GDP and the Economy

Third Estimates for the First Quarter of 2021

Volume 101, Number 7  |  July 21, 2021

Download PDF

Real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021, according to the third estimates of the National Income and Product Accounts (NIPAs) (chart 1 and table 1).1 With the third estimate, real GDP growth for the first quarter was unrevised from the second estimate issued last month (see“Updates”). In the fourth quarter of 2020, real GDP increased 4.3 percent.

The increase in real GDP in the first quarter reflected increases in consumer spending, nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by decreases in private inventory investment and exports.2 Imports, which are a subtraction in the calculation of GDP, increased (chart 2 and table 1).


Chart 1. Real GDP: Percent Change from Preceding Quarter

[Click chart to expand]


Chart 2. Real GDP: Contributions to the Percent Change in 2021:Q1

[Click chart to expand]

The acceleration in real GDP growth in the first quarter reflected the continued economic recovery from the COVID-19 pandemic as government assistance payments were distributed to households and businesses. An acceleration in consumer spending and upturns in federal as well as state and local government spending more than accounted for the acceleration in real GDP. These were partly offset by downturns in private inventory investment and exports and by decelerations in residential fixed investment and nonresidential fixed investment. Imports slowed.

  • The acceleration in consumer spending reflected an upturn in spending on goods. All components of both durable and nondurable goods contributed to the upturn. The leading contributors were upturns in spending on motor vehicles and parts, food and beverages purchased for off-premises consumption, furnishings and durable household equipment, and recreational goods and vehicles.
  • The upturn in federal government spending was more than accounted for by an upturn in nondefense consumption expenditures on intermediate goods and services purchased by government. In the first quarter, the processing and administration of Paycheck Protection Program loan applications by banks on behalf of the federal government added approximately $13.2 billion ($52.6 billion at an annual rate) to nondefense services. Federal government purchases of COVID-19 vaccines for distribution to the public contributed to the upturn in nondefense goods.
  • The upturn in state and local government spending reflected an upturn in consumption expenditures, led by compensation of employees, that was partly offset by a downturn in gross investment, led by a downturn in structures.
  • The downturn in private inventory investment was led by a downturn in manufacturing and a larger decrease in retail trade. The downturn in manufacturing reflected downturns in both durable and nondurable goods industries. Within retail trade, the larger decrease primarily reflected a larger decrease in inventory investment by motor vehicle dealers.
  • The downturn in exports reflected downturns in both goods, led by downturns in industrial supplies and materials and in foods, feeds, and beverages, and services, led by a downturn in royalties and license fees, and a deceleration in transport services.
  • Residential fixed investment slowed, largely reflecting a slowdown in new residential structures, notably single-family units, and a downturn in brokers' commissions.
  • Nonresidential fixed investment slowed, reflecting a slowdown in investment in equipment that was partly offset by an acceleration in intellectual property products and a smaller decrease in investment in structures.
    • The slowdown in equipment investment primarily reflected a slowdown in transportation equipment that was partly offset by an acceleration in information processing equipment.
