GDP and the Economy
Second Estimates for the Second Quarter of 2019PDF
Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the second quarter of 2019, according to the second estimates of the National Income and Product Accounts (NIPAs) (chart 1 and table 1).1 With the second estimate, real GDP growth for the second quarter was revised down 0.1 percentage point from the advance estimate issued last month (see “Updates”). In the first quarter of 2019, real GDP increased 3.1 percent.
The increase in real GDP in the second quarter reflected positive contributions from consumer spending, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment, exports, residential fixed investment, and nonresidential fixed investment.2 Imports, which are a subtraction in the calculation of GDP, increased (chart 2 and table 1).
The deceleration in real GDP in the second quarter primarily reflected downturns in inventory investment (line 14), exports (line 16), and nonresidential fixed investment (line 9). These downturns were partly offset by accelerations in consumer spending (line 2) and federal government spending (line 23).
- The downturn in private inventory investment primarily reflected a downturn in nondurable-goods manufacturing and larger decreases in wholesale and retail trade.
- The downturn in exports reflected downturns in both goods and services.
- Within goods (line 17), a larger decrease in nonautomotive capital goods and downturns in automotive vehicles, engines, and parts and in consumer goods except food and automotive were partly offset by an upturn in exports of petroleum and products.
- Within services (line 18), travel was the largest contributor to the downturn.
- The downturn in nonresidential fixed investment reflected a downturn in structures (line 10) and a deceleration in intellectual property products (IPP) (line 12). Within IPP, research and development and software investment slowed.
- The acceleration in consumer spending reflected accelerations in spending on both goods and services.
- The acceleration in spending on goods (line 3) primarily reflected upturns in spending on motor vehicles and parts, in food purchased for off-premises consumption, and in clothing and footwear.
- Within services (line 6), upturns in food services and accommodations and recreation services and accelerations in housing and utilities and other services were partly offset by a deceleration in health care services.
- The acceleration in federal government spending was more than accounted for by nondefense spending (line 25). Within nondefense, compensation of general government employees and intermediate goods and services purchased both turned up. These components were impacted by the partial government shutdown that occurred in the fourth quarter of 2018 and the first quarter of 2019. For more information, see “How will the federal government shutdown be reflected in GDP for the fourth quarter of 2018 and the first quarter of 2019?”
Real gross domestic income (GDI) (line 27) increased 2.1 percent in the first quarter after increasing 3.2 percent in the first quarter.
|Line||Share of current-dollar GDP (percent)||Change from preceding period (percent)||Contribution to percent change in real GDP (percentage points)|
|1||Gross domestic product (GDP)1||100.0||2.9||1.1||3.1||2.0||2.9||1.1||3.1||2.0|
|2||Personal consumption expenditures||68.0||3.5||1.4||1.1||4.7||2.34||0.97||0.78||3.10|
|7||Gross private domestic investment||17.6||13.7||3.0||6.2||−6.1||2.27||0.53||1.09||−1.11|
|12||Intellectual property products||4.7||4.1||11.7||10.8||3.7||0.18||0.51||0.48||0.17|
|14||Change in private inventories||0.3||......||......||......||......||2.14||0.07||0.53||−0.91|
|15||Net exports of goods and services||−3.1||......||......||......||......||−2.05||−0.35||0.73||−0.72|
|22||Government consumption expenditures and gross investment||17.5||2.1||−0.4||2.9||4.5||0.36||−0.07||0.50||0.77|
|26||State and local||10.9||1.6||−1.2||3.3||2.3||0.17||−0.14||0.36||0.25|
|27||Gross domestic income (GDI)2||......||3.3||0.8||3.2||2.1||......||......||......||......|
|28||Average of GDP and GDI||......||3.1||0.9||3.2||2.1||......||......||......||......|
|29||Final sales of domestic product||99.7||0.8||1.0||2.6||3.0||0.78||1.02||2.57||2.95|
|33||Motor vehicle output||2.7||10.3||1.3||−7.6||−8.3||0.28||0.04||−0.22||−0.24|
|34||GDP excluding motor vehicle output||97.3||2.7||1.1||3.4||2.3||2.65||1.05||3.32||2.27|
- The GDP estimates under the contribution columns are also percent changes.
