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EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Thursday, May 27, 2021

BEA 21-22

Gross Domestic Product, 1st Quarter 2021 (Second Estimate); Corporate Profits, 1st Quarter 2021 (Preliminary Estimate)

Real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2020, real GDP increased 4.3 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was also 6.4 percent. Upward revisions to consumer spending and nonresidential fixed investment were offset by downward revisions to exports and private inventory investment. Imports, which are a subtraction in the calculation of GDP, were revised up (see Technical Note).

Real GDP: Percent change from preceding quarter, Q1 2021 (2nd)

COVID-19 Impact on the First-Quarter 2021 GDP Estimate

The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic. In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits, and Paycheck Protection Program loans, were distributed to households and businesses through the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2021 because the impacts are generally embedded in source data and cannot be separately identified. For more information, see the Technical Note and Federal Recovery Program and BEA Statistics.

The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), 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. Imports increased (table 2).

The increase in PCE reflected increases in durable goods (led by motor vehicles and parts), nondurable goods (led by food and beverages), and services (led by food services and accommodations). The increase in nonresidential fixed investment reflected increases in intellectual property products (led by software) and in equipment (led by information processing equipment). The increase in federal government spending primarily reflected an increase in payments made to banks for processing and administering the Paycheck Protection Program loan applications as well as purchases of COVID-19 vaccines for distribution to the public. The decrease in private inventory investment primarily reflected a decrease in retail trade inventories.

Current‑dollar GDP increased 11.0 percent at an annual rate, or $566.3 billion, in the first quarter to a level of $22.06 trillion. In the fourth quarter, GDP increased 6.3 percent, or $324.5 billion (tables 1 and 3). More information on the source data that underlie the estimates is available in the Key Source Data and Assumptions file on BEA's website.

The price index for gross domestic purchases increased 3.9 percent in the first quarter, compared with an increase of 1.7 percent in the fourth quarter (table 4). The PCE price index increased 3.7 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 2.5 percent, compared with an increase of 1.3 percent.

Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI) increased 6.8 percent in the first quarter, compared with an increase of 19.4 percent (revised) in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 6.6 percent in the first quarter, compared with an increase of 11.6 percent (revised) in the fourth quarter (table 1).

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $0.2 billion in the first quarter, compared with a decrease of $31.4 billion in the fourth quarter (table 10).

Profits of domestic financial corporations decreased $3.6 billion in the first quarter, in contrast to an increase of $17.5 billion in the fourth quarter. Profits of domestic nonfinancial corporations increased $12.4 billion, in contrast to a decrease of $48.2 billion. Rest-of-the-world profits decreased $9.0 billion, compared with a decrease of $0.7 billion. In the first quarter, receipts increased $31.0 billion, and payments increased $40.0 billion.

Updates to GDP

In the second estimate for the first quarter, real GDP increased 6.4 percent, the same rate as in the advance estimate. Upward revisions to consumer spending, nonresidential fixed investment, and residential fixed investment were offset by downward revisions to exports, private inventory investment, and state and local government spending. Imports were revised up. For more information, see the Technical Note. For information on updates to GDP, see the "Additional Information" section that follows.

	Advance Estimate	Second Estimate
	(Percent change from preceding quarter)
Real GDP	6.4	6.4
Current-dollar GDP	10.7	11.0
Real GDI	…	6.8
Average of Real GDP and Real GDI	…	6.6
Gross domestic purchases price index	3.8	3.9
PCE price index	3.5	3.7
PCE price index excluding food and energy	2.3	2.5

Updates to Fourth-Quarter Wages and Salaries

In addition to presenting updated estimates for the first quarter, today's release presents revised estimates of fourth-quarter 2020 wages and salaries, personal taxes, and contributions for government social insurance, based on updated data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and salaries are now estimated to have increased $360.5 billion in the fourth quarter, an upward revision of $157.8 billion. With the incorporation of these new data, real gross domestic income is now estimated to have increased 19.4 percent in the fourth quarter, an upward revision of 3.7 percentage points from the previously published estimate.

Annual Update of the National Economic Accounts

BEA will release results from the 2021 annual update of the National Economic Accounts, which includes the National Income and Product Accounts (NIPAs) as well as the Industry Economic Accounts, later this year. Results from the annual update of the NIPAs will be released on July 29, 2021, along with the advance estimate of GDP for the second quarter of 2021. Results from the annual update of the Industry Economic Accounts will be released on September 30, 2021, along with the third estimate of GDP for the second quarter of 2021. The update of the National Economic Accounts will cover the first quarter of 1999 through the first quarter of 2021 and will result in revisions to GDP, GDP by Industry, and gross domestic income. For details, see Information on the 2021 Annual Update of the National Economic Accounts.

