The gross domestic product (GDP) is a quarterly economic measure that shows how much production a country produces. In the two months leading up to the release of the final number, the Bureau of Economic Analysis (BEA) in the United States produces two estimates of quarterly GDP, known as advance and preliminary estimates:
- The advance estimate of GDP is released in the first month after each quarter and is based on estimates of economic activity for a portion of the quarter (often two of the three months).
- The preliminary estimate is released the month after the advance estimate, and it accounts for modifications to economic data from the months used to produce the advance estimate, as well as new data.
We looked at the pattern of payroll employment data adjustments in a recent Economic Synopses essay. We discovered that the sign of the Bureau of Labor Statistics’ revision to payroll employment is more likely to be positive (revised up) during expansions and negative (revised down) during recessions. We suggested that this presented a problem for policymakers who relied on the timely publication of economic indicators to make proper policy decisions.
We wondered if the GDP releases had the same asymmetrythat is, if there was a systematic discrepancy between the final number and, say, the preliminary release. The difference between the final and preliminary releases is depicted in the graph below, with recessions highlighted in gray.
While there are no evident patterns, at the start of recessions, there are usually huge negative revisions from preliminary to final releases.
What is the reason for the disparity between the preliminary and final GDP estimates? The differences could be due to the time period they’re measuring or the methods they’re using to collect data.
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.
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.
Is GDP calculated quarterly?
Defined Gross Domestic Product (GDP) The sum is usually given in dollars, with the growth rate expressed as a percentage change from one period to the next (where the time period is typically quarterly or yearly). The Bureau of Economic Analysis of the United States publishes this number on a quarterly basis.
How can you figure out the rate of quarterly GDP growth?
Formula for calculating GDP growth rate
- Divide the annualized rate for the fourth quarter of 2021 ($19,806 trillion) by the annualized rate for the third quarter of 2021 ($19,478.9 trillion).
- By multiplying by 100 and rounding up to the next tenth of a percent, you get 6.9%.
In the first quarter of 2022, how much will real GDP grow?
According to 36 analysts polled by the Federal Reserve Bank of Philadelphia, the US economy for the current quarter looks weaker than it did in November. Forecasters expect real GDP to rise at a 1.8 percent annual rate in the first quarter of 2022, down 2.1 percentage points from the previous survey’s prediction of 3.9 percent. The panel predicts that real GDP will rise at a pace of 3.7 percent this year, 2.7 percent in 2023, and 2.3 percent in 2024, based on an annual-average over annual-average calculation. The annual projections haven’t changed much since they were released three months ago.
The prognosis for growth is accompanied by downward revisions to the unemployment rate projections. The unemployment rate is expected to drop from 3.9 percent this quarter to 3.4 percent in the first quarter of 2023, according to forecasts. The panelists expect that the unemployment rate will fall from 3.7 percent in 2022 to 3.4 percent in 2023, then rise slightly during the next two years, based on the annual-average computation. Annual average forecasts for 2022 to 2024 are 0.1 to 0.4 percentage points lower than in the previous survey.
Job growth predictions for the first two quarters of 2022 have been revised upward by forecasters. The annual-average level of nonfarm payroll employment is projected to grow at a monthly rate of 430,900 in 2022, which is slightly changed from the previous forecast. (The year-to-year change in the annual-average level of nonfarm payroll employment is converted to a monthly rate for these annual-average predictions.)
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.
Download the entire news release (PDF 120KB)
15th of March, 2022 – According to provisional estimates, GDP in the G20 region increased by 1.4 percent between the third and fourth quarters of 2021, down from the 1.9 percent gain seen between the second and third quarters.
The G20’s downturn in the fourth quarter of 2021 is primarily due to slowing growth in India1, where GDP increased by 1.8 percent quarter-on-quarter after surging by 13.7 percent in the third quarter (Q3). It also indicates weaker growth in the European Union (EU), where GDP increased by 0.4 percent in Q4 2021, compared to 2.2 percent in Q3. Germany, the EU’s largest economy, had its GDP decline by 0.3 percent in the fourth quarter, making it the first G20 country to do so. 2 GDP growth decreased in Saudi Arabia (to 1.6 percent in Q4, compared to 5.7 percent in Q3) and Turkey (to 1.6 percent in Q4, compared to 5.7 percent in Q3) (to 1.5 percent , compared with 2.8 percent ).
Despite the G20 region’s overall trend, many G20 countries experienced better growth in Q4 2021 than in Q3. Quarter-on-quarter GDP growth in the United States increased to 1.7 percent, up from 0.6 percent the previous quarter, and in China it increased to 1.6 percent, up from 0.7 percent. Indonesia’s GDP increased from a sluggish 0.1 percent in Q3 to a robust 3.9 percent in Q4, surpassing its pre-pandemic level for the first time (by 2.9 percent ). Australia’s GDP rebounded from a 1.9 percent dip in Q3, rising by 3.4 percent in Q4, while GDP in South Africa climbed by 1.2 percent in Q4 (from minus 1.7 percent in Q3) and 0.5 percent in Brazil (from minus 0.1 percent ). Mexico experienced no growth in the fourth quarter of 2021, following a contraction of 0.7 percent the previous quarter.
In terms of overall growth in 2021, preliminary estimates show that GDP in the G20 climbed by 6.1 percent, following a 3.2 percent drop in 2020 due to the COVID-19 pandemic. Turkey had the highest growth rate among G20 countries in 2021 (11.0 percent), followed by India (8.3 percent) and China (8.1 percent), and Japan had the lowest growth rate (1.6 percent ).
OECD Chart: Quarterly GDP, Total, Percentage Change, Previous Period, Q1 2020 or Latest Available OECD Chart: Quarterly GDP, Total, Percentage Change, Previous Period, Q1 2020 or Latest Available OECD Chart: Quarterly
What does GDP quarterly imply?
The standard measure of the value added created by the production of goods and services in a country during a certain period is the gross domestic product (GDP). As a result, it also accounts for the revenue generated by that production, as well as the overall amount spent on final goods and services (less imports). While GDP is the most significant indicator for capturing economic activity, it falls short of providing an adequate assessment of people’s material well-being, for which other metrics may be more appropriate. This metric is based on real GDP (also known as GDP at constant prices or GDP in volume), which adjusts for price fluctuations over time. Seasonal factors are also taken into account. The indicator comes in three forms: percentage change from the previous quarter, percentage change from the same quarter the previous year, and volume index (2015=100). All OECD nations use the 2008 System of National Accounts to collect their data (SNA).