GDP and the Economy

Second Estimates for the Second Quarter of 2023

September 7, 2023

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Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2023, according to the “second” estimate of the National Income and Product Accounts (chart 1 and table 1).1 With the second estimate, real GDP growth was revised down 0.3 percentage point from the advance estimate issued in July. 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 federal government spending that were partly offset by decreases in exports, residential fixed investment, and private inventory 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, transportation services, and health care. 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 increases in trucks, buses, and truck trailers as well as aircraft. The increase in structures was led by manufacturing structures. The increase in intellectual property products was led by research and development.
  • The increase in state and local government spending primarily reflected increases in gross investment in structures and in state and local government employee compensation.
  • The increase in federal government spending primarily reflected an increase in defense spending. The increase in defense spending was led by gross investment in equipment.
  • 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 decrease in brokers' commissions.
  • Within private inventory investment, a decrease in nonfarm inventories was partly offset by an increase in farm inventories. Within nonfarm, decreases in nondurable wholesale trade and nondurable-goods manufacturing were partly offset by an increase in retail trade industries.
  • Within imports, both goods and services decreased. Within goods, the leading contributors to the decrease were consumer goods, except food and automotive; nondurable industrial supplies and materials; and capital goods, except automotive. Within services imports, the leading contributor to the decrease was transport.

Compared to the first quarter, the acceleration in real GDP in the second quarter primarily reflected a smaller decrease 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 and federal government spending. Imports turned down.

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 2.1 3.2 2.6 2.0 2.1
2 Personal consumption expenditures 68.3 2.3 1.0 4.2 1.7 1.54 0.70 2.79 1.14
3 Goods 22.7 −0.4 −0.1 6.0 0.7 −0.08 −0.01 1.34 0.15
4 Durable goods 8.4 −0.8 −1.3 16.3 −0.3 −0.07 −0.11 1.28 −0.02
5 Nondurable goods 14.3 −0.1 0.6 0.5 1.2 −0.01 0.09 0.07 0.17
6 Services 45.6 3.7 1.6 3.2 2.2 1.63 0.72 1.44 0.99
7 Gross private domestic investment 17.2 −9.6 4.5 −11.9 3.3 −1.80 0.79 −2.22 0.57
8 Fixed investment 17.2 −3.5 −3.8 −0.4 3.9 −0.62 −0.68 −0.08 0.66
9 Nonresidential 13.4 6.2 4.0 0.6 6.1 0.80 0.52 0.08 0.80
10 Structures 2.8 −3.6 15.8 15.8 11.2 −0.09 0.38 0.40 0.30
11 Equipment 5.1 10.6 −3.5 −8.9 7.7 0.53 −0.18 −0.48 0.38
12 Intellectual property products 5.5 6.8 6.2 3.1 2.2 0.36 0.33 0.16 0.12
13 Residential 3.8 −27.1 −25.1 −4.0 −3.6 −1.42 −1.20 −0.16 −0.14
14 Change in private inventories 0.0 --- --- --- --- −1.19 1.47 −2.14 −0.09
15 Net exports of goods and services −3.0 --- --- --- --- 2.86 0.42 0.58 −0.22
16 Exports 11.0 14.6 −3.7 7.8 −10.6 1.65 −0.44 0.86 −1.26
17 Goods 7.3 17.8 −7.4 12.3 −16.4 1.38 −0.62 0.91 −1.36
18 Services 3.6 7.5 5.0 −1.3 2.6 0.26 0.18 −0.05 0.09
19 Imports 14.0 −7.3 −5.5 2.0 −7.0 1.21 0.86 −0.28 1.04
20 Goods 11.4 −8.6 −5.9 2.3 −7.2 1.19 0.76 −0.27 0.87
21 Services 2.6 −0.8 −3.7 0.4 −6.2 0.02 0.10 −0.01 0.17
22 Government consumption expenditures and gross investment 17.5 3.7 3.8 5.0 3.3 0.65 0.65 0.85 0.58
23 Federal 6.5 3.7 5.8 6.0 1.2 0.24 0.37 0.38 0.08
24 National defense 3.6 4.7 2.3 2.5 2.8 0.17 0.08 0.09 0.10
25 Nondefense 2.9 2.5 10.6 10.5 −0.7 0.07 0.29 0.29 −0.02
26 State and local 11.0 3.7 2.6 4.4 4.7 0.41 0.29 0.47 0.50
  Addenda:
27 Gross domestic income (GDI)2 --- 2.8 −3.3 −1.8 0.5 --- --- --- ---
28 Average of GDP and GDI --- 3.0 −0.4 0.1 1.3 --- --- --- ---
29 Final sales of domestic product --- 4.5 1.1 4.2 2.2 --- --- --- ---
30 Goods 31.2 7.3 5.9 −1.4 0.7 2.28 1.83 −0.44 0.23
31 Services 60.6 3.9 2.4 3.5 2.4 2.30 1.44 2.06 1.43
32 Structures 8.2 −14.6 −8.1 4.7 5.0 −1.34 −0.70 0.38 0.40
  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 1.7 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 16.2 percent after decreasing 10.7 percent. Excluding food and energy, gross domestic purchases prices increased 2.4 percent after increasing 4.2 percent.

