The 2024 Annual Update of the National Economic Accounts

By Lisa S. Mataloni and Stephanie H. McCulla  |  October 31, 2024

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The U.S. Bureau of Economic Analysis (BEA) released its annual update of the National Economic Accounts (NEAs), which include the National Income and Product Accounts (NIPAs) and the Industry Economic Accounts (IEAs), on September 26. The Regional Economic Accounts (REAs) are harmonized with the NEAs, so improvements incorporated as part of the NEA annual update also impacted the regional statistics. The annual update of the REAs was released on September 27 and an article detailing the results will appear in the Survey of Current Business.

The update of the NEAs covered the first quarter of 2019 through the first quarter of 2024 and resulted in revisions to gross domestic product (GDP), GDP by industry, gross domestic income (GDI), and related components. The reference year for index numbers and chained-dollar estimates remains 2017.

The impacts of the annual update on the NIPA and IEA estimates are summarized in the tables and charts provided in this article. Refer to “Information on 2024 Annual Updates to National, Industry, and State and Local Economic Accounts” for additional background materials and results. (In particular, the “Summary of Results tables” include detail on quarterly revisions through 2023 and revisions to selected time spans.)

The updated NIPA and IEA estimates reflect the incorporation of newly available and revised source data—the primary driver of this year's revisions—as well as the adoption of improved estimating methods and, for quarterly and monthly measures, the incorporation of updated seasonal adjustment factors.

Major source data incorporated

The major source data incorporated into the NEAs as part of this year's update are summarized in table 1, and additional information on the NIPA components affected by the incorporation of newly available and revised source data is provided in the table “NIPA Revisions: Components Detail and Major Source Data and Conceptual Changes Incorporated, 2019–2023,” available on the “Updates” page on BEA's website.

Source data that affected the estimates include the following:

• New U.S. Census Bureau (Census) Service Annual Survey (SAS) data replaced Census Quarterly Services Survey (QSS) data for 2022, and revised SAS data replaced previously incorporated SAS data for 2019 through 2021. SAS data impacted estimates of consumer spending for services and estimates of private fixed investment in intellectual property products and equipment as well as gross output for private services-producing industries.
• Revised Internal Revenue Service (IRS) tabulations of tax returns for 2021 and new tabulations for 2022 for corporations, sole proprietorships, and partnerships affected estimates of corporate profits, proprietors' income, and net interest, as well as GDP by industry estimates.
• Revised Monthly Survey of Manufacturers' Shipments, Inventories, and Orders data for 2019–2023 impacted estimates of private investment in equipment and inventories as well as gross output for manufacturing industries.¹
• New Census Annual Retail Trade Survey (ARTS) data for 2022 replaced Census Monthly Retail Trade Survey (MRTS) data; these data and revised ARTS data for 2019–2021 impacted estimates of consumer spending for goods and private inventory investment in the NIPAs and estimates of retail trade output in the IEAs.
• Revised U.S. Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages (QCEW) data for 2019–2023 impacted estimates of private and government compensation.
• Revised U.S. Department of Agriculture (USDA) farm statistics for 2019–2023 impacted estimates of farm output, inventory investment, and proprietors' income.
• Revised BEA International Transactions Accounts (ITAs) data for 2019–2023 impacted estimates of exports and imports of goods and services and income flows with the rest of the world.
• Revised Census Annual Survey of State and Local Government Finances (GF) for fiscal years 2019–2021 and newly available GF data for 2022 impacted estimates of state and local government spending.

Methodology improvements²

The annual update incorporated improvements to estimating methodologies and to the presentation of the estimates, including the following:

• Improved territorial adjustment for trade in services with Puerto Rico. Beginning with the first quarter of 2019, quarterly and annual measures of the territorial adjustment for trade in services are now prepared using exports and imports of services data from BEA's Puerto Rico GDP estimates. Previously, the territorial adjustment for trade in services with Puerto Rico was based on balance-of-payments data from Puerto Rico. This change improves the accuracy of the estimates and better aligns the NIPAs with BEA's Puerto Rico GDP estimates.
• Replacement of source data. Beginning with 2021, BEA now uses data from Census' Value of Construction Put in Place (VPIP) Survey to define investment in new structures by state and local governments. This investment was previously defined using GF data, but that survey no longer provides this detail and instead consolidates data on capital outlays.
• Improved classification of financial assistance. BEA now records the financial assistance provided in 2022 and 2023 by the federal government to extend the solvency of financially troubled multiemployer pension plans, as authorized by the American Rescue Plan Act of 2021, as capital transfers to business. Previously, this assistance was recorded as financial transactions. Additionally, a new line, “net transfers from other sources,” has been added to the following tables:
• NIPA table 7.20, “Transactions of Defined Benefit and Defined Contribution Pension Plans”
• NIPA table 7.21, “Transactions of Defined Benefit Pension Plans”
• NIPA table 7.22, “Transactions of Private Defined Benefit Pension Plans”

