Increases in private inventory investment, PCE, state and local government expenditure, and nonresidential fixed investment offset reductions in exports, residential fixed investment, and federal government spending in the third quarter, resulting in a rise in real GDP. Imports have risen (table 2).
Private inventory investment increased as wholesale trade (driven by nondurable goods industries) and retail trade both grew (led by motor vehicles and parts dealers). The rise in PCE was due to a rise in services, which was somewhat offset by a drop in products. Increases were seen across the board, with “other” services (mostly overseas travel) and transportation services contributing the most. The decline in products was mostly due to lower spending on automobiles and parts. Employee remuneration drove the increase in state and local government spending (notably, education). The increase in nonresidential fixed investment was partly offset by declines in equipment and structures due to an increase in intellectual property products (headed by software and research and development).
The drop in residential fixed investment was mostly due to lower spending on upgrades and new single-family homes. After the processing and management of Paycheck Protection Program loan applications by banks on behalf of the federal government concluded in the second quarter, the fall in federal government spending was mostly due to a decrease in nondefense spending on intermediate goods and services. The drop in exports was due to a drop in both products and services. The rise in imports was mostly due to a rise in services (led by travel and transport).
A decrease in PCE more than compensated for the drop in real GDP in the third quarter. Between the second and third quarters, consumer spending on goods (dominated by automobiles and parts) and services slowed (led by food services and accommodations).
In the third quarter, current dollar GDP climbed 8.4% on an annual basis, or $461.3 billion, to $23.20 trillion. GDP climbed by 13.4%, or $702.8 billion, in the second quarter (table 1 and table 3). The “Key Underlying Data and Assumptions” file on BEA’s website has more detail on the source data that underpins the estimates.
In the third quarter, the price index for gross domestic purchases grew 5.6 percent, compared to 5.8 percent in the second quarter (table 4). The PCE price index climbed by 5.3 percent, compared to a 6.5 percent increase in the previous quarter. The PCE price index climbed 4.6 percent excluding food and energy expenses, compared to 6.1 percent overall.
Gross Domestic Income and Corporate Profits
The third quarter had a 5.8% increase in real gross domestic income (GDI), compared to a 4.3 percent gain in the second quarter. In the third quarter, the average of real GDP and real GDI, a supplemental measure of US economic activity that equally weights GDP and GDI, climbed 4.1 percent, compared to a 5.5 percent gain in the second quarter (table 1).
In the third quarter, profits from current production (business profits adjusted for inventory valuation and capital consumption) climbed by $96.9 billion, compared to $267.8 billion in the second quarter (table 10).
Domestic financial businesses’ profits grew $14.2 billion in the third quarter, compared to $52.8 billion in the previous quarter. Domestic nonfinancial firms saw a $31.6 billion gain in profits, compared to a $221.3 billion increase in financial corporations. Profits in the rest of the world grew $51.1 billion, compared to a $6.2 billion fall in the United States. Receipts grew $65.2 billion in the third quarter, while payments increased $14.1 billion.
Updates to GDP
Real GDP climbed 2.3 percent in the third estimate, which was 0.2 percentage point higher than the second estimate. Downward revisions to exports and federal government spending partially offset upward revisions to PCE (specifically, an upward revision to services), private inventory investment (both farm and nonfarm), residential fixed investment, state and local government spending, and nonresidential fixed investment. Imports have been reduced. Refer to the Technical Note and the “Additional Information” section below for more information.
What is the latest GDP forecast for the year 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.
GDP for 2021
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).
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 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 was the percentage rise in real GDP in the third quarter of 2021?
The real U.S. GDP climbed by 2.1 percent in the third quarter of 2021 after the economic effects of the coronavirus (COVID-19) epidemic. When compared to the 33.8 percent growth in the third quarter of 2020, when the world was beginning to recover from COVID-19, this is a more normal increase.
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30th of August, 2021 Despite an increase in growth in the second quarter of 2021, to 1.6 percent from 0.6 percent the previous quarter, the OECD area’s GDP remains below pre-pandemic levels, according to provisional data.
GDP growth in the Major Seven economies as a whole improved to 1.6 percent (from 0.4 percent) in the second quarter of 2021, however there were significant differences between countries.
The biggest rise was in the United Kingdom (4.8 percent, up from 1.6 percent in the previous quarter), followed by Italy (2.7 percent from 0.2 percent in the previous quarter). The GDP of the other Major Seven Economies increased as well, but to a lesser level. GDP increased by 1.6 percent in both the United States and Germany, compared to 1.5 percent and minus 2.0 percent in the preceding quarter. Following 0.0 percent and minus 0.9 percent growth in the preceding quarter, GDP in France and Japan expanded by 0.9 percent and 0.3 percent, respectively. Canada’s growth rate was 0.6 percent in the second quarter, down from 1.4 percent the previous quarter, making it the only Major Seven country to experience a deceleration in growth.
After falls of (minus) 0.3 percent and (minus) 0.1 percent in the previous quarter, GDP growth in the euro area and the European Union turned positive in the second quarter of 2021, reaching 2.0 percent and 1.9 percent, respectively.
When comparing economic activity in the second quarter of 2021 to pre-pandemic levels (Q4-2019), GDP in the OECD region as a whole still lags behind (minus 0.7 percent ). The United Kingdom had the greatest disparity (minus 4.4%) among the Major Seven economies, followed by Italy (minus 3.8%), France, and Germany (both at minus 3.3 percent ). The United States is the only one of the Major Seven economies to have recovered to pre-pandemic levels in the second quarter of 2021, with GDP increasing by 0.8 percent.
Quarterly GDP, Total, Percentage Change, Previous Period, Quarterly, Last 8 Quarters (OECD Chart)
Quarterly National Accounts: Quarterly Growth Rates of Real GDP (Source: Quarterly National Accounts)
What is our current GDP?
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.
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).
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.
How long would it take for a 2.5 percent-growing economy to double in size?
For instance, if an economy grows at 1% per year, it will take 70 / 1 = 70 years for the economy to double in size. If a country’s economy grows at 2% each year, it will take 70 / 2 = 35 years for it to double in size.
Is a higher or lower GDP preferable?
- The gross domestic product (GDP) is the total monetary worth of all products and services exchanged in a given economy.
- GDP growth signifies economic strength, whereas GDP decline indicates economic weakness.
- When GDP is derived through economic devastation, such as a car accident or a natural disaster, rather than truly productive activity, it can provide misleading information.
- By integrating more variables in the calculation, the Genuine Progress Indicator aims to enhance GDP.
What is the state of the US economy in 2021?
Indeed, the year is starting with little signs of progress, as the late-year spread of omicron, along with the fading tailwind of fiscal stimulus, has experts across Wall Street lowering their GDP projections.
When you add in a Federal Reserve that has shifted from its most accommodative policy in history to hawkish inflation-fighters, the picture changes dramatically. The Atlanta Fed’s GDPNow indicator currently shows a 0.1 percent increase in first-quarter GDP.
“The economy is slowing and downshifting,” said Joseph LaVorgna, Natixis’ head economist for the Americas and former chief economist for President Donald Trump’s National Economic Council. “It isn’t a recession now, but it will be if the Fed becomes overly aggressive.”
GDP climbed by 6.9% in the fourth quarter of 2021, capping a year in which the total value of all goods and services produced in the United States increased by 5.7 percent on an annualized basis. That followed a 3.4 percent drop in 2020, the steepest but shortest recession in US history, caused by a pandemic.