    • The acceleration in intellectual property products was more than accounted for by a pickup in software investment.
    • The smaller decrease in structures was more than accounted for by an upturn in investment in structures for manufacturing.
  • Imports slowed. As a subtraction in the calculation of GDP, the slowdown in imports contributed to the acceleration in first-quarter GDP. The main contributor was a downturn in automotive vehicles, engines, and parts.
Table 1. Real Gross Domestic Product (GDP) by Expenditure and Related Measures
[Seasonally adjusted at annual rates]
Line Series Share of current-dollar GDP (percent) Change from preceding period (percent) Contribution to percent change in real GDP (percentage points)
2021 2020 2021 2020 2021
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
1 Gross domestic product (GDP)1 100.0 −31.4 33.4 4.3 6.4 −31.4 33.4 4.3 6.4
2 Personal consumption expenditures 68.3 −33.2 41.0 2.3 11.4 −24.01 25.44 1.58 7.42
3 Goods 23.7 −10.8 47.2 −1.4 26.6 −2.06 9.55 −0.32 5.53
4 Durable goods 8.8 −1.7 82.7 −1.1 49.2 0.00 5.20 −0.09 3.43
5 Nondurable goods 14.9 −15.0 31.1 −1.6 15.2 −2.05 4.35 −0.23 2.10
6 Services 44.7 −41.8 38.0 4.3 4.2 −21.95 15.89 1.90 1.89
7 Gross private domestic investment 17.8 −46.6 86.3 27.8 −3.4 −8.77 11.96 4.41 −0.58
8 Fixed investment 18.2 −29.2 31.3 18.6 12.1 −5.27 5.39 3.04 2.09
9 Nonresidential 13.4 −27.2 22.9 13.1 11.7 −3.67 3.20 1.65 1.51
10 Structures 2.5 −33.6 −17.4 −6.2 −2.0 −1.11 −0.53 −0.17 −0.05
11 Equipment 6.0 −35.9 68.2 25.4 15.0 −2.03 3.26 1.32 0.84
12 Intellectual property products 5.0 −11.4 8.4 10.5 15.3 −0.53 0.46 0.49 0.71
13 Residential 4.8 −35.6 63.0 36.6 13.1 −1.60 2.19 1.39 0.58
14 Change in private inventories −0.4 ...... ...... ...... ...... −3.50 6.57 1.37 −2.67
15 Net exports of goods and services −4.0 ...... ...... ...... ...... 0.62 −3.21 −1.53 −1.50
16 Exports 10.4 −64.4 59.6 22.3 −2.1 −9.51 4.89 2.04 −0.21
17 Goods 7.3 −66.8 104.3 31.1 −1.7 −6.56 4.87 1.88 −0.11
18 Services 3.1 −59.6 −0.5 5.2 −3.1 −2.95 0.03 0.16 −0.10
19 Imports 14.4 −54.1 93.1 29.8 9.5 10.13 −8.10 −3.57 −1.29
20 Goods 12.3 −49.6 110.2 31.0 10.6 7.32 −7.67 −3.12 −1.21
21 Services 2.1 −69.9 24.9 23.8 3.7 2.80 −0.43 −0.45 −0.08
22 Government consumption expenditures and gross investment 17.9 2.5 −4.8 −0.8 5.7 0.77 −0.75 −0.14 1.02
23 Federal 7.1 16.4 −6.2 −0.9 13.8 1.17 −0.38 −0.06 0.92
24 National defense 4.1 3.8 3.2 4.8 −3.6 0.18 0.17 0.20 −0.15
25 Nondefense 3.0 37.6 −18.3 −8.9 45.0 0.98 −0.55 −0.26 1.07
26 State and local 10.8 −5.4 −3.9 −0.8 0.8 −0.40 −0.37 −0.08 0.09
Addenda:
27 Gross domestic income (GDI)2 ...... −32.6 24.1 19.4 7.6 ...... ...... ...... ......
28 Average of GDP and GDI ...... −32.0 28.7 11.6 7.0 ...... ...... ...... ......
29 Final sales of domestic product ...... −28.1 25.9 2.9 9.2 −27.88 26.87 2.95 9.03
30 Goods 31.2 −29.0 62.4 5.4 10.2 −7.40 17.42 1.69 3.13
31 Services 59.9 −32.9 23.7 2.1 4.9 −21.32 14.60 1.27 2.95
32 Structures 8.9 −28.4 14.9 16.7 3.0 −2.66 1.42 1.36 0.27
33 Motor vehicle output 2.8 −86.9 1,133.9 −12.7 1.3 −3.99 5.92 −0.40 0.04
  1. The GDP estimates under the contribution columns are also percent changes.
  2. GDI is deflated by the implicit price deflator for GDP.

Note. Percent changes are from National Income and Product Account (NIPA) tables 1.1.1 and 1.2.1, contributions are from NIPA tables 1.1.2 and 1.2.2, and shares are from NIPA table 1.1.10 or are calculated from NIPA table 1.2.5.

The third estimate of GDP includes estimates of GDP by industry, or value added—a measure of an industry's contribution to GDP. In the first quarter, private goods-producing industries increased 5.4 percent, private services-producing industries increased 7.7 percent, and government increased 0.2 percent (table 2 and charts 3 and 4). Overall, 17 of 22 industry groups contributed to the fourth-quarter increase in real GDP.