- GDI is deflated by the implicit price deflator for GDP. The first-quarter 2019 change in GDI reflects the incorporation of newly-available wage and salary estimates.
Prices for gross domestic purchases, goods and services purchased by U.S. residents, increased 2.2 percent in the second quarter after increasing 0.8 percent in the first quarter (chart 3 and table 2, line 1). The acceleration primarily reflected an upturn in prices paid for consumer goods (notably gasoline and other energy goods) and an acceleration in prices paid for state and local government spending (notably petroleum products). Food prices decelerated (line 20), increasing 0.7 percent after increasing 3.0 percent. Energy goods and services prices turned up (line 21), increasing 18.6 percent after decreasing 16.7 percent. Gross domestic purchases prices excluding food and energy (line 22) accelerated, increasing 1.8 percent in the second quarter after increasing 1.2 percent in the first quarter.
Consumer prices excluding food and energy (line 25), a measure of the “core” rate of inflation, accelerated, increasing 1.7 percent in the second quarter after increasing 1.1 percent in the first quarter.
|Line||Change from preceding period (percent)||Contribution to percent change in gross domestic purchases prices (percentage points)|
|1||Gross domestic purchases1||1.9||1.5||0.8||2.2||1.9||1.5||0.8||2.2|
|2||Personal consumption expenditures||1.6||1.3||0.4||2.3||1.05||0.88||0.26||1.50|
|7||Gross private domestic investment||2.1||0.7||1.7||2.0||0.36||0.12||0.30||0.34|
|12||Intellectual property products||0.5||−2.2||1.5||2.9||0.02||−0.10||0.07||0.13|
|14||Change in private inventories||......||......||......||......||0.01||0.03||0.00||0.02|
|15||Government consumption expenditures and gross investment||3.0||2.9||1.3||1.8||0.51||0.48||0.22||0.31|
|19||State and local||3.3||2.9||−0.6||4.1||0.35||0.30||−0.06||0.43|
|Gross domestic purchases:|
|21||Energy goods and services||3.5||−4.9||−16.7||18.6||0.10||−0.13||−0.49||0.46|
|22||Excluding food and energy||2.0||1.7||1.2||1.8||1.80||1.59||1.14||1.66|
|Personal consumption expenditures:|
|23||Food and beverages purchased for off-premises consumption||0.4||0.2||3.0||0.6||......||......||......||......|
|24||Energy goods and services||3.9||−5.2||−16.7||18.4||......||......||......||......|
|25||Excluding food and energy||1.6||1.7||1.1||1.7||......||......||......||......|
|26||Gross domestic product||2.0||1.6||1.1||2.4||......||......||......||......|
|27||Exports of goods and services||1.1||−1.4||−2.5||3.2||......||......||......||......|
|28||Imports of goods and services||0.6||−1.8||−3.5||1.5||......||......||......||......|
- The estimates for gross domestic purchases under the contribution columns are also percent changes.
Personal income (table 3, line 1), which is measured in current dollars, increased $245.4 billion in the second quarter after increasing $272.6 billion in the first quarter (revised). The deceleration reflected decelerations in compensation (line 2) and in personal current transfer receipts (line 19) that were partly offset by an upturn in personal income receipts on assets (line 16) and a deceleration in contributions for government social insurance (line 28).
- Personal current taxes (line 29) increased $53.5 billion in the second quarter after increasing $79.5 billion in the first quarter.
- Disposable personal income (DPI) (line 30) increased $191.9 billion in the second quarter after increasing $193.1 billion in the first quarter.
- The personal saving rate (line 33 and chart 4)—personal saving as a percentage of DPI—was 8.0 percent in the second quarter; in the first quarter, the personal saving rate was 8.5 percent.
- Real DPI (line 35 and chart 5) increased 2.5 percent in the second quarter after increasing 4.5 percent in the first quarter. Current-dollar DPI (line 34) increased 4.8 percent after increasing 4.9 percent. The differences in the movements in real DPI and current-dollar DPI reflected an acceleration in the implicit price deflator for consumer spending, which is used to deflate DPI.