GDP and expenditure components

In general, the picture of the economy shown by the updated estimates is similar to the picture previously published (table 2). Over the recent period from 2018 to 2023, the average annual rate of change in real GDP is 2.3 percent, 0.2 percentage point higher than in previously published estimates (chart 1).

Details on the revisions to the percent change in real GDP are presented in table 3A, and details on the contributions to those revisions are presented in table 3B. Details on revisions, and contributions to revisions, for each expenditure component of real GDP are presented in appendix A (tables A1–A12). As noted above, the major source data incorporated for each component of GDP and GDI are presented in the annual update table “NIPA Revisions: Components Detail and Major Source Data and Conceptual Changes Incorporated, 2017–2021.”

The percent change in real GDP was revised up for 2019, 2021, 2022, and 2023 and was unrevised for 2020 (chart 2).

• For 2019, the increase in real GDP was revised up 0.1 percentage point, from 2.5 percent to 2.6 percent, primarily reflecting an upward revision to consumer spending (that is, personal consumption expenditures, or PCE) for services, based on revised Census data from the SAS and from the American Community Survey (ACS) (table 2).
• For 2020, the decrease in real GDP was the same as previously published, at 2.2 percent, primarily reflecting upward revisions to government spending and private fixed investment that were offset by a downward revision to consumer spending. The revision to government spending primarily reflects an upward revision to state and local government spending for services, based on revised GF data. The revision to private fixed investment primarily reflects an upward revision to residential investment, based on revised Circana sales data for home improvement products. The downward revision to consumer spending mainly reflects spending for computer software and accessories, based on revised ARTS data as well as the Census E-Commerce Report.
• For 2021, the increase in real GDP was revised up 0.3 percentage point, from 5.8 percent to 6.1 percent, led by an upward revision to consumer spending for financial services indirectly measured, based primarily on revised data on operating expenses from the IRS Statistics of Income (SOI) program.
• For 2022, the increase in real GDP was revised up 0.6 percentage point, from 1.9 percent to 2.5 percent, led by upward revisions to consumer spending and nonresidential fixed investment. The upward revision to consumer spending primarily reflects a revision to housing, based on newly available ACS data, as well as revisions to health care, the gross output of nonprofit institutions serving households, financial services and insurance (mainly insurance), and recreation services, based on newly available SAS data. The upward revision to nonresidential fixed investment primarily reflects a revision to manufacturing construction, based on revised VPIP data.
• For 2023, the percent change in real GDP was revised up 0.4 percentage point, from 2.5 percent to 2.9 percent, led by upward revisions to private fixed investment and consumer spending. Within private fixed investment, the revision primarily reflects upward revisions to equipment (mainly transportation equipment), based on newly available trade source data, and to intellectual property products (mainly research and development, or R&D), based on revised QSS revenues data and on newly available financial reports on R&D expenses. Within consumer spending, the revision primarily reflects an upward revision to financial services, based on new Investment Company Institute data on regulated investment company operating expenses, as well as upward revisions to several categories of spending based on revised QSS data.

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Prices

Revisions to BEA's various price measures, such as gross domestic purchases, GDP, and PCE were small and reflect revised and newly available source data and, for the most recent year (2023), the regular incorporation of annual weights (tables 4A–4B). Over the recent period, from 2018 to 2023, the average annual growth rate in prices for gross domestic purchases—a measure of the prices paid by consumers, businesses, and governments—is 3.4 percent, the same as previously published. The revisions to the percent change in prices and price contributions are presented in tables 4A and 4B, respectively.

Income

Revisions to the components of national income and GDI primarily reflect the incorporation of revised IRS SOI data, new and revised QCEW data, revised ITA data, and data from the U.S. Department of the Treasury (Treasury). Revisions are most notable for 2021–2023 (chart 3 and table 5).

