GDP and the Economy

Advance Estimates for the Second Quarter of 2023

August 2, 2023

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Real gross domestic product (GDP) increased at an annual rate of 2.4 percent in the second quarter of 2023, according to the “advance” estimates of the National Income and Product Accounts (chart 1 and table 1).1 In the first quarter, real GDP increased 2.0 percent.

Chart 1. Real GDP: Percent Change from Preceding Quarter

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Chart 2. Real GDP: Contributions to the Percent Change in 2023:Q2

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

  • The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributors to the increase were housing and utilities, health care, financial services and insurance, and transportation services. Within goods, the increase was led by recreational goods and vehicles as well as gasoline and other energy goods.
  • The increase in nonresidential fixed investment reflected increases in equipment, structures, and intellectual property products. The increase in equipment was led by transportation equipment, primarily reflecting an increase in trucks, buses, and truck trailers. The increase in structures was led by manufacturing structures. The increase in intellectual property products was led by software.
  • The increase in state and local government spending primarily reflected increases in state and local government employee compensation and gross investment in structures.
  • Within private inventory investment, both farm and nonfarm inventories increased. Within nonfarm, increases in durable wholesale trade, durable-goods manufacturing, and retail trade industries were partly offset by decreases in nondurable goods for wholesale and manufacturing industries.
  • Within exports, a decrease in goods was partly offset by an increase in services. Within goods, the decrease was led by nondurable industrial supplies and materials; consumer goods, except food and automotive; and foods, feeds, and beverages. Within services, the increase was led by travel.
  • The decrease in residential fixed investment was led by a decline in improvements.
  • Within imports, both goods and services decreased. Within goods, the leading contributors to the decrease were nondurable industrial supplies and materials as well as nondurable consumer goods. Within services imports, the leading contributor to the decrease was transport.

Compared to the first quarter, the acceleration in GDP in the second quarter primarily reflected an upturn in private inventory investment and an acceleration in nonresidential fixed investment. These movements were partly offset by a downturn in exports and decelerations in consumer spending, federal government spending, and state and local government spending. Imports turned down.

Real final sales to private domestic purchasers, which measures private demand in the domestic economy and is derived as the sum of consumer spending and private fixed investment, increased 2.3 percent in the second quarter after increasing 3.2 percent in the first quarter.

