Real gross domestic product (GDP) decreased at an annual rate of 0.6 percent in the second quarter of 2022 (table 1), according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 1.6 percent.
The GDP estimate released today is based on more complete source data than was available for the “advance” estimate issued last month. In the advance estimate, the decrease in real GDP was 0.9 percent. The update primarily reflects upward revisions to consumer spending and private inventory investment that were partly offset by a downward revision to residential fixed investment (refer to “Updates to GDP”).
The decrease in real GDP reflected decreases in private inventory investment, residential fixed investment, federal government spending, and state and local government spending, that were partly offset by increases in exports and consumer spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2).
The decrease in private inventory investment was led by a decrease in retail trade (mainly “other” general merchandise stores). The decrease in residential fixed investment was led by a decrease in “other” structures (specifically real estate brokers’ commissions). The decrease in federal government spending reflected a decrease in nondefense spending that was partly offset by an increase in defense spending. The decrease in nondefense spending reflected the sale of crude oil from the Strategic Petroleum Reserve, which results in a corresponding decrease in consumption expenditures. Because the oil sold by the government enters private inventories, there is no direct net effect on GDP. The decrease in state and local government spending was led by a decrease in investment in structures. The increase in imports reflected an increase in services (led by travel).
The increase in exports reflected increases in both goods (led by industrial supplies and materials) and services (led by travel). The increase in consumer spending reflected an increase in services (led by food services and accommodations as well as “other” services) that was partly offset by a decrease in goods (led by food and beverages).
Real GDP decreased less in the second quarter than in the first quarter, decreasing 0.6 percent after decreasing 1.6 percent. The smaller decrease reflected an upturn in exports and a smaller decrease in federal government spending that were partly offset by a larger decline in private inventory investment, a slowdown in consumer spending, and downturns in nonresidential fixed investment and residential fixed investment. Imports decelerated.
Current‑dollar GDP increased 8.4 percent at an annual rate, or $496.2 billion, in the second quarter to a level of $24.88 trillion (tables 1 and 3), an upward revision of $31.1 billion from the previous estimate. 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 8.4 percent in the second quarter (table 4), an upward revision of 0.2 percentage point from the previous estimate. The personal consumption expenditures (PCE) price index increased 7.1 percent, the same as previously estimated. Excluding food and energy prices, the PCE price index increased 4.4 percent, also unrevised.
Current-dollar personal income increased $353.1 billion in the second quarter, a downward revision of $0.7 billion from the previous estimate. The increase primarily reflected increases in compensation (led by private wages and salaries), proprietors’ income (both nonfarm and farm), personal income receipts on assets, and rental income of persons (table 8).
Disposable personal income increased $287.0 billion, or 6.5 percent, in the second quarter, a downward revision of $4.4 billion from the previous estimate. Real disposable personal income decreased 0.6 percent, a downward revision of 0.1 percentage point.
Personal saving was $945.0 billion in the second quarter, a downward revision of $23.4 billion from the previous estimate. The personal saving rate—personal saving as a percentage of disposable personal income—was 5.1 percent in the second quarter, a downward revision of 0.1 percentage point.
Gross Domestic Income and Corporate Profits
Real gross domestic income (GDI) increased 1.4 percent in the second quarter, compared with an increase of 1.8 percent in the first quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 0.4 percent in the second quarter, compared with an increase of 0.1 percent in the first quarter (table 1).
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $175.2 billion in the second quarter, in contrast to a decrease of $63.8 billion in the first quarter (table 10).
Profits of domestic financial corporations decreased $24.2 billion in the second quarter, compared with a decrease of $51.1 billion in the first quarter. Profits of domestic nonfinancial corporations increased $173.9 billion, in contrast to a decrease of $4.8 billion. Rest-of-the-world profits increased $25.5 billion, in contrast to a decrease of $7.9 billion. In the second quarter, receipts increased $51.1 billion, and payments increased $25.5 billion.
Updates to GDP
The decrease in second-quarter real GDP was revised up 0.3 percentage point from the “advance” estimate, primarily reflecting upward revisions to consumer spending, private inventory investment, and state and local government spending that were partly offset by downward revisions to residential fixed investment, federal government spending, and exports. Imports were revised down. 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|
|(Percent change from preceding quarter)|
|Average of Real GDP and Real GDI||…||0.4|
|Gross domestic purchases price index||8.2||8.4|
|PCE price index||7.1||7.1|
|PCE price index excluding food and energy||4.4||4.4|
First-Quarter Wages and Salaries
BEA’s standard practice for first-quarter estimates of wages and salaries is to incorporate data from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) program with the publication of the annual update. For the first quarter of 2022, new QCEW data will be incorporated into next month’s release of the 2022 Annual Update of the National Economic Accounts (refer to box below for details).
Click here for more Kentucky business news.