• The upward revision for 2021 primarily reflects upward revisions to corporate profits and proprietors' income, based on revised SOI data, and to taxes on production and imports, based on revised Census data from the Annual Survey of State Government Tax Collections. These revisions were partly offset by an upward revision to subsidies (which are a deduction in the calculation of national income), based on revised Office of Management and Budget (OMB) fiscal year budget data on claims for the employee retention tax credit, as well as downward revisions to rental income of persons and net interest.
• The upward revision for 2022 reflects upward revisions to corporate profits and proprietors' income, based on new SOI tabulations of tax return data.
• The upward revision for 2023 reflects upward revisions to corporate profits, net interest, and proprietors' income that were partly offset by a downward revision to compensation. The revision to corporate profits primarily reflects revised Census Quarterly Financial Report data, regulatory agency data, and profits data from public financial reports. The revisions to net interest and to proprietors' income primarily reflect newly available SOI data for 2022 and revised indicator data. The revision to compensation primarily reflects revised QCEW data as well as new Census data on wages paid to tipped employees and new BLS data on wages not covered by the QCEW program.

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The update had a notable impact on the statistical discrepancy (chart 4 and table 6). In theory, GDI should equal GDP, but in practice, they differ because their components are estimated using largely independent source data. As shown in chart 4, the discrepancy over the last 20 years is generally less than 1.5 percent of GDP without regard to sign. For 2019–2022, the discrepancy was within that range in the previously published estimates, but it was 1.9 percent in 2023. With the update, the upward revision to GDI exceeded the upward revision to GDP, resulting in a sizeable downward revision to the discrepancy (from $509.7 billion, or 1.9 percent of GDP, to $244.6 billion, or 0.9 percent of GDP).

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Measures of personal income were also impacted by newly available and revised source data (table 7), most notably in 2022 and 2023:

• For 2022, the revision was led by upward revisions to personal current transfer receipts, primarily government social benefits, based on revised OMB fiscal year budget data for refundable tax credits as well as revised Centers for Medicare & Medicaid Services (CMS) data on Medicare benefits; to proprietors' income, based on newly available SOI data for 2022; and to personal income receipts on assets—mainly dividends—also based on newly available SOI data.
• For 2023, the upward revision reflects upward revisions to all components except compensation, which was revised down. The upward revision to personal income receipts on assets reflects revisions to both personal interest income and personal dividend income, based on newly available SOI data for 2022 and revised indicator data. The revision to personal current transfer receipts primarily reflects a revision to government social benefits, led by Medicare benefits, based on newly available and revised CMS data. The revision to proprietors' income was led by nonfarm proprietors, primarily based on newly available SOI data for 2022 and revised indicator data. The downward revision to compensation reflects revised QCEW data.
• The personal saving rate (personal saving as a percentage of disposable personal income) was revised down for 2019, 2020, 2021, and 2022 and was revised up for 2023. For 2019–2021, the upward revisions to personal outlays more than offset the upward revisions to personal income and the downward revisions to personal current taxes. For 2022, both outlays and taxes were revised up, more than offsetting the upward revision to personal income. For 2023, the upward revision to personal income more than offset the upward revisions to personal outlays and taxes.

GDP and GDI

Chart 5 shows revised and previously published percent changes for real GDP from the fourth quarter of 2018 through the first quarter of 2024; the chart excludes 2020 because the magnitude of the pandemic-related changes in GDP in that year obscures the changes in other years. With the updated estimates, the overall pattern of economic growth over this period remains unchanged. In 2020, real GDP decreased 5.5 percent in the first quarter (revised down 0.2 percentage point), decreased 28.1 percent in the second quarter (revised down 0.1 percentage point), increased 35.2 percent in the third quarter (revised up 0.4 percentage point), and increased 4.4 percent in the first quarter (revised up 0.2 percentage point).

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Revisions to quarterly estimates of GDP were led by updated estimates of consumer spending and private fixed investment. The revisions to PCE were based primarily on revised data from the Census QSS and MRTS. The revisions to private fixed investment were based primarily on revised Census VPIP data for investment in structures, revised Federal Reserve Board seasonal factors for equipment investment, and revised National Science Foundation data for R&D investment.

From the fourth quarter of 2018 to the first quarter of 2024, real GDP was revised up 0.2 percentage point, from an increase of 2.2 percent to an increase of 2.4 percent (chart 6). Real GDI over the same period was revised from 1.7 percent to 2.3 percent, and the average of GDP and GDI was revised from 2.0 percent to 2.4 percent (chart 6).