  • The increase in private goods-producing industries primarily reflected an increase in durable goods manufacturing, led by computer and electronic products, fabricated metal products, and machinery. The increase was partly offset by decreases in nondurable goods manufacturing, led by petroleum and coal products, and agriculture, forestry, fishing, and hunting, led by farms.
Chart 3. Real GDP by Sector: Percent Change from Preceding Period

[Click chart to expand]

  • The increase in private services-producing industries primarily reflected increases in professional, scientific, and technical services; information, led by data processing, internet publishing, and other information services; administrative and waste management services, led by administrative and support services; real estate and rental and leasing; and retail trade. These increases were partly offset by decreases in other services (which includes activities of political organizations), health care and social assistance, led by ambulatory health care services, and utilities.
  • The increase in government reflected increases in federal as well as state and local spending.
Chart 4. Contributions to Percent Change in Real GDP by Industry Group, 2021:Q1

[Click chart to expand]

Table 2. Real Gross Domestic Product by Industry Group and Related Measures
[Seasonally adjusted at annual rates]
Line Series Share of current-dollar GDP (percent) Change from preceding period (percent) Contribution to percent change in real GDP (percentage points)
2021 2020 2021 2020 2021
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
1 Gross Domestic Product 100.0 −31.4 33.4 4.3 6.4 −31.4 33.4 4.3 6.4
2 Private industries 87.9 −33.3 37.3 5.1 7.3 −29.45 32.01 4.46 6.34
3 Agriculture, forestry, fishing, and hunting 1.0 −36.4 53.3 5.8 −12.5 −0.31 0.38 0.05 −0.12
4 Mining 1.2 −40.7 −14.4 6.4 4.9 −0.41 −0.11 0.06 0.05
5 Utilities 1.7 −8.6 0.8 −9.1 −3.5 −0.12 0.02 −0.15 −0.06
6 Construction 4.3 −26.5 27.4 12.0 6.9 −1.12 1.21 0.49 0.29
7 Manufacturing 11.1 −36.6 61.6 3.9 6.5 −4.10 5.98 0.43 0.73
8 Durable goods 6.2 −43.3 80.3 6.8 15.6 −2.84 4.13 0.42 0.92
9 Nondurable Goods 4.9 −27.0 40.4 0.2 −4.2 −1.25 1.85 0.01 −0.20
10 Wholesale trade 5.9 −35.0 45.3 2.9 6.2 −2.09 2.50 0.17 0.36
11 Retail trade 6.0 −31.2 46.9 1.3 11.2 −1.75 2.58 0.08 0.64
12 Transporation and warehousing 2.8 −64.8 65.4 3.2 6.9 −2.56 1.58 0.09 0.19
13 Information 5.6 −6.8 19.7 3.0 14.4 −0.29 1.17 0.17 0.77
14 Finance, insurance, real estate, rental, and leasing 21.8 −2.5 9.6 5.4 5.5 −0.24 2.43 1.18 1.22
15 Finance and insurance 8.2 11.9 12.8 12.9 6.9 1.01 1.20 1.02 0.56
16 Real estate and rental and leasing 13.6 −10.0 7.7 1.2 4.8 −1.26 1.23 0.16 0.65
17 Professional and business services 12.9 −29.9 25.5 10.6 14.5 −3.84 3.35 1.30 1.78
18 Professional, scientific, and technical services 7.8 −26.8 21.6 7.1 11.8 −2.06 1.76 0.54 0.88
19 Management of companies and enterprises 1.9 −8.5 7.5 8.8 11.7 −0.15 0.16 0.16 0.22
20 Administrative and waste management services 3.2 −47.1 50.6 21.1 23.4 −1.63 1.43 0.60 0.68
21 Educational services, health care, and social assistance 8.6 −46.9 65.6 5.4 0.2 −4.54 4.99 0.47 0.02
22 Educational services 1.2 −39.5 19.2 −11.4 11.5 −0.54 0.25 −0.14 0.13
23 Health care and social assistance 7.4 −48.1 75.1 8.3 −1.4 −4.00 4.74 0.61 −0.10
24 Arts, entertainment, recreation, accomodation, and food services 3.3 −91.5 333.5 2.3 20.8 −6.58 4.79 0.08 0.64
25 Arts, entertainment, and recreation 0.7 −96.9 293.1 47.5 36.2 −2.20 0.91 0.27 0.22
26 Accommodation and food services 2.6 −88.4 344.5 −7.1 16.9 −4.38 3.88 −0.19 0.41
27 Other services, except government 1.9 −58.8 65.6 2.2 −8.4 −1.51 1.14 0.04 −0.17
28 Government 12.1 −16.6 10.1 −1.1 0.2 −1.93 1.44 −0.13 0.03
29 Federal 3.9 3.7 6.1 −1.4 0.5 0.16 0.29 −0.05 0.02
30 State and local 8.2 −24.6 12.0 −0.9 0.0 −2.09 1.15 −0.07 0.01
  Addenda:
31 Private goods-producing industries1 17.5 −34.4 47.2 6.1 5.4 −5.93 7.45 1.03 0.95
32 Private services-producing industries2 70.4 −33.1 35.1 4.9 7.7 −23.52 24.55 3.43 5.39
  1. Consists of agriculture, forestry, fishing, and hunting; mining; construction; and manufacturing.
  2. Consists of utilities; wholesale trade; retail trade; transportation and warehousing; information; finance, insurance, real estate, rental, and leasing; professional and business services; educational services, health care, and social assistance; arts, entertainment, recreation, accommodation, and food services; and other services, except government.