With the release of the second estimate of GDP, the Bureau of Economic Analysis also released revised estimates of first-quarter wages and salaries, personal taxes, and contributions for social insurance. These estimates reflect new wage and salary tabulations for the first quarter from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. As a result:
- Wages and salaries (line 3) is now estimated to have increased $221.5 billion in the first quarter, an upward revision of $3.0 billion.
- Personal income (line 1) is now estimated to have increased $272.6 billion, an upward revision of $2.8 billion.
- Real DPI is now estimated to have increased 4.5 percent (line 35) in the first quarter; in the previously published estimate, real DPI increased 4.4 percent.
- The personal saving rate (line 33) is now estimated at 8.5 percent, the same as in the previously published estimate.
- The percent change in real GDI (table 1, line 27) is now estimated at 3.2 percent, the same as in the previously published estimate.
|Line||Level||Change from preceding period|
|2||Compensation of employees||11,306.6||11,436.1||118.1||63.1||249.2||129.5|
|3||Wages and salaries||9,211.5||9,319.6||97.2||47.8||221.5||108.1|
|8||Trade, transportation, and utilities||1,403.5||1,408.3||9.5||6.8||30.4||4.8|
|9||Other services-producing industries||4,850.7||4,920.1||51.2||19.8||145.0||69.4|
|11||Supplements to wages and salaries||2,095.1||2,116.5||20.9||15.3||27.7||21.4|
|12||Proprietors' income with IVA and CCAdj||1,621.2||1,632.7||16.7||34.4||−3.2||11.5|
|15||Rental income of persons with CCAdj||767.0||778.6||11.2||−1.1||2.9||11.5|
|16||Personal income receipts on assets||2,955.1||3,016.2||48.4||44.3||−46.8||61.1|
|17||Personal interest income||1,699.3||1,750.8||24.7||8.0||−27.9||51.5|
|18||Personal dividend income||1,255.8||1,265.4||23.7||36.4||−19.0||9.6|
|19||Personal current transfer receipts||3,113.1||3,159.7||20.7||19.9||109.4||46.5|
|20||Government social benefits to persons||3,058.7||3,105.2||19.4||19.5||109.7||46.5|
|27||Other current transfer receipts, from business (net)||54.4||54.4||1.4||0.4||−0.3||0.0|
|28||Less: Contributions for government social insurance||1,407.6||1,422.4||11.5||6.3||38.9||14.8|
|29||Less: Personal current taxes||2,156.9||2,210.4||14.8||−9.1||79.5||53.5|
|30||Equals: Disposable personal income (DPI)||16,198.5||16,390.4||188.8||163.4||193.1||191.9|
|31||Less: Personal outlays||14,823.0||15,074.2||189.8||102.2||65.2||251.2|
|32||Equals: Personal saving||1,375.5||1,316.2||−1.0||61.2||127.9||−59.3|
|33||Personal saving as a percentage of DPI||8.5||8.0||......||......||......||......|
|Percent change at annual rate|
|35||Real DPI, chained (2012) dollars||......||......||3.3||2.8||4.5||2.5|
- Capital consumption adjustment
- Inventory valuation adjustment
Real GDP increased 2.0 percent in the second quarter of 2019, a downward revision of 0.1 percentage point from the advance estimate (table 4, line 1). The revision primarily reflected downward revisions to state and local government spending (line 26), exports (line 16), inventory investment (line 14), and residential investment (line 13) that were partly offset by an upward revision to consumer spending (line 2).
- The downward revision to state and local government spending reflected a downward revision to gross investment in structures (notably highways and streets).
- The downward revision to exports was in both goods (notably petroleum and products) and in services (notably travel).
- The downward revision to inventory investment primarily reflected downward revisions to manufacturing and retail industries that were partly offset by an upward revision to other industries (notably information).
- The downward revision to residential investment was primarily in single-family housing.
