Real gross domestic product (GDP) increased at an annual rate of 7.0 percent in the fourth quarter of 2021 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.3 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 6.9 percent. The updated estimates primarily reflected upward revisions to nonresidential fixed investment, state and local government spending, and residential fixed investment that were partly offset by downward revisions to personal consumption expenditures (PCE) and exports (refer to "Updates to GDP").

The increase in real GDP primarily reflected increases in private inventory investment, exports, PCE, and nonresidential fixed investment that were partly offset by decreases in both federal and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The increase in private inventory investment was led by retail and wholesale trade industries. Within retail, inventory investment by motor vehicle dealers was the leading contributor. The increase in exports reflected increases in both goods and services. The increase in exports of goods was widespread, and the leading contributors were consumer goods, foods, feeds, and beverages, as well as industrial supplies and materials. The increase in exports of services was led by travel. The increase in PCE primarily reflected an increase in services, led by health care, financial services and insurance, and transportation. The increase in nonresidential fixed investment primarily reflected an increase in intellectual property products that was partly offset by a decrease in structures.

The decrease in federal government spending primarily reflected a decrease in defense spending on intermediate goods and services. The decrease in state and local government spending reflected a decrease in gross investment (led by new educational structures). The increase in imports primarily reflected an increase in goods (led by non-food and non-automotive consumer goods, as well as capital goods).

Real GDP accelerated in the fourth quarter, increasing 7.0 percent after increasing 2.3 percent in the third quarter. The acceleration in real GDP primarily reflected upturns in exports and residential investment, and accelerations in private inventory investment and consumer spending, that were partly offset by a downturn in state and local government spending. Imports accelerated.

Current dollar GDP increased 14.6 percent at an annual rate, or $806.2 billion, in the fourth quarter to a level of $24.01 trillion. In the third quarter, GDP increased 8.4 percent, or $461.3 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.

The price index for gross domestic purchases increased 7.0 percent in the fourth quarter, an upward revision of 0.1 percentage point (table 4). The PCE price index increased 6.3 percent, a downward revision of 0.2 percentage point. Excluding food and energy prices, the PCE price index increased 5.0 percent, an upward revision of 0.1 percentage point.

Updates to GDP

The increase in fourth-quarter real GDP was revised up 0.1 percentage point from the “advance” estimate. The updated estimates reflected upward revisions to nonresidential fixed investment, state and local government spending, and residential fixed investment that were partly offset by downward revisions to consumer spending, exports, and federal government spending. Imports were revised down. For more information, refer to the Technical Note. For information on updates to GDP, refer to the "Additional Information" section that follows.

Updates to Third-Quarter Wages and Salaries

In addition to presenting updated estimates for the fourth quarter, today's release presents revised estimates of third-quarter 2021 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 $306.8 billion in the third quarter, an upward revision of $27.7 billion. With the incorporation of these new data, real gross domestic income is now estimated to have increased 6.4 percent in the third quarter, an upward revision of 0.6 percentage point from the previously published estimate.

GDP for 2021

Real GDP increased 5.7 percent, unchanged from the prior estimate, in 2021 (from the 2020 annual level to the 2021 annual level), in contrast to a decrease of 3.4 percent in 2020 (table 1). The increase in real GDP in 2021 reflected increases in all major components, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports increased (table 2).

The increase in PCE reflected increases in both goods and services. Within goods, the leading contributors were "other" nondurable goods (including games and toys as well as pharmaceuticals), clothing and footwear, and recreational goods and vehicles. Within services, the leading contributors were food services and accommodations as well as health care. The increase in nonresidential fixed investment reflected increases in equipment (led by information processing equipment) and in intellectual property products (led by software as well as research and development) that were partly offset by a decrease in structures (widespread across most categories). The increase in exports reflected an increase in goods (mainly non-automotive capital goods) that was partly offset by a decrease in services (led by travel as well as royalties and license fees). The increase in residential fixed investment mainly reflected an increase in new single family construction. The increase in private inventory investment primarily reflected an increase in wholesale trade (mainly in durable goods industries).

Current-dollar GDP increased 10.1 percent (revised), or $2.10 trillion, in 2021 to a level of $23.00 trillion, in contrast to a decrease of 2.2 percent, or $478.9 billion, in 2020 (tables 1 and 3).

The price index for gross domestic purchases increased 3.9 percent, unchanged from the prior estimate, in 2021, compared with an increase of 1.2 percent in 2020 (table 4). Similarly, the PCE price index increased 3.9 percent, unchanged from the prior estimate, compared with an increase of 1.2 percent. Excluding food and energy prices, the PCE price index increased 3.3 percent, unchanged from the prior estimate, compared with an increase of 1.4 percent.

Measured from the fourth quarter of 2020 to the fourth quarter of 2021, real GDP increased 5.6 (revised) percent during the period (table 6), in contrast to a decrease of 2.3 percent from the fourth quarter of 2019 to the fourth quarter of 2020.

The price index for gross domestic purchases, as measured from the fourth quarter of 2020 to the fourth quarter of 2021, increased 5.6 percent (revised), compared with an increase of 1.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020. The PCE price index increased 5.5 percent, unchanged from the prior estimate, compared with an increase of 1.2 percent. Excluding food and energy, the PCE price index increased 4.6 percent, unchanged from the prior estimate, compared with an increase of 1.4 percent.

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Next release, March 30, 2022 at 8:30 A.M. EDT
Gross Domestic Product (Third Estimate)
Corporate Profits
Gross Domestic Product by Industry
Fourth Quarter and Year 2021

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