Survey of Current Business

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

August 2022
Volume 102, Number 8

GDP and the Economy

Advance Estimates for the Second Quarter of 2022

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Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022, according to the “advance” estimates of the National Income and Product Accounts (chart 1 and table 1).1 In the first quarter, real GDP decreased 1.6 percent.

The decrease in real GDP in the second quarter of 2022 occurred amid continued inflation, low unemployment, ongoing supply-chain challenges, and rising interest rates. The economic effects of these factors cannot be quantified in the GDP estimate for the second quarter, because the impacts are generally embedded in source data and cannot be separately identified. Real GDP for the second quarter of 2022 is 2.5 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 0.9 percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter. The decrease in real GDP primarily reflected decreases in private inventory investment, residential fixed investment, federal government spending, state and local government spending, and nonresidential fixed investment, while imports, which are a subtraction in the calculation of GDP, increased. Exports and consumer spending increased (chart 2 and table 1).2

  • The decrease in private inventory investment was led by retail trade (notably, general merchandise stores as well as motor vehicle dealers).
  • The decrease in residential fixed investment reflected decreases in brokers' commissions and other ownership transfer costs.
  • The decrease in federal government spending was led by 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 gross investment in structures.
  • The decrease in nonresidential fixed investment reflected decreases in structures and equipment that were mostly offset by an increase in intellectual property products.
  • Within exports, both goods and services increased. Within goods, the leading contributors to the increase were industrial supplies and materials (notably, petroleum and products); foods, feeds, and beverages; and nonfood and nonautomotive consumer goods. Within services, the increase was led by travel.
  • Within imports, the increase reflected an increase in services (mainly travel).
  • The increase in consumer spending reflected an increase in services that was partly offset by a decrease in goods.
    • Within services, increases were widespread; food services and accommodations (purchased meals and beverages), health care (both hospitals and outpatient services), and “other” services (international travel) were leading contributors.
    • Within goods, the decrease reflected both nondurable goods (notably, food and beverages and gasoline and other energy goods) and durable goods (mainly recreational goods and vehicles as well as furnishings and durable household equipment).

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 8.2 percent in the second quarter after increasing 8.0 percent in the first 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, household supplies, newspapers, and recreational items), 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 transportation services (notably, air transportation).

Food prices increased 14.4 percent in the second quarter after increasing 11.2 percent in the first quarter. Prices for energy goods and services increased 51.7 percent after increasing 43.2 percent. Gross domestic purchases prices excluding food and energy increased 6.6 percent after increasing 6.9 percent.

Consumer prices excluding food and energy, a measure of the “core” rate of inflation, increased 4.4 percent in the second quarter after increasing 5.2 percent in the first quarter.

Measured in current dollars, personal income increased $353.8 billion in the second quarter, compared to an increase of $247.2 billion in the first quarter (table 3). The second-quarter increase in personal income primarily reflected increases in compensation (led by increases in both private and government wages and salaries), proprietors' income (both farm and nonfarm), personal income receipts on assets, and rental income.

Personal current taxes increased $62.4 billion in the second quarter after increasing $306.0 billion in the first quarter.

Disposable personal income (DPI) increased $291.4 billion in the second quarter after decreasing $58.8 billion in the first quarter. Personal outlays increased $346.0 billion after increasing $364.9 billion in the first quarter.

The personal saving rate (chart 4)—personal saving as a percentage of DPI—was 5.2 percent in the second quarter, compared with 5.6 percent in the first quarter.

Real DPI (chart 5) decreased 0.5 percent in the second quarter after decreasing 7.8 percent in the first quarter. Current-dollar DPI increased 6.6 percent after decreasing 1.3 percent.

 


  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.”