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Next release, June 24, 2021 at 8:30 A.M. EDT
Gross Domestic Product (Third Estimate)
Gross Domestic Product by Industry
Corporate Profits (Revised Estimate)
First Quarter 2021

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Full Release & Tables (PDF)

Technical Note (PDF)

Tables Only (Excel)

Release Highlights (PDF)

Historical Comparisons (PDF)

Key source data and assumptions (Excel)

Effects of Selected Federal Pandemic Response Programs on Federal Government Receipts and Expenditures (PDF)

Effects of Selected Federal Pandemic Response Programs on Federal Government Receipts and Expenditures (Excel)

Effects of Selected Federal Pandemic Response Programs on Personal Income (PDF)

Effects of Selected Federal Pandemic Response Programs on Personal Income (Excel)

Revision Information

Personal Income

Karl Rohrer

(301) 278-9083

piniwd@bea.gov

Corporate Profits

Kate Pinard

301-278-9417

cpniwd@bea.gov

Media

Connie O'Connell

301-278-9003

Connie.OConnell@bea.gov

Resources

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Information on COVID-19 and recovery impacts is available on our website.
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Historical time series for these estimates can be accessed in BEA's interactive data application.
Access BEA data by registering for BEA's data application programming interface (API).
For more on BEA's statistics, see our monthly online journal, the Survey of Current Business.
BEA's news release schedule
NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts

Definitions

Gross domestic product (GDP), or value added, is the value of the goods and services produced by the nation's economy less the value of the goods and services used up in production. GDP is also equal to the sum of personal consumption expenditures, gross private domestic investment, net exports of goods and services, and government consumption expenditures and gross investment.

Gross domestic income (GDI) is the sum of incomes earned and costs incurred in the production of GDP. In national economic accounting, GDP and GDI are conceptually equal. In practice, GDP and GDI differ because they are constructed using largely independent source data.

Gross output is the value of the goods and services produced by the nation's economy. It is principally measured using industry sales or receipts, including sales to final users (GDP) and sales to other industries (intermediate inputs).

Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is, at "market value." Also referred to as "nominal estimates" or as "current-price estimates."

Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.

The gross domestic purchases price index measures the prices of final goods and services purchased by U.S. residents.

The personal consumption expenditure price index measures the prices paid for the goods and services purchased by, or on the behalf of, "persons."

Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.

Disposable personal income is the income available to persons for spending or saving. It is equal to personal income less personal current taxes.

Personal outlays is the sum of personal consumption expenditures, personal interest payments, and personal current transfer payments.

Personal saving is personal income less personal outlays and personal current taxes.

The personal saving rate is personal saving as a percentage of disposable personal income.

Profits from current production, referred to as corporate profits with inventory valuation adjustment (IVA) and capital consumption (CCAdj) adjustment in the National Income and Product Accounts (NIPAs), is a measure of the net income of corporations before deducting income taxes that is consistent with the value of goods and services measured in GDP. The IVA and CCAdj are adjustments that convert inventory withdrawals and depreciation of fixed assets reported on a tax-return, historical-cost basis to the current-cost economic measures used in the national income and product accounts. Profits for domestic industries reflect profits for all corporations located within the geographic borders of the United States. The rest-of-the-world (ROW) component of profits is measured as the difference between profits received from ROW and profits paid to ROW.

For more definitions, see the Glossary: National Income and Product Accounts.

Statistical conventions

Annual-vs-quarterly rates. Quarterly seasonally adjusted values are expressed at annual rates, unless otherwise specified. This convention is used for BEA's featured, seasonally adjusted measures to facilitate comparisons with related and historical data. For details, see the FAQ "Why does BEA publish estimates at annual rates?" Quarterly not seasonally adjusted values are expressed only at quarterly rates.

Percent changes. Percent changes in quarterly seasonally adjusted series are displayed at annual rates, unless otherwise specified. For details, see the FAQ "How is average annual growth calculated?" and "Why does BEA publish percent changes in quarterly series at annual rates?" Percent changes in quarterly not seasonally adjusted values are calculated from the same quarter one year ago. All published percent changes are calculated from unrounded data.

Calendar years and quarters. Unless noted otherwise, annual and quarterly data are presented on a calendar basis.

Quantities and prices. Quantities, or "real" volume measures, and prices are expressed as index numbers with a specified reference year equal to 100 (currently 2012). Quantity and price indexes are calculated using a Fisher-chained weighted formula that incorporates weights from two adjacent periods (quarters for quarterly data and annuals for annual data). For details on the calculation of quantity and price indexes, see Chapter 4: Estimating Methods in the NIPA Handbook.

Chained-dollar values are calculated by multiplying the quantity index by the current dollar value in the reference year (2012) and then dividing by 100. Percent changes calculated from real quantity indexes and chained-dollar levels are conceptually the same; any differences are due to rounding. Chained-dollar values are not additive because the relative weights for a given period differ from those of the reference year. In tables that display chained-dollar values, a "residual" line shows the difference between the sum of detailed chained-dollar series and its corresponding aggregate.

Updates to GDP

BEA releases three vintages of the current quarterly estimate for GDP: "Advance" estimates are released near the end of the first month following the end of the quarter and are based on source data that are incomplete or subject to further revision by the source agency; "second" and "third" estimates are released near the end of the second and third months, respectively, and are based on more detailed and more comprehensive data as they become available.

The table below shows the average revisions to the quarterly percent changes in real GDP between different estimate vintages, without regard to sign.

Vintage	Average Revision Without Regard to Sign (percentage points, annual rates)
Advance to second	0.5
Advance to third	0.6
Second to third	0.3
Note - Based on estimates from 1993 through 2019. For more information on GDP updates, see Revision Information on the BEA Website.

Annual and comprehensive updates are typically released in late July. Annual updates generally cover at least the 5 most recent calendar years (and their associated quarters) and incorporate newly available major annual source data as well as some changes in methods and definitions to improve the accounts. Comprehensive (or benchmark) updates are carried out at about 5-year intervals and incorporate major periodic source data, as well as major conceptual improvements.

Unlike GDP, advance current quarterly estimates of GDI and corporate profits are not released because data on domestic profits and on net interest of domestic industries are not available. For fourth quarter estimates, these data are not available until the third estimate.

GDP by industry and gross output estimates are released with the third estimate of GDP.