Note. Percent changes are from these GDP by industry tables: “Value Added by Industry as a Percentage of Gross Domestic Product,” “Percent Changes in Chain-Type Quantity Indexes for Value Added by Industry,” and “Contributions to Percent Change in Real Gross Domestic Product by Industry.”

Gross output by industry—principally a measure of an industry’s sales or receipts, which includes sales to final users in the economy (GDP by expenditure) and sales to other industries (intermediate inputs)—increased 8.9 percent in the first quarter. Private goods-producing industries decreased 1.7 percent, private services-producing industries increased 13.4 percent, and government increased 6.0 percent (table 3 and chart 5). Overall, 17 of 22 industry groups contributed to the increase in real gross output, led by retail trade, finance and insurance, and information. A decrease in nondurable goods manufacturing was the most notable offset to these increases.

Chart 5. Real Gross Output by Selected Industries: Percent Change from Preceding Period

[Click chart to expand]

Table 3. Real Gross Output by Industry Group and Related Measures
[Seasonally adjusted at annual rates]
Line Series Change from preceding period (percent)
2020 2021
Q2 Q3 Q4 Q1
1 All industries1 −29.5 28.7 6.7 8.9
2 Private industries −31.9 32.6 7.6 9.2
3 Agriculture, forestry, fishing, and hunting −14.3 15.9 3.3 −5.5
4 Mining −55.2 −12.2 10.2 0.5
5 Utilities −2.0 −0.6 −5.9 9.0
6 Construction −13.7 4.4 12.2 5.5
7 Manufacturing −32.8 49.4 5.8 −3.6
8 Durable goods −44.6 93.0 10.3 −0.9
9 Nondurable goods −17.9 13.5 1.0 −6.6
10 Wholesale trade −39.0 55.0 9.6 14.7
11 Retail trade −18.2 45.1 −0.6 28.5
12 Transporation and warehousing −64.9 64.6 18.5 18.9
13 Information −8.5 17.3 11.8 20.1
14 Finance, insurance, real estate, rental, and leasing −6.5 9.0 4.9 10.6
15 Finance and insurance 3.8 6.5 7.8 19.6
16 Real estate and rental and leasing −13.8 11.0 2.8 4.0
17 Professional and business services −31.1 21.0 15.3 15.7
18 Professional, scientific, and technical services −33.4 21.8 13.6 13.8
19 Management of companies and enterprises −7.2 3.2 8.0 12.1
20 Administrative and waste management services −37.8 31.3 23.2 21.7
21 Educational services, health care, and social assistance −41.4 45.6 8.9 −1.5
22 Educational services −36.1 20.2 −7.0 9.0
23 Health care and social assistance −42.1 49.7 11.3 −2.9
24 Arts, entertainment, recreation, accomodation, and food services −88.0 277.9 1.6 30.9
25 Arts, entertainment, and recreation −95.6 215.0 40.8 46.9
26 Accommodation and food services −84.3 293.5 −5.7 27.4
27 Other services, except government −63.1 61.9 3.3 −1.9
28 Government −7.6 2.0 0.0 6.0
29 Federal 18.5 −8.3 −1.2 16.3
30 State and local −17.7 7.3 0.5 1.5
  Addenda:
31 Private goods-producing industries1 −29.7 33.6 7.2 −1.7
32 Private services-producing industries2 −32.6 32.3 7.8 13.4
  1. Consists of agriculture, forestry, fishing, and hunting; mining; construction; and manufacturing.
  2. Consists of utilities; wholesale trade; retail trade; transportation and warehousing; information; finance, insurance, real estate, rental, and leasing; professional and business services; educational services, health care, and social assistance; arts, entertainment, recreation, accommodation, and food services; and other services, except government.