Table 1. Real Gross Domestic Product 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)
2023 2022 2023 2022 2023
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
1 Gross domestic product (GDP)1 100.0 3.2 2.6 2.0 2.4 3.2 2.6 2.0 2.4
2 Personal consumption expenditures 68.2 2.3 1.0 4.2 1.6 1.54 0.70 2.79 1.12
3 Goods 22.7 −0.4 −0.1 6.0 0.7 −0.08 −0.01 1.34 0.16
4 Durable goods 8.4 −0.8 −1.3 16.3 0.4 −0.07 −0.11 1.28 0.03
5 Nondurable goods 14.3 −0.1 0.6 0.5 0.9 −0.01 0.09 0.07 0.13
6 Services 45.5 3.7 1.6 3.2 2.1 1.63 0.72 1.44 0.95
7 Gross private domestic investment 17.3 −9.6 4.5 −11.9 5.7 −1.80 0.79 −2.22 0.97
8 Fixed investment 17.2 −3.5 −3.8 −0.4 4.9 −0.62 −0.68 −0.08 0.83
9 Nonresidential 13.5 6.2 4.0 0.6 7.7 0.80 0.52 0.08 0.99
10 Structures 2.8 −3.6 15.8 15.8 9.7 −0.09 0.38 0.40 0.26
11 Equipment 5.2 10.6 −3.5 −8.9 10.8 0.53 −0.18 −0.48 0.53
12 Intellectual property products 5.5 6.8 6.2 3.1 3.9 0.36 0.33 0.16 0.21
13 Residential 3.8 −27.1 −25.1 −4.0 −4.2 −1.42 −1.20 −0.16 −0.16
14 Change in private inventories 0.1 --- --- --- --- −1.19 1.47 −2.14 0.14
15 Net exports of goods and services −3.0 --- --- --- --- 2.86 0.42 0.58 −0.12
16 Exports 10.9 14.6 −3.7 7.8 −10.8 1.65 −0.44 0.86 −1.28
17 Goods 7.3 17.8 −7.4 12.3 −16.3 1.38 −0.62 0.91 −1.35
18 Services 3.6 7.5 5.0 −1.3 1.8 0.26 0.18 −0.05 0.07
19 Imports 13.9 −7.3 −5.5 2.0 −7.8 1.21 0.86 −0.28 1.16
20 Goods 11.3 −8.6 −5.9 2.3 −8.0 1.19 0.76 −0.27 0.98
21 Services 2.6 −0.8 −3.7 0.4 −6.8 0.02 0.10 −0.01 0.18
22 Government consumption expenditures and gross investment 17.5 3.7 3.8 5.0 2.6 0.65 0.65 0.85 0.45
23 Federal 6.5 3.7 5.8 6.0 0.9 0.24 0.37 0.38 0.06
24 National defense 3.6 4.7 2.3 2.5 2.5 0.17 0.08 0.09 0.09
25 Nondefense 2.9 2.5 10.6 10.5 −1.1 0.07 0.29 0.29 −0.03
26 State and local 10.9 3.7 2.6 4.4 3.6 0.41 0.29 0.47 0.39
Addenda:
27 Gross domestic income (GDI)2 --- 2.8 −3.3 −1.8 --- --- --- --- ---
28 Average of GDP and GDI --- 3.0 −0.4 0.1 --- --- --- --- ---
29 Final sales of domestic product --- 4.5 1.1 4.2 2.3 --- --- --- ---
30 Goods 31.3 7.3 5.9 −1.4 2.6 2.28 1.83 −0.44 0.84
31 Services 60.5 3.9 2.4 3.5 2.3 2.30 1.44 2.06 1.36
32 Structures 8.2 −14.6 −8.1 4.7 2.6 −1.34 −0.70 0.38 0.21
  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 Accounts (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 U.S. Bureau of Economic Analysis' (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 1.9 percent in the second quarter after increasing 3.8 percent in the first quarter (table 2 and chart 3).

Within gross domestic purchases, food prices decreased less than 0.1 percent in the second quarter after increasing 3.8 percent in the first quarter. Prices for energy goods and services decreased 16.3 percent after decreasing 10.7 percent. Excluding food and energy, gross domestic purchases prices increased 2.6 percent after increasing 4.2 percent.

The price index for personal consumption expenditures (PCE) increased 2.6 percent in the second quarter after increasing 4.1 percent in the first quarter. The increase in PCE prices reflected increases in prices for both services and goods.

  • Within services, price increases were widespread. The leading contributors were housing and utilities (led by housing), health care (led by hospitals), and other services (led by professional and other services). Food services and accommodations (led by food services) and insurance and other financial services (led by banking and other financial services) also increased. Partly offsetting these increases was a decrease in transportation services (led by public transportation).
  • Within goods, the leading contributors to the increase were motor vehicles and parts (led by used light trucks) and other nondurable goods (led by pharmaceuticals). These increases were partly offset by a decrease in gasoline and other energy goods (led by gasoline).

Excluding food and energy, the “core” PCE price index increased 3.8 percent in the second quarter after increasing 4.9 percent in the first quarter.

