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EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, Wednesday, December 22, 2021

BEA 21-67

Gross Domestic Product (Third Estimate), Corporate Profits (Revised Estimate), and GDP by Industry, Third Quarter 2021

Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the third quarter of 2021 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 6.7 percent.

The “third” estimate of GDP released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 2.1 percent. The update primarily reflects upward revisions to personal consumption expenditures (PCE) and private inventory investment that were partly offset by a downward revision to exports. Imports, which are a subtraction in the calculation of GDP, were revised down (refer to "Updates to GDP").

Real GDP: Percent change from preceding quarter

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

The increase in third quarter GDP reflected the continued economic impact of the COVID-19 pandemic. A resurgence of COVID-19 cases resulted in new restrictions and delays in the reopening of establishments in some parts of the country. Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the third quarter because the impacts are generally embedded in source data and cannot be separately identified. For more information, refer to the Technical Note and Federal Recovery Programs and BEA Statistics.

The increase in real GDP in the third quarter reflected increases in private inventory investment, PCE, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in exports, residential fixed investment, and federal government spending. Imports increased (table 2).

The increase in private inventory investment reflected increases in wholesale trade (led by nondurable goods industries) and in retail trade (led by motor vehicles and parts dealers). The increase in PCE reflected an increase in services that was partly offset by a decrease in goods. Within services, increases were widespread with the largest contributions coming from “other” services (mainly international travel) and transportation services. The decrease in goods primarily reflected a decrease in spending on motor vehicles and parts. The increase in state and local government spending was led by employee compensation (notably, education). The increase in nonresidential fixed investment reflected an increase in intellectual property products (led by software and research and development) that was partly offset by decreases in equipment and structures.

The decrease in residential fixed investment primarily reflected decreases in improvements and in new single-family structures. The decrease in federal government spending primarily reflected a decrease in nondefense spending on intermediate goods and services after the processing and administration of Paycheck Protection Program loan applications by banks on behalf of the federal government ended in the second quarter. The decrease in exports reflected decreases in both goods and services. The increase in imports primarily reflected an increase in services (led by travel and transport).

The deceleration in real GDP in the third quarter was more than accounted for by a slowdown in PCE. From the second quarter to the third quarter, spending for goods turned down (led by motor vehicles and parts) and services decelerated (led by food services and accommodations).

Current dollar GDP increased 8.4 percent at an annual rate, or $461.3 billion, in the third quarter to a level of $23.20 trillion. In the second quarter, GDP increased 13.4 percent, or $702.8 billion (table 1 and table 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 5.6 percent in the third quarter, compared with an increase of 5.8 percent in the second quarter (table 4). The PCE price index increased 5.3 percent, compared with an increase of 6.5 percent. Excluding food and energy prices, the PCE price index increased 4.6 percent, compared with an increase of 6.1 percent.

Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI) increased 5.8 percent in the third quarter, compared with an increase of 4.3 percent in the second quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 4.1 percent in the third quarter, compared with an increase of 5.5 percent in the second quarter (table 1).

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $96.9 billion in the third quarter, compared with an increase of $267.8 billion in the second quarter (table 10).

Profits of domestic financial corporations increased $14.2 billion in the third quarter, compared with an increase of $52.8 billion in the second quarter. Profits of domestic nonfinancial corporations increased $31.6 billion, compared with an increase of $221.3 billion. Rest-of-the-world profits increased $51.1 billion, in contrast to a decrease of $6.2 billion. In the third quarter, receipts increased $65.2 billion, and payments increased $14.1 billion.

Updates to GDP

In the third estimate of the third quarter, real GDP increased 2.3 percent, 0.2 percentage point higher than in the second estimate. Upward revisions to PCE (specifically, an upward revision to services), private inventory investment (both farm and nonfarm), residential fixed investment, state and local government spending, and nonresidential fixed investment were partly offset by downward revisions to exports and federal government spending. Imports were revised down. For more information, refer to the Technical Note and the "Additional Information" section that follows.


	Advance Estimate	Second Estimate	Third Estimate
	(Percent change from preceding quarter)
Real GDP	2.0	2.1	2.3
Current-dollar GDP	7.8	8.1	8.4
Real GDI	…	6.7	5.8
Average of Real GDP and Real GDI	…	4.4	4.1
Gross domestic purchases price index	5.4	5.5	5.6
PCE price index	5.3	5.3	5.3
PCE price index excluding food and energy	4.5	4.5	4.6

Real GDP by Industry

Today’s release includes estimates of GDP by industry, or value added—a measure of an industry’s contribution to GDP. In the third quarter, private services-producing industries increased 3.9 percent, government increased 5.1 percent, and private goods-producing industries decreased 5.5 percent (table 12). Overall, 14 of 22 industry groups contributed to the third-quarter increase in real GDP.

Real GDP by Sector: Percent change from preceding period

The increase in private services-producing industries primarily reflected increases in professional, scientific, and technical services; finance and insurance (led by securities, commodity contracts, and investments); accommodation and food services; administrative and waste management services (led by administrative and support services); and information (led by motion picture and sound recording industries). These increases were partly offset by decreases in retail trade (led by motor vehicle and parts dealers) and wholesale trade.

The decrease in private goods-producing industries was widespread, led by construction.

The increase in government primarily reflected an increase in state and local government.

Contributions to Percent Change in Real GDP by Industry Group, 2021:Q2

Gross Output by Industry

Real gross output—principally a measure of an industry’s sales or receipts, adjusted for price change, which includes sales to final users in the economy (GDP) and sales to other industries (intermediate inputs)—increased 4.4 percent in the third quarter. Private services-producing industries increased 7.6 percent, government increased 0.3 percent, and private goods-producing industries decreased 2.5 percent (table 16). Overall, 14 of 22 industry groups contributed to the increase in real gross output.

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Next release, January 27, 2022 at 8:30 A.M. EST
Gross Domestic Product, Fourth Quarter 2021 (Advance Estimate) and Year 2021

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Release Dates in 2022
Estimate	2021 Q4 and Year 2021	2022 Q1	2022 Q2	2022 Q3
Gross Domestic Product
Advance Estimate	January 27, 2022	April 28, 2022	July 28, 2022	October 27, 2022
Second Estimate	February 24, 2022	May 26, 2022	August 25, 2022	November 30, 2022
Third Estimate	March 30, 2022	June 29, 2022	September 29, 2022	December 22, 2022

Gross Domestic Product by Industry	March 30, 2022	June 29, 2022	September 29, 2022	December 22, 2022

Corporate Profits
Preliminary Estimate	---	May 26, 2022	August 25, 2022	November 30, 2022
Revised Estimate	March 30, 2022	June 29, 2022	September 29, 2022	December 22, 2022

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)

Paycheck Protection Program Subsidies by Industry in the National Accounts (PDF)

Paycheck Protection Program Subsidies by Industry in the National Accounts (Excel)

Revision Information

GDP

Karl Rohrer

(301) 278-9083

gdpniwd@bea.gov

Corporate Profits

Kate Pinard

(301) 278-9417

cpniwd@bea.gov

News Media

Jeannine Aversa

(301) 278-9003

Jeannine.Aversa@bea.gov

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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, refer to 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, refer to 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, refer to 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, refer to 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 1996 through 2020. For more information on GDP updates, refer to 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.