Note. Percent changes are from the table Percent Changes in Chain-Type Quantity Indexes for Gross Output by Industry which is available through BEA's Interactive Data Application.

Prices for gross domestic purchases—goods and services purchased by U.S. residents—increased 4.0 percent in the first quarter after increasing 1.7 percent in the fourth quarter (table 4 and chart 6). The pickup mainly reflected accelerations in the consumer prices for gasoline and other energy goods and for health care.

Food prices decreased slightly in the first quarter after being unchanged in the fourth quarter. Prices for energy goods and services increased 45.8 percent after increasing 9.1 percent. Gross domestic purchases prices excluding food and energy increased 3.3 percent after increasing 1.6 percent.

Chart 6. Prices for Gross Domestic Purchases

[Click chart to expand]

Table 4. Prices for Gross Domestic Purchases
[Percent change at annual rates; based on seasonally adjusted index numbers (2012=100)]
Line Series Change from preceding period (percent) Contribution to percent change in gross domestic purchases prices (percentage points)
2020 2021 2020 2021
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
1 Gross domestic purchases1 −1.4 3.3 1.7 4.0 −1.4 3.3 1.7 4.0
2 Personal consumption expenditures −1.6 3.7 1.5 3.7 −1.06 2.39 0.96 2.44
3 Goods −5.6 5.4 0.1 5.7 −1.21 1.18 0.02 1.25
4 Durable goods −3.1 8.2 0.0 1.8 −0.23 0.62 0.00 0.15
5 Nondurable goods −6.8 4.0 0.2 7.9 −0.98 0.56 0.02 1.09
6 Services 0.3 2.8 2.2 2.7 0.15 1.21 0.94 1.19
7 Gross private domestic investment −0.1 2.7 1.5 2.8 0.00 0.43 0.26 0.49
8 Fixed investment 0.8 2.2 1.8 3.5 0.14 0.38 0.30 0.61
9 Nonresidential 0.8 0.1 0.2 0.6 0.11 0.02 0.03 0.08
10 Structures −1.1 0.5 0.1 4.1 −0.03 0.01 0.00 0.10
11 Equipment 0.0 −0.6 −1.8 1.3 0.00 −0.03 −0.10 0.07
12 Intellectual property products 2.9 0.7 2.7 −2.0 0.14 0.04 0.13 −0.10
13 Residential 1.0 9.5 6.5 12.3 0.04 0.37 0.27 0.53
14 Change in private inventories ...... ...... ...... ...... −0.14 0.05 −0.04 −0.12
15 Government consumption expenditures and gross investment −1.9 2.6 2.8 6.1 −0.35 0.48 0.48 1.03
16 Federal −1.1 1.7 2.6 3.8 −0.08 0.12 0.18 0.26
17 National defense −2.5 2.0 2.8 4.4 −0.10 0.08 0.11 0.17
18 Nondefense 1.0 1.3 2.4 3.1 0.03 0.04 0.06 0.08
19 State and local −2.4 3.2 2.9 7.5 −0.28 0.36 0.30 0.77
Addenda:
  Gross domestic purchases:                
20 Food 15.7 −1.7 0.0 −0.1 0.77 −0.09 0.00 −0.01
21 Energy goods and services −45.7 27.4 9.1 45.8 −1.47 0.59 0.19 0.89
22 Excluding food and energy −0.8 3.0 1.6 3.3 −0.71 2.80 1.51 3.07
  Personal consumption expenditures:                
23 Food and beverages purchased for off-premises consumption 15.4 −1.9 −0.4 0.7 ...... ...... ...... ......
24 Energy goods and services −44.9 24.9 11.5 46.8 ...... ...... ...... ......
25 Excluding food and energy −0.8 3.4 1.3 2.5 ...... ...... ...... ......
26 Gross domestic product −1.8 3.5 2.0 4.3 ...... ...... ...... ......
27 Exports of goods and services −18.8 12.8 5.9 20.0 ...... ...... ...... ......
28 Imports of goods and services −12.8 8.6 2.2 12.6 ...... ...... ...... ......
  1. The estimated prices for gross domestic purchases under the contribution columns are also percent changes.

