Survey of Current Business

Survey of Current Business
Chronicling 100 Years of the U.S. Economy

May 2022
Volume 102, Number 5

GDP and the Economy

Advance Estimates for the First Quarter of 2022

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Real gross domestic product (GDP) decreased at an annual rate of 1.4 percent in the first quarter of 2022, according to the “advance” estimates of the National Income and Product Accounts (chart 1 and table 1).1 In the fourth quarter of 2021, real GDP increased 6.9 percent.

The decline in real GDP in the first quarter of 2022 occurred amid a resurgence of COVID–19 cases from the Omicron variant and decreases in government pandemic assistance payments. Other economic conditions including supply-chain challenges, low unemployment, and widespread inflation continued. The full economic effects of the COVID–19 pandemic and other economic factors cannot be quantified in the GDP estimates, because the impacts are generally embedded in source data and cannot be separately identified. Real GDP for the first quarter of 2022 is 2.8 percent above the level of real GDP for the fourth quarter of 2019, the most recent quarter prior to the onset of the COVID–19 pandemic. For more information, refer to the “Technical Note” and “Federal Recovery Programs and BEA Statistics.”

Real GDP decreased 1.4 percent (annual rate) in the first quarter of 2022, following an increase of 6.9 percent in the fourth quarter of 2021. The decrease in real GDP primarily reflected decreases in private inventory investment, exports, and federal government spending, while imports, which are a subtraction in the calculation of GDP, increased. Consumer spending, nonresidential fixed investment, and residential fixed investment increased (chart 2 and table 1).2

  • The decrease in private inventory investment was led by decreases in wholesale trade (mainly motor vehicles) and retail trade (notably, other retailers and motor vehicle dealers).
  • Within exports, a decrease in goods was partly offset by an increase in services. Within goods, the leading contributors to the decrease were nonfood and nonautomotive consumer goods as well as industrial supplies and materials. Within services, the increase was led by other business services (mainly financial services).
  • The decrease in federal government spending was led by defense spending on intermediate goods and services, notably services.
  • Within imports, the increase was led by an increase in goods, led by nonfood and nonautomotive consumer goods, nonautomotive capital goods, and automotive vehicles, engines, and parts.
  • The increase in consumer spending reflected an increase in services that was partly offset by a decrease in goods.
    • Within services, increases were widespread; health care (both outpatient services and hospitals and nursing homes), financial services and insurance (mainly financial service charges, fees, and commissions), and housing and utilities (electricity and gas) were leading contributors.
    • Within goods, a decrease in nondurable goods, led by gasoline and other energy goods, was partly offset by an increase in durable goods, led by motor vehicles and parts (new light trucks) as well as recreational goods and vehicles.
  • The increase in nonresidential fixed investment reflected increases in equipment and intellectual property products.
    • Within equipment, the leading contributors to the increase were information processing equipment (mainly computers and peripheral equipment) and industrial equipment (notably, special industry machinery).
    • The increase in intellectual property products reflected increases in software (notably, prepackaged software) and in research and development.

The Bureau of Economic Analysis' featured measure of inflation in the U.S. economy, the price index for gross domestic purchases (goods and services purchased by U.S. residents), increased 7.8 percent in the first quarter after increasing 7.0 percent in the fourth quarter (table 2 and chart 3). Price increases were widespread across all major expenditure categories and were led by increases in consumer goods and services.

  • Within goods, the leading contributors to the price increase were gasoline and other energy goods, food and beverages purchased for off-premises consumption (groceries), other nondurable goods (notably prescription drugs and household supplies), and furnishings and durable household equipment.
  • Within services, the leading contributor was an increase in prices paid for housing and utilities (mainly reflecting imputed rental of owner-occupied nonfarm housing) and health care (notably, hospital services).

Food prices increased 11.2 percent in the first quarter after increasing 9.0 percent in the fourth quarter. Prices for energy goods and services increased 42.5 percent after increasing 34.0 percent. Gross domestic purchases prices excluding food and energy increased 6.7 percent after increasing 6.2 percent.

Consumer prices excluding food and energy, a measure of the “core” rate of inflation, increased 5.2 percent in the first quarter after increasing 5.0 percent in the fourth quarter.

Measured in current dollars, personal income increased $268.0 billion in the first quarter, compared to an increase of $123.9 billion in the fourth quarter (table 3). The increase in personal income primarily reflected an increase in compensation that was partly offset by a decrease in government social benefits. Within compensation, both private and government wages and salaries increased. Within government social benefits, a decrease in other benefits was partly offset by an increase in social security. The decrease in other benefits primarily reflected the pattern of payments for the expanded child tax credit authorized by the American Rescue Plan Act of 2021. The increase in social security primarily reflected a 5.9 percent cost-of-living adjustment that took effect in January.

Personal current taxes increased $51.4 billion in the first quarter after increasing $103.8 billion in the fourth quarter. Both state and local taxes and federal taxes increased.

Disposable personal income (DPI) increased $216.6 billion in the first quarter after increasing $20.1 billion in the fourth quarter. Personal outlays increased $398.5 billion after increasing $352.2 billion in the fourth quarter.

The personal saving rate (chart 4)—personal saving as a percentage of DPI—was 6.6 percent in the first quarter; in the fourth quarter, the personal saving rate was 7.7 percent.

Real DPI (chart 5) decreased 2.0 percent in the first quarter after decreasing 5.6 percent in the fourth quarter. Current-dollar DPI increased 4.8 percent after increasing 0.4 percent. Current-dollar DPI is deflated by the implicit price deflator for consumer spending, which increased 7.0 percent in the first quarter.

 

 


  1. “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 2021 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.
  2. 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.”