The price index for personal consumption expenditures (PCE) increased 2.5 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 insurance) also increased. Partly offsetting these increases was a decrease in transportation services (led by air 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 3.7 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 1.7 4.8 3.6 3.8 1.7
2 Personal consumption expenditures 4.3 3.7 4.1 2.5 2.85 2.46 2.71 1.66
3 Goods 2.7 −0.5 0.7 0.4 0.64 −0.10 0.17 0.08
4 Durable goods 3.5 −1.5 −1.0 0.5 0.29 −0.12 −0.07 0.04
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 3.6 2.22 2.56 2.54 1.58
7 Gross private domestic investment 7.6 3.3 4.5 0.6 1.30 0.57 0.76 0.10
8 Fixed investment 7.7 4.0 4.9 0.6 1.28 0.67 0.81 0.10
9 Nonresidential 7.6 3.6 7.2 1.1 0.94 0.46 0.91 0.14
10 Structures 20.1 7.7 8.6 2.4 0.45 0.19 0.22 0.06
11 Equipment 5.9 6.1 7.6 −0.9 0.29 0.31 0.37 −0.05
12 Intellectual property products 3.7 −0.6 6.1 2.4 0.19 −0.03 0.32 0.13
13 Residential 8.1 5.1 −2.5 −1.2 0.34 0.20 −0.10 −0.05
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 −0.2 0.62 0.61 0.28 −0.03
16 Federal 4.8 3.2 3.2 2.4 0.30 0.20 0.20 0.15
17 National defense 2.7 3.0 2.5 2.2 0.10 0.10 0.09 0.08
18 Nondefense 7.6 3.4 4.1 2.6 0.20 0.09 0.11 0.07
19 State and local 2.9 3.9 0.7 −1.6 0.32 0.41 0.08 −0.18
  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 −16.2 −0.43 −0.46 −0.33 −0.47
22 Excluding food and energy 5.0 4.1 4.2 2.4 4.59 3.77 3.90 2.20
  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 −16.0 --- --- --- ---
25 Excluding food and energy 4.7 4.4 4.9 3.7 --- --- --- ---
26 Gross domestic product 4.4 3.9 4.1 2.0 --- --- --- ---
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 $232.1 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 (both personal interest income and personal dividend income), personal current transfer receipts (led by government social benefits), and rental income of persons.

Personal current taxes decreased $52.3 billion in the second quarter after decreasing $310.0 billion in the first quarter.

Current-dollar disposable personal income (DPI) increased $284.5 billion, or 5.9 percent, in the second quarter after increasing $587.9 billion, or 12.9 percent, in the first quarter. Personal outlays increased $233.1 billion after increasing $395.0 billion in the first quarter.

Real DPI (chart 4) increased 3.3 percent in the second quarter after increasing 8.5 percent in the first quarter. DPI is deflated by the implicit price deflator for consumer spending, which increased 2.5 percent after increasing 4.1 percent.

The personal saving rate (chart 5)—personal saving as a percentage of DPI—was 4.5 percent in the second quarter, compared with 4.3 percent in the first quarter.

BEA’s standard practice for first-quarter estimates of wages and salaries is to incorporate data from the U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages (QCEW) program as part of the annual update of the National Economic Accounts. New QCEW data for the first quarter of 2023 will be incorporated into next month's release along with the 2023 comprehensive update of the National Economic Accounts (refer to “Looking Ahead” for details).