Prices

From the fourth quarter of 2018 to the first quarter of 2024, the average annual rate of change in the price index for gross domestic purchases was 3.4 percent, the same as previously published. Over the same period, the price index for PCE increased 3.4 percent, the same as previously published, and the “core” PCE price index, which excludes food and energy, increased 3.3 percent, revised up 0.1 percentage point from the previously published estimates.

Quarterly revisions in the core PCE price index primarily reflect updated BLS consumer price indexes (chart 7).

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Business cycles

For the period of expansion from the second quarter of 2009 to the fourth quarter of 2019, real GDP increased at an average annual rate of 2.5 percent, revised up 0.1 percentage point from the previously published estimate (chart 8 and table 8). The percent change in real GDP during the pandemic-related recession from the fourth quarter of 2019 to the second quarter of 2020 was unrevised from a decrease of 17.5 percent. The recovery from the second quarter of 2020 to the first quarter of 2024 was stronger than previously estimated, at 5.2 percent, revised up from 4.9 percent.

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The picture of GDP by industry—or value added—which measures an industry's contribution to GDP, was largely unchanged with the annual update. Revisions to annual percent changes in real GDP by industry from 2019 to 2023 are discussed below and presented in chart 9 and table 9. Revisions to industry contributions to the percent change in real GDP are presented in table 10.

Revisions to GDP by industry

The updated estimates reflect upward revisions to goods-producing industries, services-producing industries, and government (chart 9 and table 9). As with the revisions to the NIPAs, the revisions to the IEAs are largely driven by newly available and revised source data.

• For 2019, the increase in real GDP was revised up 0.1 percentage point, from 2.5 percent to 2.6 percent, primarily reflecting upward revisions to private services-producing industries (led by finance, insurance, real estate, and rental and leasing as well as wholesale trade industries). The direction of change was the same as previously published for all 22 major industry groups.
• For 2020, the decrease in real GDP was the same as previously published at 2.2 percent. The direction of change was the same as previously published for all 22 major industry groups.
• For 2021, the increase in real GDP was revised up 0.3 percentage point, from 5.8 percent to 6.1 percent, reflecting upward revisions to private goods-producing industries (led by nondurable goods manufacturing and durable goods manufacturing), and to private services-producing industries (led by professional, scientific, and technical services). The direction of change was the same as previously published for all 22 major industry groups.
• For 2022, the increase in real GDP was revised up 0.6 percentage point, from 1.9 percent to 2.5 percent. The upward revision primarily reflects upward revisions to private services-producing industries (led by real estate and rental and leasing; wholesale trade; and professional, scientific, and technical services) and to private goods-producing industries (led by agriculture, forestry, fishing, and hunting as well as construction). The direction of change was the same as previously published for all 22 major industry groups.
• For 2023, the increase in real GDP was revised up 0.4 percentage point, from 2.5 percent to 2.9 percent. The upward revision mainly reflects upward revisions to private services-producing industries (led by finance and insurance, real estate and rental and leasing, and information) and to government (led by state and local government) that were partly offset by a downward revision to private goods-producing industries (led by construction and durable goods manufacturing). The direction of change was the same as previously published for 19 of 22 major industry groups. Construction decreased 2.3 percent in 2023; in the previously published estimates, it increased 1.0 percent. Durable goods manufacturing decreased 0.9 percent in 2023; in the previously published estimates, it increased 1.7 percent. Nondurable goods manufacturing increased 1.6 percent; in the previously published estimates, it decreased 0.7 percent.

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From 2018 to 2023, the average annual change in real GDP was revised up 0.2 percentage point, from 2.1 to 2.3 percent (chart 10). Over the same period, goods-producing industries were revised up 0.4 percentage point, services-producing industries were revised up 0.3 percentage point, and government was revised up 0.2 percentage point. The direction of change over the period was unrevised for 20 of 22 major industry groups (chart 11). The largest revisions over the period were to mining (revised up from an increase of 1.2 percent to an increase of 4.0 percent) and nondurable goods manufacturing (revised up from a decrease of 0.1 percent to an increase of 1.0).

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Revisions to gross output

Gross output is principally a measure of an industry's sales or receipts, which includes sales to final users in the economy (GDP) and sales to other industries (intermediate inputs). The percent change in real gross output was revised down 0.1 percentage point to 1.8 percent for 2019; revised up 0.2 percentage point to a decrease of 3.1 percent for 2020; revised up 0.3 percentage point to 6.8 percent for 2021; revised up 0.7 percentage point to 3.0 percent for 2022; and revised up 0.2 percentage point to 2.3 percent for 2023 (table 11).