Chart 3. Prices for Gross Domestic Purchases

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Table 2. 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)
2022 2023 2022 2023
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
1 Gross domestic purchases1 4.8 3.6 3.8 1.9 4.8 3.6 3.8 1.9
2 Personal consumption expenditures 4.3 3.7 4.1 2.6 2.85 2.46 2.71 1.73
3 Goods 2.7 −0.5 0.7 0.4 0.64 −0.10 0.17 0.09
4 Durable goods 3.5 −1.5 −1.0 0.6 0.29 −0.12 −0.07 0.05
5 Nondurable goods 2.3 0.1 1.7 0.3 0.35 0.02 0.25 0.04
6 Services 5.2 6.0 5.9 3.8 2.22 2.56 2.54 1.65
7 Gross private domestic investment 7.6 3.3 4.5 0.7 1.30 0.57 0.76 0.13
8 Fixed investment 7.7 4.0 4.9 0.7 1.28 0.67 0.81 0.13
9 Nonresidential 7.6 3.6 7.2 1.2 0.94 0.46 0.91 0.15
10 Structures 20.1 7.7 8.6 3.5 0.45 0.19 0.22 0.09
11 Equipment 5.9 6.1 7.6 −1.4 0.29 0.31 0.37 −0.07
12 Intellectual property products 3.7 −0.6 6.1 2.5 0.19 −0.03 0.32 0.13
13 Residential 8.1 5.1 −2.5 −0.7 0.34 0.20 −0.10 −0.03
14 Change in private inventories --- --- --- --- 0.02 −0.10 −0.05 0.00
15 Government consumption expenditures and gross investment 3.6 3.6 1.6 0.4 0.62 0.61 0.28 0.07
16 Federal 4.8 3.2 3.2 2.6 0.30 0.20 0.20 0.16
17 National defense 2.7 3.0 2.5 2.3 0.10 0.10 0.09 0.08
18 Nondefense 7.6 3.4 4.1 3.0 0.20 0.09 0.11 0.08
19 State and local 2.9 3.9 0.7 −0.9 0.32 0.41 0.08 −0.10
  Addenda:
  Gross domestic purchases:                
20 Food 13.4 7.1 3.8 0.0 0.60 0.33 0.18 0.00
21 Energy goods and services −13.1 −13.9 −10.7 −16.3 −0.43 −0.46 −0.33 −0.47
22 Excluding food and energy 5.0 4.1 4.2 2.6 4.59 3.77 3.90 2.40
  Personal consumption expenditures:                
23 Food and beverages purchased for off-premises consumption 13.0 6.9 3.7 −0.1 --- --- --- ---
24 Energy goods and services −13.3 −12.8 −9.9 −16.1 --- --- --- ---
25 Excluding food and energy 4.7 4.4 4.9 3.8 --- --- --- ---
26 Gross domestic product 4.4 3.9 4.1 2.2 --- --- --- ---
27 Exports of goods and services −9.7 −6.1 0.2 −3.6 --- --- --- ---
28 Imports of goods and services −4.1 −5.5 −1.6 −4.2 --- --- --- ---
  1. The estimated prices for gross domestic purchases under the contribution columns are also percent changes.

Note. Most percent changes are from National Income and Product Accounts (NIPA) table 1.6.7; percent changes for personal consumption expenditures (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.

Measured in current dollars, personal income increased $236.1 billion in the second quarter, compared to an increase of $278.0 billion in the first quarter (table 3). The increase in the second quarter reflected increases in compensation (led by private wages and salaries), personal income receipts on assets, rental income of persons, and personal current transfer receipts.

Personal current taxes decreased $12.1 billion in the second quarter after decreasing $310.0 billion in the first quarter.

Current-dollar disposable personal income (DPI) increased $248.2 billion, or 5.2 percent, in the second quarter after increasing $587.9 billion, or 12.9 percent, in the first quarter. Personal outlays increased $219.5 billion after increasing $395.0 billion in the first quarter.

Real DPI (chart 4) increased 2.5 percent in the second quarter after increasing 8.5 percent in the first quarter. Current-dollar DPI is deflated by the implicit price deflator for consumer spending, which increased 2.6 percent in the second quarter after increasing 4.1 percent in the first quarter.

The personal saving rate (chart 5)—personal saving as a percentage of DPI—was 4.4 percent in the second quarter, compared with 4.3 percent in the first quarter.

