Survey of Current Business

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

November 2022
Volume 102, Number 11

GDP and the Economy

Advance Estimates for the Third Quarter of 2022

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Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the third quarter of 2022, according to the “advance” estimates of the National Income and Product Accounts (NIPAs) (chart 1 and table 1).1 In the second quarter, real GDP decreased 0.6 percent.

The increase in real GDP in the third quarter of 2022 occurred amid continued inflation, a strengthening dollar, low unemployment, supply-chain disruptions, and rising interest rates. The economic effects of these factors cannot be quantified in the GDP estimate for the third quarter of 2022, because the impacts are generally embedded in source data and cannot be separately identified. For more information, refer to the “Technical Note.”

Real GDP increased 2.6 percent in the third quarter of 2022, following a decrease of 0.6 percent in the second quarter. The increase in real GDP reflected increases in exports, consumer spending, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by decreases in residential fixed investment and inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased (chart 2 and table 1).2

  • The increase in exports reflected increases in both goods and services. Within exports of goods, the leading contributors to the increase were industrial supplies and materials (notably, petroleum and products as well as other nondurable goods) and nonautomotive capital goods. Within exports of services, the increase was led by travel and “other” business services (mainly financial services).
  • Within consumer spending, an increase in services (led by health care and “other” services) was partly offset by a decrease in goods (led by motor vehicles and parts as well as food and beverages).
  • Within nonresidential fixed investment, increases in equipment and intellectual property products were partly offset by a decrease in structures.
  • The increase in federal government spending was led by defense spending.
  • The increase in state and local government spending primarily reflected an increase in compensation of state and local government employees.
  • Within residential fixed investment, the leading contributors to the decrease were new single-family construction and brokers' commissions.
  • The decrease in private inventory investment primarily reflected a decrease in retail trade (led by “other” retailers).
  • Within imports, a decrease in imports of goods (notably, consumer goods) was partly offset by an increase in imports of services (mainly travel).

The upturn in real GDP, from a decrease of 0.6 percent to an increase of 2.6 percent, primarily reflected a smaller decrease in private inventory investment, an acceleration in nonresidential fixed investment, and an upturn in federal government spending that was partly offset by a larger decrease in residential fixed investment and a deceleration in consumer spending. Imports, which are a subtraction in the calculation of GDP, turned down.

BEA's 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 4.6 percent in the third quarter after increasing 8.5 percent in the second 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 food and beverages for off-premises consumption (groceries), other nondurable goods (led by recreational items, pharmaceutical and other medical products, personal care products, and household supplies), and motor vehicles and parts (mainly new light trucks). These increases were partly offset by a decrease in the prices paid for gasoline and other energy goods (mainly motor vehicle fuels).
  • Within services, price increases were widespread across most categories. The leading contributor was housing and utilities (mainly the imputed rental of owner-occupied nonfarm housing). Prices for financial services and insurance decreased, primarily reflecting a decrease in prices paid for portfolio management and investment advice services.

Food prices increased 13.3 percent in the third quarter after increasing 14.7 percent in the second quarter. Prices for energy goods and services decreased 13.1 percent after increasing 53.6 percent. Gross domestic purchases prices excluding food and energy increased 4.8 percent after increasing 6.9 percent.

Consumer prices excluding food and energy, a measure of the “core” rate of inflation, increased 4.5 percent in the third quarter after increasing 4.7 percent in the second quarter.

Measured in current dollars, personal income increased $291.2 billion in the third quarter, compared to an increase of $305.7 billion in the second quarter (table 3). The increase in personal income primarily reflected increases in compensation (led by increases in both private and government wages and salaries) and personal income receipts on assets.

Personal current taxes increased $22.9 billion in the third quarter after increasing $52.4 billion in the second quarter.

Disposable personal income (DPI) increased $268.3 billion, or 6.0 percent, in the third quarter after increasing $253.3 billion, or 5.7 percent, in the second quarter. Personal outlays increased $271.3 billion after increasing $409.2 billion in the second quarter.

The personal saving rate (chart 4)—personal saving as a percentage of DPI—was 3.3 percent in the third quarter, compared with 3.4 percent in the second quarter.

Real DPI (chart 5) increased 1.7 percent in the third quarter after decreasing 1.5 percent in the second 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.”