US real GDP decreased at an annual rate of 1.6% in Q1, down from a prior estimate of a 1.5% decline; downward revision to personal consumption expenditures was partly offset by upward revision to private inventory investment: Dept. of Commerce

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WASHINGTON , June 29, 2022 (press release) –

Real gross domestic product (GDP) decreased at an annual rate of 1.6 percent in the first quarter of 2022, according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2021, real GDP increased 6.9 percent.

The "third" estimate of GDP released today is based on more complete source data than were available for the "second" estimate issued last month.  In the second estimate, the decrease in real GDP was 1.5 percent. The update primarily reflects a downward revision to personal consumption expenditures (PCE) that was partly offset by an upward revision to private inventory investment (refer to "Updates to GDP").

The decrease in real GDP reflected decreases in exports, federal government spending, private inventory investment, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased. Nonresidential fixed investment, PCE, and residential fixed investment increased (table 2).

COVID-19 Impact on the First-Quarter 2022 GDP Estimate
In the first quarter, an increase in COVID-19 cases related to the Omicron variant resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country. Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased as provisions of several federal programs expired or tapered off. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter because the impacts are generally embedded in source data and cannot be separately identified. For more information, refer to the Technical Note and Federal Recovery Programs and BEA Statistics.
The decrease in exports reflected widespread decreases in nondurable goods. The decrease in federal government spending primarily reflected a decrease in defense spending on intermediate goods and services. The decrease in private inventory investment was led by decreases in wholesale trade (mainly motor vehicles) as well as mining, utilities, and construction (notably, utilities). The increase in imports was led by an increase in goods (notably, nonfood and nonautomotive consumer goods).

The increase in nonresidential fixed investment reflected increases in equipment and intellectual property products. The increase in PCE reflected an increase in spending on services (led by housing and utilities and "other" services) that was partly offset by a decrease in spending on goods. Within goods, widespread decreases in nondurable goods (led by groceries as well as gasoline and other energy goods) were largely offset by an increase in durable goods (led by motor vehicles and parts).

Current‑dollar GDP increased 6.6 percent (revised) at an annual rate, or $383.9 billion, in the first quarter to a level of $24.39 trillion. In the fourth quarter, GDP increased 14.5 percent, or $800.5 billion (table 1 and table 3). More information on the source data that underlie the estimates is available in the "Key Source Data and Assumptions" file on BEA's website.

The price index for gross domestic purchases increased 8.0 percent (revised) in the first quarter, compared with an increase of 7.0 percent in the fourth quarter (table 4). The PCE price index increased 7.1 percent (revised), compared with an increase of 6.4 percent. Excluding food and energy prices, the PCE price index increased 5.2 percent (revised), compared with an increase of 5.0 percent.

Personal Income
Current-dollar personal income increased $247.2 billion (revised) in the first quarter to a level of $21.26 trillion. In the fourth quarter, personal income increased $186.2 billion. The increase primarily reflected an increase in compensation that was partly offset by a decrease in government social benefits (table 8). In the first quarter, government assistance payments in the form of social benefits to households decreased as provisions of several federal programs expired or continued to taper off.

Disposable personal income decreased $58.8 billion (revised), or 1.3 percent, in the first quarter, in contrast to an increase of $72.4 billion, or 1.6 percent, in the fourth quarter. Real disposable personal income decreased 7.8 percent (revised), compared with a decrease of 4.5 percent. Personal saving was $1.02 trillion in the first quarter (revised), compared with $1.45 trillion in the fourth quarter. The personal saving rate—personal saving as a percentage of disposable personal income—was 5.6 percent (revised) in the first quarter, compared with 7.9 percent in the fourth quarter.

Gross Domestic Income and Corporate Profits
Real gross domestic income (GDI) increased 1.8 percent (revised) in the first quarter, compared with an increase of 6.3 percent in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 0.1 percent (revised) in the first quarter, compared with an increase of 6.6 percent in the fourth quarter (table 1).

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $63.8 billion (revised) in the first quarter, in contrast to an increase of $20.4 billion in the fourth quarter (table 10).

Profits of domestic financial corporations decreased $51.1 billion (revised) in the first quarter, compared with a decrease of $1.3 billion in the fourth quarter. Profits of domestic nonfinancial corporations decreased $4.8 billion (revised), in contrast to an increase of $5.0 billion. Rest-of-the-world profits decreased $7.9 billion (revised), in contrast to an increase of $16.8 billion. In the first quarter, receipts increased $17.7 billion, and payments increased $25.6 billion.

Updates to GDP
The decrease in first-quarter real GDP was revised down 0.1 percentage point from the second estimate, reflecting downward revisions to PCE and federal government spending that were mostly offset by upward revisions to private inventory investment, nonresidential fixed investment, exports, state and local government spending, and residential fixed investment. Imports were revised up. For more information, refer to the Technical Note. For information on updates to GDP, refer to the "Additional Information" section that follows.

  Advance Estimate Second Estimate Third Estimate
  (Percent change from preceding quarter)
Real GDP -1.4 -1.5 -1.6
Current-dollar GDP 6.5 6.5 6.6
Real GDI 2.1 1.8
Average of Real GDP and Real GDI 0.3 0.1
Gross domestic purchases price index 7.8 8.0 8.0
PCE price index 7.0 7.0 7.1
PCE price index excluding food and energy 5.2 5.1 5.2

 

Real GDP by Industry
Today's release includes estimates of GDP by industry, or value added—a measure of an industry's contribution to GDP. In the first quarter, private goods-producing industries decreased 6.9 percent, private services-producing industries decreased 0.8 percent, and government increased 2.0 percent (table 12). Overall, 9 of 22 industry groups contributed to the first-quarter decline in real GDP.

  • Within private goods-producing industries, the leading contributors to the decrease were nondurable goods manufacturing (led by petroleum and coal products) and mining (table 13).
  • Within private services-producing industries, the leading contributors to the decrease were retail trade and finance and insurance. These were partly offset by an increase in real estate and rental and leasing.
  • The increase in government reflected an increase in state and local government that was partly offset by a decrease in federal government.

Gross Output by Industry
Real gross output—principally a measure of an industry's sales or receipts, which includes sales to final users in the economy (GDP) and sales to other industries (intermediate inputs)—increased 2.0 percent in the first quarter. Private services-producing industries increased 3.3 percent, private goods-producing industries decreased 0.7, and government increased less than 0.1 percent (table 16). Overall, 15 of 22 industry groups contributed to the increase in real gross output.

Annual Update of the National Economic Accounts
BEA will release results from the 2022 annual update of the National Economic Accounts, which includes the National Income and Product Accounts as well as the Industry Economic Accounts, on September 29, 2022. This update will present revised statistics for GDP, GDP by Industry, and gross domestic income that cover the first quarter of 2017 through the first quarter of 2022. For details, refer to Information on Updates to the National Economic Accounts.

Next release, July 28, 2022, at 8:30 A.M. EDT
Gross Domestic Product, Second Quarter 2022 (Advance Estimate)

 

 

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