Note. Most percent changes are from NIPA table 1.6.7; percent changes for PCE for food and energy goods and services and for PCE excluding food and energy are from NIPA table 2.3.7. Contributions are from NIPA table 1.6.8. Gross domestic product, export, and import prices are from NIPA table 1.1.7.

In the third estimate for the first quarter, real GDP increased at the same rate as previously reported in the second estimate (table 5). The updated estimates primarily reflected upward revisions to nonresidential fixed investment, private inventory investment, exports, and consumer spending that were offset by an upward revision to imports (which are a subtraction in the calculation of GDP).

  • Within nonresidential fixed investment, the revision reflected upward revisions to investment in structures, notably, warehouses, and in equipment, notably, communication equipment and computers and peripheral equipment. Partly offsetting these upward revisions was a downward revision to intellectual property products, notably, software.
  • The revision to private inventory investment reflected an upward revision to nonfarm inventories, notably in information industries.
  • Within exports, the leading contributor to the upward revision was goods exports, notably, foods, feeds, and beverages.
  • Within imports, the leading contributor to the upward revision was also goods, notably nonautomotive consumer and capital goods.
  • Within consumer spending, an upward revision to goods was mostly offset by a downward revision to services.
    • Within goods, the leading contributors to the revision were upward revisions to food and beverages and other nondurable goods.
    • Within services, downward revisions to health care, notably, physicians services and home health care, and transportation services, notably, motor vehicle maintenance and repair, were partly offset by upward revisions to financial services and insurance, notably, portfolio management and investment advice services, and recreation services, notably, casino gambling.
Table 5. Second and Third Estimates for the First Quarter of 2021
[Seasonally adjusted at annual rates]
Line Series Change from preceding period (percent) Contribution to percent change in real GDP (percentage points)
Second estimate Third estimate Third estimate minus second estimate Second estimate Third estimate Third estimate minus second estimate
1 Gross domestic product (GDP)1 6.4 6.4 0.0 6.4 6.4 0.0
2 Personal consumption expenditures 11.3 11.4 0.1 7.40 7.42 0.02
3 Goods 25.6 26.6 1.0 5.34 5.53 0.19
4 Durable goods 48.6 49.2 0.6 3.40 3.43 0.03
5 Nondurable goods 14.0 15.2 1.2 1.95 2.10 0.15
6 Services 4.6 4.2 −0.4 2.06 1.89 −0.17
7 Gross private domestic investment −4.7 −3.4 1.3 −0.82 −0.58 0.24
8 Fixed investment 11.3 12.1 0.8 1.96 2.09 0.13
9 Nonresidential 10.8 11.7 0.9 1.39 1.51 0.12
10 Structures −5.8 −2.0 3.8 −0.15 −0.05 0.10
11 Equipment 13.4 15.0 1.6 0.76 0.84 0.08
12 Intellectual property products 16.9 15.3 −1.6 0.78 0.71 −0.07
13 Residential 12.7 13.1 0.4 0.57 0.58 0.01
14 Change in private inventories ...... ...... ...... −2.78 −2.67 0.11
15 Net exports of goods and services ...... ...... ...... −1.20 −1.50 −0.30
16 Exports −2.9 −2.1 0.8 −0.29 −0.21 0.08
17 Goods −3.4 −1.7 1.7 −0.24 −0.11 0.13
18 Services −1.6 −3.1 −1.5 −0.05 −0.10 −0.05
19 Imports 6.7 9.5 2.8 −0.91 −1.29 −0.38
20 Goods 6.5 10.6 4.1 −0.75 −1.21 −0.46
21 Services 7.6 3.7 −3.9 −0.16 −0.08 0.08
22 Government consumption expenditures and gross investment 5.8 5.7 −0.1 1.02 1.02 0.00
23 Federal 13.9 13.8 −0.1 0.93 0.92 −0.01
24 National defense −3.4 −3.6 −0.2 −0.14 −0.15 −0.01
25 Nondefense 44.8 45.0 0.2 1.07 1.07 0.00
26 State and local 0.8 0.8 0.0 0.09 0.09 0.00
  Addenda:
27 Final sales of domestic product 9.4 9.2 −0.2 9.18 9.03 −0.15
28 Gross domestic income (GDI) 6.8 7.6 ...... ...... ...... ......
29 Average of GDP and GDI 6.6 7.0 ...... ...... ...... ......
30 Gross domestic purchases price index 3.9 4.0 0.1 ...... ...... ......
31 GDP price index 4.3 4.3 0.0 ...... ...... ......
  1. The GDP estimates under the contribution columns are also percent changes.