Chart 4. Real Disposable Personal Income

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Chart 5. Personal Saving Rate

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Table 3. Personal Income and Its Disposition
[Billions of dollars; quarterly estimates are seasonally adjusted at annual rates]
Line Series Level Change from preceding period
2023 2022 2023
Q1 Q2 Q3 Q4 Q1 Q2
1 Personal income 22,519.2 22,755.3 391.2 271.8 278.0 236.1
2 Compensation of employees 13,985.5 14,167.3 339.8 73.1 157.4 181.8
3 Wages and salaries 11,545.6 11,701.3 303.0 52.9 131.7 155.8
4 Private industries 9,877.9 10,006.1 279.6 33.4 107.3 128.2
5 Goods-producing industries 1,814.2 1,840.6 48.9 11.4 21.2 26.4
6 Manufacturing 1,061.0 1,075.1 27.2 −0.6 6.4 14.1
7 Services-producing industries 8,063.7 8,165.5 230.7 22.0 86.1 101.8
8 Trade, transportation, and utilities 1,776.4 1,789.0 47.3 2.8 25.4 12.6
9 Other services-producing industries 6,287.3 6,376.5 183.4 19.3 60.7 89.2
10 Government 1,667.6 1,695.2 23.4 19.5 24.4 27.5
11 Supplements to wages and salaries 2,440.0 2,466.0 36.8 20.2 25.8 26.0
12 Proprietors' income with IVA and CCAdj 1,909.5 1,905.6 28.2 19.3 26.6 −3.9
13 Farm 96.7 86.0 0.3 4.9 −4.2 −10.7
14 Nonfarm 1,812.8 1,819.6 27.9 14.4 30.8 6.8
15 Rental income of persons with CCAdj 845.0 864.0 19.0 16.8 33.2 19.0
16 Personal income receipts on assets 3,452.6 3,494.5 35.8 65.2 28.6 41.9
17 Personal interest income 1,808.1 1,832.5 29.5 50.9 19.1 24.4
18 Personal dividend income 1,644.5 1,662.1 6.3 14.3 9.5 17.5
19 Personal current transfer receipts 4,057.5 4,073.8 9.6 105.4 59.2 16.3
20 Government social benefits to persons 3,986.2 4,001.6 13.9 105.7 57.5 15.4
21 Social security 1,340.1 1,353.5 7.7 11.0 114.5 13.4
22 Medicare 960.5 967.3 8.5 21.4 18.8 6.9
23 Medicaid 839.4 873.8 −3.3 10.1 43.1 34.4
24 Unemployment insurance 22.8 23.1 −0.1 1.8 2.4 0.3
25 Veterans' benefits 166.2 167.0 2.0 2.3 2.2 0.7
26 Other 657.3 616.8 −1.0 59.1 −123.5 −40.4
27 Other current transfer receipts, from business (net) 71.3 72.2 −4.2 −0.3 1.8 0.9
28 Less: Contributions for government social insurance 1,730.8 1,749.9 41.2 8.1 27.1 19.1
29 Less: Personal current taxes 2,906.2 2,894.0 48.0 −20.3 −310.0 −12.1
30 Equals: Disposable personal income 19,613.1 19,861.3 343.2 292.1 587.9 248.2
31 Less: Personal outlays 18,772.2 18,991.7 325.9 252.7 395.0 219.5
32 Personal consumption expenditures 18,113.1 18,305.3 281.3 207.2 363.2 192.2
33 Personal interest payments1 435.5 462.6 44.1 45.5 32.8 27.2
34 Personal current transfer payments 223.7 223.8 0.5 −0.1 −1.0 0.1
35 Equals: Personal saving 840.9 869.5 17.3 39.5 192.9 28.7
36 Personal saving as a percentage of DPI 4.3 4.4 0.0 0.2 0.9 0.1
CCAdj
Capital consumption adjustment
DPI
Disposable personal income
IVA
Inventory valuation adjustment
  1. Consists of nonmortgage interest paid by households. Note that mortgage interest paid by households is an expense item in the calculation of rental income of persons.

Note. Dollar levels and percent changes are from National Income and Product Account tables 2.1 and 2.2B.

 

  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.”