Survey of Current Business

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

June 2022
Volume 102, Number 6

GDP and the Economy

Second Estimates for the First Quarter of 2022

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Real gross domestic product (GDP) decreased at an annual rate of 1.5 percent in the first quarter of 2022, according to the “second” 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. With the second estimate, real GDP growth was revised down 0.1 percentage point from the advance estimate issued last month.

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 1.5 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 reflected decreases in private inventory investment, exports, federal government spending, and state and local 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) as well as in mining, utilities, and construction (notably, utilities).
  • Within exports, a decrease in goods was partly offset by an increase in services.
    • The decrease in goods was led by nonfood and nonautomotive consumer goods, industrial supplies and materials, and foods, feeds, and beverages.
    • The increase in services largely reflected an increase in other business services (mainly financial services) that was partly offset by a decrease in transport services.
  • The decrease in federal government spending was led by defense spending on intermediate goods and services, notably services.
  • The decrease in state and local government spending reflected a decrease in investment in structures that was partly offset by an increase in spending on intermediate goods and services.
  • Within imports, the increase primarily reflected 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 primarily reflected an increase in services; spending on goods increased less than 0.1 percent.
    • Within services, increases were widespread; housing and utilities (mainly electricity and gas) was the leading contributor.
    • Within goods, a decrease in nondurable goods (led by gasoline and other energy goods) was offset by an increase in durable goods (led by motor vehicles and parts, which was more than accounted for by spending on new light trucks).
  • 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 and industrial equipment (notably, special industry machinery).
    • The increase in intellectual property products primarily reflected increases in software (notably, prepackaged software) and in research and development.
  • The increase in residential fixed investment primarily reflected an increase in single-family structures that was partly offset by a decrease in brokers' commissions and other ownership transfer costs.

Real gross domestic income (GDI), the sum of incomes earned and costs incurred in the production of GDP, increased 2.1 percent in the first quarter, compared with an increase of 6.3 percent (revised) in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 0.3 percent in the first quarter, compared with an increase of 6.6 percent (revised) in the fourth quarter.

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 8.0 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 42.7 percent after increasing 34.0 percent. Gross domestic purchases prices excluding food and energy increased 6.9 percent after increasing 6.2 percent.

Consumer prices excluding food and energy, a measure of the “core” rate of inflation, increased 5.1 percent in the first quarter after increasing 5.0 percent in the fourth quarter.

Measured in current dollars, personal income increased $248.3 billion in the first quarter, compared to an increase of $186.3 billion (revised) in the fourth quarter (table 3). The increase primarily reflected an increase in compensation that was partly offset by a decrease in government social benefits. In the first quarter, government assistance payments in the form of social benefits to households decreased as provisions of several federal programs expired or continued to taper off.

  • Within compensation, both private and government wages and salaries increased.
  • Within government social benefits to persons, “other” social benefits and unemployment insurance decreased, reflecting decreased economic impact payments to households established by the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act. The addenda lines in table 3 include detail on the effects of selected federal pandemic response programs on personal income.

Personal current taxes increased $255.7 billion in the first quarter after increasing $113.8 billion (revised) in the fourth quarter.

Disposable personal income (DPI) decreased $7.5 billion in the first quarter after increasing $72.4 billion in the fourth quarter (revised). Personal outlays increased $411.5 billion after increasing $352.2 billion.

The personal saving rate (chart 4)—personal saving as a percentage of DPI—was 5.6 percent in the first quarter, compared with 7.9 percent in the fourth quarter (revised).

Real DPI (chart 5) decreased 6.7 percent in the first quarter after decreasing 4.5 percent in the fourth quarter (revised). DPI is deflated by the implicit price deflator for consumer spending, which increased 7.0 percent in the first quarter. Current-dollar DPI decreased 0.2 percent after increasing 1.6 percent (revised).

In addition to presenting updated estimates for the first quarter, this estimate presents revised estimates of fourth-quarter wages and salaries, personal taxes, and contributions for government social insurance, based on updated data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program.

Wages and salaries are now estimated to have increased $341.0 billion in the fourth quarter, an upward revision of $66.6 billion. Personal current taxes are now estimated to have increased $113.8 billion, an upward revision of $10.0 billion. Contributions for government social insurance are now estimated to have increased $44.8 billion, an upward revision of $8.9 billion. With the incorporation of these new data, real gross domestic income is now estimated to have increased 6.3 percent in the fourth quarter, an upward revision of 1.2 percentage points from the previously published estimate.

The decrease in first-quarter real GDP was revised down 0.1 percentage point from the “advance” estimate, primarily reflecting downward revisions to private inventory investment and residential fixed investment that were mostly offset by upward revisions to consumer spending and exports. Imports were revised up (table 4).

  • The revision to private inventory investment was led by downward revisions to manufacturing (notably, nondurable goods) and to “other” industries (notably, information).
  • Within residential fixed investment, the leading contributor to the downward revision was improvements.
  • Within consumer spending, both services and goods were revised up.
    • Upward revisions to services provided by nonprofit institutions serving households (notably, hospital services) and “other” services (led by legal and telecommunications services) were partly offset by a downward revision to health care.
    • Within goods, an upward revision to motor vehicles and parts (notably, new and used light trucks) was largely offset by a downward revision to food and beverages purchased for off-premises consumption (groceries).
  • For both exports and imports, the revisions reflected upward revisions to goods (led by industrial supplies and materials).

Measured in current dollars, profits from current production (corporate profits with the inventory valuation adjustment and the capital consumption adjustment decreased $66.4 billion, or 2.3 percent at a quarterly rate, in the first quarter after increasing $20.4 billion in the fourth quarter (table 5). Profits of domestic financial corporations decreased $28.6 billion, profits of domestic nonfinancial corporations decreased $21.1 billion, and rest-of-the-world profits decreased $16.7 billion.

 


  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.”