Measured in current dollars, profit from current production (corporate profits with the inventory valuation adjustment (IVA) and the capital consumption adjustment (CCAdj)) increased $55.2 billion in the first quarter, in contrast to a decrease of $31.4 billion in the fourth quarter (table 6). Profits of domestic financial corporations decreased $6.4 billion, in contrast to an increase of $17.5 billion. Profits of domestic nonfinancial corporations increased $72.1 billion, in contrast to a decrease of $48.2 billion. Rest-of-the-world profits decreased $10.6 billion, compared with a decrease of $0.7 billion. In the first quarter, receipts increased $34.2 billion and payments increased $44.8 billion.

Estimates of corporate profits were affected by a legal settlement paid by Boeing in the first quarter. The NIPAs record these settlements on an accrual basis in the quarter when the settlement is finalized, regardless of when they are recorded on a company's financial statement. The settlement agreement paid by Boeing totaled $2.5 billion ($10.1 billion at an annual rate) and reflected payments of $0.2 billion to the federal government, $0.6 billion to the air transportation industry, and $1.7 billion to the “rest of the world.”

Table 6. Corporate Profits
[Seasonally adjusted]
Line Series Billions of dollars (annual rate) Percent change from preceding quarter (quarterly rate)
Level Change from preceding quarter
2021 2020 2021 2020 2021
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
  Current production measures:                  
1 Corporate profits with IVA and CCAdj 2,349.5 −208.9 499.6 −31.4 55.2 −10.3 27.4 −1.4 2.4
2 Domestic industries 1,925.9 −119.4 448.3 −30.7 65.8 −7.6 31.1 −1.6 3.5
3 Financial 480.9 26.5 12.1 17.5 −6.4 6.1 2.6 3.7 −1.3
4 Nonfinancial 1,445.0 −145.9 436.2 −48.2 72.1 −12.9 44.3 −3.4 5.3
5 Rest of the world 423.6 −89.5 51.3 −0.7 −10.6 −18.9 13.4 −0.2 −2.4
6 Receipts from the rest of the world 832.2 −134.5 113.0 29.0 34.2 −17.0 17.2 3.8 4.3
7 Less: Payments to the rest of the world 408.7 −45.0 61.7 29.7 44.8 −14.2 22.7 8.9 12.3
                     
