Real gross domestic product increased at an annual rate of 4.1 percent in the second quarter of 2018, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2 percent (revised).
The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the second quarter, based on more complete data, will be released on Aug. 29, 2018.
The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
Comprehensive Update of the National Income and Product Accounts
The estimates released today also reflect the results of the 15th comprehensive update of the National Income and Product Accounts (NIPAs). The updated estimates reflect previously announced improvements, and include the introduction of new not seasonally adjusted estimates for GDP, GDI, and their major components.
The acceleration in real GDP growth in the second quarter reflected accelerations in PCE and in exports, a smaller decrease in residential fixed investment, and accelerations in federal government spending and in state and local spending. These movements were partly offset by a downturn in private inventory investment and a deceleration in nonresidential fixed investment. Imports decelerated.
Current-dollar GDP increased 7.4 percent, or $361.5 billion, in the second quarter to a level of $20.4Â trillion. In the first quarter, current-dollar GDP increased 4.3 percent, or $209.2 billion.
The price index for gross domestic purchases increased 2.3 percent in the second quarter, compared with an increase of 2.5 percent in the first quarter. The PCE price index increased 1.8 percent, compared with an increase of 2.5 percent. Excluding food and energy prices, the PCE price index increased 2.0 percent, compared with an increase of 2.2 percent.
Personal Income
Current-dollar personal income increased $183.7 billion in the second quarter, compared with an increase of $215.8 billion in the first quarter. Decelerations in wages and salaries, government social benefits, personal interest income, and nonfarm proprietors’ income were partly offset by accelerations in personal dividend income and rental income, a deceleration in contributions for government social insurance (a subtraction in the calculation of personal income), and an upturn in farm proprietors’ income.
Disposable personal income increased $167.5 billion, or 4.5 percent, in the second quarter, compared with an increase of $256.7 billion, or 7.0 percent, in the first quarter. Real disposable personal income increased 2.6 percent, compared with an increase of 4.4 percent.
Personal saving was $1,051.1 billion in the second quarter, compared with $1094.1 billion in the first quarter. The personal saving rate — personal saving as a percentage of disposable personal income — was 6.8 percent in the second quarter, compared with 7.2 percent in the first quarter.
Source Data for the Advance Estimate
Information on the source data and the key assumptions used for unavailable source data in the advance estimate is provided in a Technical Note that is posted with the news release on BEA’s Web site. A detailed “Key Source Data and Assumptions” file is also posted for each release. For information on updates to GDP, see the “Additional Information” section that follows.
Comprehensive Update of the National Income and Product Accounts
Comprehensive updates of the National Income and Product Accounts (NIPAs), which are carried out about every five years, are an important part of BEA’s regular process for improving and modernizing its accounts to keep pace with the ever-changing U.S. economy. Updates incorporate newly available and more comprehensive source data, as well as improved estimation methodologies. The timespan for this year’s comprehensive update is 1929 through the first quarter 2018.
With today’s release of these updated statistics, most NIPA tables are available on BEA’s Web site (www.bea.gov). A complete schedule of the table release plan is also available on BEA’s Web site. An article describing the results will be published in the September 2018 issue of BEA’s monthly journal, the Survey of Current Business.
Updates for the first quarter of 2018
For the first quarter of 2018, real GDP is now estimated to have increased 2.2 percent; in the previously published estimates, first-quarter GDP was estimated to have increased 2.0 percent. The 0.2-percentage point upward revision to the percent change in first-quarter real GDP primarily reflected upward revisions to private inventory investment, nonresidential fixed investment, and federal government spending that were partly offset by downward revisions to PCE and residential fixed investment. Imports were revised down.
Real GDI is now estimated to have increased 3.9 percent in the first quarter; in the previously published estimates, first-quarter GDI was estimated to have increased 3.6 percent.
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