgage market throughout his two years in office. The Economic Stimulus Act of 2009, which pumped $831 billion into the economy and helped many Americans avoid foreclosure, was passed by Congress in 2009. When passed by a strong bipartisan vote, congressional tax cuts added extra $858 billion to the national debt. During Obama’s two terms in office, Congress increased the national deficit by 74% and added $8.6 trillion to the national debt.
Donald Trump
Congress approved the Tax Cuts and Jobs Act in 2017, slashing corporate and personal income tax rates, during his single term. The cuts, which were seen as a bonanza for the wealthiest Americans and corporations at the time of their passage, were expected by the Congressional Budget Office to increase the government deficit by $1.9 trillion at the time of their passing.
The federal deficit climbed from $665 billion in 2017 to $3.13 trillion in 2020, despite the Treasury Secretary’s prediction that the tax cuts would reduce it. Some of the rise was due to tax cuts, but the majority of the increase was due to successive Covid relief programs.
The public’s share of the federal debt has risen from $14.6 trillion in 2017 to more than $21 trillion in 2020. The national debt is made up of public debt and intragovernmental debt (amounts owed to federal retirement trust funds such as the Social Security Trust Fund). It refers to the amount of money owed by the United States to external debtors such as American banks and investors, corporations, people, state and municipal governments, the Federal Reserve, and foreign governments and international investors such as Japan and China. The money is borrowed in order to keep the United States running. Treasury banknotes, notes, and bonds are included. Treasury Inflation-Protected Securities (TIPS), US savings bonds, and state and local government series securities are among the other holders of public debt.
“The national debt is growing at a rate it hasn’t seen in decades,” says James Cassel, chairman and co-founder of Cassel Salpeter, an investment bank. “This is the outcome of the basic principle of spending more money than you earn.” Cassel also points out that while both major political parties have spoken seriously about reducing the national debt at times, discussions and strategies have stopped.
When both sides pose discussing raising the debt ceiling each year, the national debt is more typically utilized as a bargaining chip. The United States would default on its debt obligations if the debt ceiling was not raised. As a result, Congress always votes to raise the debt ceiling (the maximum amount of money the US government may borrow), but only after parties have reached an agreement on other legislation.