U.S. real gross domestic product (GDP) decreased at an annual rate of 0.6% in the 2Q 2022, according to the "second" estimate released by the Bureau of Economic Analysis. In the 1Q, real GDP decreased 1.6%.
The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the decrease in real GDP was 0.9%. 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.
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.
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 1Q, decreasing 0.6% after decreasing 1.6%. 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% at an annual rate, or $496.2 billion, in the 2Q to a level of $24.88 trillion, an upward revision of $31.1 billion from the previous estimate.
The price index for gross domestic purchases increased 8.4% in the 2Q, an upward revision of 0.2 percentage point from the previous estimate. The personal consumption expenditures (PCE) price index increased 7.1%, the same as previously estimated. Excluding food and energy prices, the PCE price index increased 4.4%, also unrevised.
Gross Domestic Income and Corporate Profits
Real gross domestic income (GDI) increased 1.4% in the 2Q, compared with an increase of 1.8% in the 1Q. 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% in the 2Q, compared with an increase of 0.1% in the 1Q.
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $175.2 billion in the 2Q, in contrast to a decrease of $63.8 billion in the 1Q.
Profits of domestic financial corporations decreased $24.2 billion in the 2Q, compared with a decrease of $51.1 billion in the 1Q. 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 2Q, receipts increased $51.1 billion, and payments increased $25.5 billion.