9 Less: Taxes on corporate income 365.6 −18.8 70.5 35.6 22.8 −7.3 29.8 11.6 6.6
                     
10 Equals: Profits after tax 1,983.8 −190.1 429.1 −67.0 32.4 −10.7 27.0 −3.3 1.7
11 Net dividends 1,337.6 −15.0 −19.5 30.4 −37.8 −1.1 −1.4 2.3 −2.8
12 Undistributed profits from current production 646.2 −175.1 448.6 −97.4 70.2 −43.8 199.5 −14.5 12.2
                     
13 Net cash flow with IVA 2,636.3 −219.4 518.5 −75.6 91.5 −9.5 24.7 −2.9 3.6
CCAdj
Capital consumption adjustment
IVA
Inventory valuation adjustment

Note. Levels of these and other profits series are shown in National Income and Product Account tables 1.12 and 6.16D.

Industry profits (corporate profits by industry with IVA) increased $54.4 billion, or 2.4 percent at a quarterly rate, in the first quarter of 2021 after decreasing $28.5 billion, or 1.2 percent, in the fourth quarter (table 7 and chart 7). The increase reflected increases in “other” nonfinancial industries (more than accounted for by mining), retail trade, and manufacturing industries.

Profits after tax (without IVA and CCAdj)—BEA's profits measure that is conceptually most like the profits for companies in the Standard & Poor's 500 Index—increased $145.3 billion in the first quarter.

Table 7. Corporate Profits by Industry
[Seasonally adjusted]
Line Series Billions of dollars (annual rate) Percent change from preceding quarter (quarterly rate)
Level Change from preceding quarter
2021 2020 2021 2020 2021
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
  Industry profits:                  
1 Corporate profits with IVA 2,367.9 −209.2 497.7 −28.5 54.4 −10.2 27.0 −1.2 2.4
2 Domestic industries 1,944.3 −119.7 446.4 −27.8 65.0 −7.6 30.6 −1.5 3.5
3 Financial 494.7 26.3 12.3 18.7 −7.4 5.9 2.6 3.9 −1.5
4 Nonfinancial 1,449.6 −146.1 434.1 −46.5 72.4 −12.9 43.9 −3.3 5.3
5 Utilities 34.2 6.5 −3.3 6.9 1.6 28.9 −11.4 26.9 4.8
6 Manufacturing 351.4 −104.7 110.8 22.1 21.0 −34.6 56.1 7.2 6.3
7 Wholesale trade 103.0 −6.9 15.3 −8.3 −5.4 −6.4 15.0 −7.1 −5.0
8 Retail trade 267.4 38.0 40.3 −3.0 25.0 22.8 19.6 −1.2 10.3
9 Transportation and warehousing 30.4 −18.6 14.7 0.0 −3.5 −49.2 76.6 0.1 −10.4
10 Information 157.1 −17.2 26.9 12.5 8.2 −13.6 24.5 9.2 5.5
11 Other nonfinancial 506.2 −43.2 229.5 −76.7 25.5 −11.6 70.0 −13.8 5.3
12 Rest of the world 423.6 −89.5 51.3 −0.7 −10.6 −18.9 13.4 −0.2 −2.4
  Addenda:
13 Profits before tax (without IVA and CCAdj) 2,593.4 −200.8 632.3 −0.8 168.0 −10.1 35.2 0.0 6.9
14 Profits after tax (without IVA and CCAdj) 2,227.7 −182.0 561.8 −36.4 145.3 −10.5 36.1 −1.7 7.0
15 IVA −225.5 −8.4 −134.5 −27.7 −113.7 ...... ...... ...... ......
16 CCAdj −18.4 0.3 1.9 −2.9 0.8 ...... ...... ...... ......
CCAdj
Capital consumption adjustment
IVA
Inventory valuation adjustment

Note. Levels of these and other profits series are shown in National Income and Product Account tables 1.12, 1.14, 1.15, and 6.16D.

Chart 7. Corporate Profits with Inventory Valuation Adjustment in 2021:Q1, Change from Preceding Quarter

[Click chart to expand]

 

 

  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 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.
  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.”