- The upward revision to consumer spending reflected upward revisions to goods (largely nondurable goods) and to services (the largest contributor was household consumption of health care).
|Line||Change from preceding period (percent)||Contribution to percent change in real GDP (percentage points)|
|Advance estimate||Second estimate||Second estimate minus advance estimate||Advance estimate||Second estimate||Second estimate minus advance estimate|
|1||Gross domestic product (GDP)1||2.1||2.0||−0.1||2.1||2.0||−0.1|
|2||Personal consumption expenditures||4.3||4.7||0.4||2.85||3.10||0.25|
|7||Gross private domestic investment||−5.5||−6.1||−0.6||−1.00||−1.11||−0.11|
|12||Intellectual property products||4.7||3.7||−1.0||0.22||0.17||−0.05|
|14||Change in private inventories||......||......||......||−0.86||−0.91||−0.05|
|15||Net exports of goods and services||......||......||......||−0.65||−0.72||−0.07|
|22||Government consumption expenditures and gross investment||5.0||4.5||−0.5||0.85||0.77||−0.08|
|26||State and local||3.2||2.3||−0.9||0.35||0.25||−0.10|
|27||Final sales of domestic product||3.0||3.0||0.0||2.92||2.95||0.03|
|28||Gross domestic purchases price index||2.2||2.2||0.0||......||......||......|
|29||GDP price index||2.4||2.4||0.0||......||......||......|
- The GDP estimates under the contribution columns are also percent changes.
Measured in current dollars, profits from current production (corporate profits with the inventory valuation adjustment (IVA) and the capital consumption adjustment (CCAdj)) increased $105.8 billion, or 5.3 percent at a quarterly rate, in the second quarter after decreasing $78.7 billion, or 3.8 percent, in the first quarter (table 5, line 2). Profits of domestic financial corporations increased $4.0 billion (line 4), profits of domestic nonfinancial corporations increased $43.5 billion (line 5), and rest-of-the-world profits increased $58.3 billion (line 6).
Profits after tax (without the IVA and the CCAdj) increased $86.0 billion in the second quarter (line 20).
|Line||Billions of dollars (annual rate)||Percent change from preceding quarter (quarterly rate)|
|Level||Change from preceding quarter|
|1||Current production measures:|
|2||Corporate profits with IVA and CCAdj||2,112.6||47.8||−18.6||−78.7||105.8||2.3||−0.9||−3.8||5.3|
|6||Rest of the world||557.9||16.6||−19.3||7.3||58.3||3.4||−3.8||1.5||11.7|
|7||Receipts from the rest of the world||909.2||1.7||−5.0||13.7||39.9||0.2||−0.6||1.6||4.6|
|8||Less: Payments to the rest of the world||351.3||−14.9||14.3||6.4||−18.5||−4.1||4.1||1.8||−5.0|
|9||Less: Taxes on corporate income||229.7||7.7||−11.8||−3.0||14.2||3.5||−5.1||−1.4||6.6|
|10||Equals: Profits after tax||1,883.0||40.1||−6.8||−75.7||91.5||2.2||−0.4||−4.1||5.1|
|12||Undistributed profits from current production||536.7||2.3||−39.6||−37.8||69.9||0.4||−7.3||−7.5||15.0|
|13||Net cash flow||2,430.0||13.9||−32.1||23.2||98.8||0.6||−1.4||1.0||4.2|
|14||Profits with IVA||2,110.3||53.5||−13.7||−31.4||110.3||2.7||−0.7||−1.5||5.5|
|18||Rest of the world||557.9||16.6||−19.3||7.3||58.3||3.4||−3.8||1.5||11.7|
|19||Profits before tax (without IVA and CCAdj)||2,115.7||10.7||−40.6||−31.1||100.2||0.5||−1.9||−1.5||5.0|
|20||Profits after tax (without IVA and CCAdj)||1,886.0||3.0||−28.7||−28.0||86.0||0.2||−1.5||−1.5||4.8|
- Capital consumption adjustment
- Inventory valuation adjustment
- “Real” estimates are in chained (2012) dollars, and price indexes are chain-type measures. Each GDP estimate for a quarter (advance, second, and third) incorporates increasingly comprehensive and improved source data; for more information, see “The Revisions to GDP, GDI, and Their Major Components” in the January 2018 Survey of Current Business. Quarterly estimates are expressed at seasonally adjusted annual rates, which reflect a rate of activity for a quarter as if it were maintained for a year.
- In this article, “consumer spending” refers to “personal consumption expenditures,” “inventory investment” refers to “change in private inventories,” and “government spending” refers to “government consumption expenditures and gross investment.”