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 22,751.3 391.2 271.8 278.0 232.1
2 Compensation of employees 13,985.5 14,163.3 339.8 73.1 157.4 177.8
3 Wages and salaries 11,545.6 11,698.0 303.0 52.9 131.7 152.5
4 Private industries 9,877.9 10,005.8 279.6 33.4 107.3 127.8
5 Goods-producing industries 1,814.2 1,841.8 48.9 11.4 21.2 27.6
6 Manufacturing 1,061.0 1,075.4 27.2 −0.6 6.4 14.4
7 Services-producing industries 8,063.7 8,164.0 230.7 22.0 86.1 100.3
8 Trade, transportation, and utilities 1,776.4 1,789.8 47.3 2.8 25.4 13.4
9 Other services-producing industries 6,287.3 6,374.2 183.4 19.3 60.7 86.9
10 Government 1,667.6 1,692.3 23.4 19.5 24.4 24.6
11 Supplements to wages and salaries 2,440.0 2,465.3 36.8 20.2 25.8 25.3
12 Proprietors' income with IVA and CCAdj 1,909.5 1,908.7 28.2 19.3 26.6 −0.7
13 Farm 96.7 85.2 0.3 4.9 −4.2 −11.5
14 Nonfarm 1,812.8 1,823.6 27.9 14.4 30.8 10.8
15 Rental income of persons with CCAdj 845.0 863.7 19.0 16.8 33.2 18.7
16 Personal income receipts on assets 3,452.6 3,486.3 35.8 65.2 28.6 33.7
17 Personal interest income 1,808.1 1,826.1 29.5 50.9 19.1 18.1
18 Personal dividend income 1,644.5 1,660.2 6.3 14.3 9.5 15.6
19 Personal current transfer receipts 4,057.5 4,079.0 9.6 105.4 59.2 21.5
20 Government social benefits to persons 3,986.2 4,006.8 13.9 105.7 57.5 20.6
21 Social security 1,340.1 1,354.0 7.7 11.0 114.5 13.9
22 Medicare 960.5 967.3 8.5 21.4 18.8 6.9
23 Medicaid 839.4 878.5 −3.3 10.1 43.1 39.2
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 657.3 616.9 −1.0 59.1 −123.5 −40.3
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 1,749.8 41.2 8.1 27.1 18.9
29 Less: Personal current taxes 2,906.2 2,853.8 48.0 −20.3 −310.0 −52.3
30 Equals: Disposable personal income (DPI) 19,613.1 19,897.5 343.2 292.1 587.9 284.5
31 Less: Personal outlays 18,772.2 19,005.3 325.9 252.7 395.0 233.1
32 Personal consumption expenditures 18,113.1 18,301.6 281.3 207.2 363.2 188.5
33 Personal interest payments1 435.5 479.8 44.1 45.5 32.8 44.4
34 Personal current transfer payments 223.7 223.9 0.5 −0.1 −1.0 0.2
35 Equals: Personal saving 840.9 892.3 17.3 39.5 192.9 51.4
36 Personal saving as a percentage of DPI 4.3 4.5 --- --- --- ---
  Addenda:
  Percent change at annual rate            
37 Current-dollar DPI --- --- 3.2 2.5 8.5 3.3
38 Real DPI, chained (2012) dollars --- --- 7.7 6.4 12.9 5.9
CCAdj
Capital consumption adjustment
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.

The increase in second-quarter real GDP was revised down 0.3 percentage point from the advance estimate, reflecting downward revisions to private inventory investment and nonresidential fixed investment that were partly offset by upward revisions to state and local government spending. Imports were revised up.

  • Within private inventory investment, the downward revision was led by wholesale trade industries (mainly nondurable goods).
  • The downward revision to nonresidential fixed investment reflected downward revisions to equipment and intellectual property products.
    • Within equipment, the leading contributors to the downward revision were information processing equipment (notably, computers and peripherals) and industrial equipment (notably, special industry machinery).
    • Within intellectual property products, a downward revision to software was partly offset by an upward revision to entertainment, literary, and artistic originals.
  • The revision to state and local government spending primarily reflected an upward revision to structures investment.
  • Within imports, the leading contributor to the upward revision was nondurable industrial supplies and materials (mainly petroleum and products).
Table 4. Advance and Second Estimates for the Second Quarter of 2023
[Seasonally adjusted at annual rates]
Line Series Change from preceding period
(percent)		 Contribution to percent change in real GDP
(percentage points)
Advance estimate Second estimate Second estimate minus advance estimate Advance estimate Second estimate Second estimate minus advance estimate
1 Gross domestic product (GDP)1 2.4 2.1 −0.3 2.4 2.1 −0.3
2 Personal consumption expenditures 1.6 1.7 0.1 1.12 1.14 0.02
3 Goods 0.7 0.7 0.0 0.16 0.15 −0.01
4 Durable goods 0.4 −0.3 −0.7 0.03 −0.02 −0.05
5 Nondurable goods 0.9 1.2 0.3 0.13 0.17 0.04
6 Services 2.1 2.2 0.1 0.95 0.99 0.04
7 Gross private domestic investment 5.7 3.3 −2.4 0.97 0.57 −0.40
8 Fixed investment 4.9 3.9 −1.0 0.83 0.66 −0.17
9 Nonresidential 7.7 6.1 −1.6 0.99 0.80 −0.19
10 Structures 9.7 11.2 1.5 0.26 0.30 0.04
11 Equipment 10.8 7.7 −3.1 0.53 0.38 −0.15
12 Intellectual property products 3.9 2.2 −1.7 0.21 0.12 −0.09
13 Residential −4.2 −3.6 0.6 −0.16 −0.14 0.02
14 Change in private inventories --- --- --- 0.14 −0.09 −0.23
15 Net exports of goods and services --- --- --- −0.12 −0.22 −0.10
16 Exports −10.8 −10.6 0.2 −1.28 −1.26 0.02
17 Goods −16.3 −16.4 −0.1 −1.35 −1.36 −0.01
18 Services 1.8 2.6 0.8 0.07 0.09 0.02
19 Imports −7.8 −7.0 0.8 1.16 1.04 −0.12
20 Goods −8.0 −7.2 0.8 0.98 0.87 −0.11
21 Services −6.8 −6.2 0.6 0.18 0.17 −0.01
22 Government consumption expenditures and gross investment 2.6 3.3 0.7 0.45 0.58 0.13
23 Federal 0.9 1.2 0.3 0.06 0.08 0.02
24 National defense 2.5 2.8 0.3 0.09 0.10 0.01
25 Nondefense −1.1 −0.7 0.4 −0.03 −0.02 0.01
26 State and local 3.6 4.7 1.1 0.39 0.50 0.11
  Addenda:
27 Final sales of domestic product 2.3 2.2 −0.1 --- --- ---
28 Gross domestic purchases price index 1.9 1.7 −0.2 --- --- ---
29 GDP price index 2.2 2.0 −0.2 --- --- ---
  1. The GDP estimates under the contribution columns are also percent changes.

Measured in current dollars, profits from current production (corporate profits with the inventory valuation adjustment and the capital consumption adjustment) decreased $10.6 billion, or 0.4 percent at a quarterly rate, in the second quarter. In the first quarter, profits decreased $121.5 billion, or 4.1 percent (table 5). Domestic profits of financial corporations decreased $47.8 billion, domestic profits of nonfinancial corporations increased $17.1 billion, and rest-of-the-world profits (net) increased $20.2 billion in the second quarter.

Table 5. Corporate Profits
[Seasonally adjusted]
Line Series Billions of dollars (annual rate) Percent change from preceding quarter (quarterly rate)
Level Change from preceding quarter
2023 2022 2023 2022 2023
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
  Current production measures:                  
1 Corporate profits with IVA and CCAdj 2,807.5 −1.3 −60.5 −121.5 −10.6 0.0 −2.0 −4.1 −0.4
2 Domestic industries 2,328.3 14.3 −81.9 −112.3 −30.8 0.6 −3.2 −4.5 −1.3
3 Financial 346.3 −1.8 −59.0 −9.4 −47.8 −0.4 −12.8 −2.3 −12.1
4 Nonfinancial 1,982.0 16.1 −22.9 −102.9 17.1 0.8 −1.1 −5.0 0.9
5 Rest of the world 479.2 −15.5 21.4 −9.2 20.2 −3.4 4.8 −2.0 4.4
6 Receipts from the rest of the world 1,003.9 1.0 7.2 9.4 18.2 0.1 0.7 1.0 1.8
7 Less: Payments to the rest of the world 524.8 16.5 −14.2 18.6 −2.0 3.3 −2.7 3.7 −0.4
9 Less: Taxes on corporate income 440.2 −21.6 7.3 24.4 −48.5 −4.5 1.6 5.3 −9.9
10 Equals: Profits after tax 2,367.2 20.4 −67.8 −145.9 37.9 0.8 −2.7 −5.9 1.6
11 Net dividends 1,667.6 −56.5 −30.1 −2.2 16.0 −3.2 −1.8 −0.1 1.0
12 Undistributed profits from current production 699.6 76.9 −37.6 −143.7 21.9 9.8 −4.4 −17.5 3.2
13 Net cash flow with IVA 3,187.3 181.6 10.4 −19.2 60.5 6.1 0.3 −0.6 1.9
CCAdj
Capital consumption adjustment
IVA
Inventory valuation adjustment

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

 

  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.”