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EMBARGOED UNTIL RELEASE AT 8:30 a.m. EDT, Thursday, August 25, 2022

BEA 22-40

Gross Domestic Product (Second Estimate) and Corporate Profits (Preliminary), Second Quarter 2022

Real gross domestic product (GDP) decreased at an annual rate of 0.6 percent in the second quarter of 2022 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 1.6 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 decrease in real GDP was 0.9 percent. The update primarily reflects upward revisions to consumer spending and private inventory investment that were partly offset by a downward revision to residential fixed investment (refer to "Updates to GDP").

Real GDP: Percent change from preceding quarter

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

The decrease in private inventory investment was led by a decrease in retail trade (mainly "other" general merchandise stores). The decrease in residential fixed investment was led by a decrease in "other" structures (specifically real estate brokers' commissions). The decrease in federal government spending reflected a decrease in nondefense spending that was partly offset by an increase in defense spending. The decrease in nondefense spending reflected the sale of crude oil from the Strategic Petroleum Reserve, which results in a corresponding decrease in consumption expenditures. Because the oil sold by the government enters private inventories, there is no direct net effect on GDP. The decrease in state and local government spending was led by a decrease in investment in structures. The increase in imports reflected an increase in services (led by travel).

The increase in exports reflected increases in both goods (led by industrial supplies and materials) and services (led by travel). The increase in consumer spending reflected an increase in services (led by food services and accommodations as well as "other" services) that was partly offset by a decrease in goods (led by food and beverages).

Real GDP decreased less in the second quarter than in the first quarter, decreasing 0.6 percent after decreasing 1.6 percent. The smaller decrease reflected an upturn in exports and a smaller decrease in federal government spending that were partly offset by a larger decline in private inventory investment, a slowdown in consumer spending, and downturns in nonresidential fixed investment and residential fixed investment. Imports decelerated.

Current‑dollar GDP increased 8.4 percent at an annual rate, or $496.2 billion, in the second quarter to a level of $24.88 trillion (tables 1 and 3), an upward revision of $31.1 billion from the previous estimate. 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 8.4 percent in the second quarter (table 4), an upward revision of 0.2 percentage point from the previous estimate. The personal consumption expenditures (PCE) price index increased 7.1 percent, the same as previously estimated. Excluding food and energy prices, the PCE price index increased 4.4 percent, also unrevised.

Personal Income

Current-dollar personal income increased $353.1 billion in the second quarter, a downward revision of $0.7 billion from the previous estimate. The increase primarily reflected increases in compensation (led by private wages and salaries), proprietors' income (both nonfarm and farm), personal income receipts on assets, and rental income of persons (table 8).

Disposable personal income increased $287.0 billion, or 6.5 percent, in the second quarter, a downward revision of $4.4 billion from the previous estimate. Real disposable personal income decreased 0.6 percent, a downward revision of 0.1 percentage point.

Personal saving was $945.0 billion in the second quarter, a downward revision of $23.4 billion from the previous estimate. The personal saving rate—personal saving as a percentage of disposable personal income—was 5.1 percent in the second quarter, a downward revision of 0.1 percentage point.

Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI) increased 1.4 percent in the second quarter, compared with an increase of 1.8 percent in the first quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 0.4 percent in the second quarter, compared with an increase of 0.1 percent in the first quarter (table 1).

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $175.2 billion in the second quarter, in contrast to a decrease of $63.8 billion in the first quarter (table 10).

Profits of domestic financial corporations decreased $24.2 billion in the second quarter, compared with a decrease of $51.1 billion in the first quarter. Profits of domestic nonfinancial corporations increased $173.9 billion, in contrast to a decrease of $4.8 billion. Rest-of-the-world profits increased $25.5 billion, in contrast to a decrease of $7.9 billion. In the second quarter, receipts increased $51.1 billion, and payments increased $25.5 billion.

Updates to GDP

The decrease in second-quarter real GDP was revised up 0.3 percentage point from the "advance" estimate, primarily reflecting upward revisions to consumer spending, private inventory investment, and state and local government spending that were partly offset by downward revisions to residential fixed investment, federal government spending, and exports. 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.

	Advance Estimate	Second Estimate
	(Percent change from preceding quarter)
Real GDP	-0.9	-0.6
Current-dollar GDP	7.8	8.4
Real GDI	…	1.4
Average of Real GDP and Real GDI	…	0.4
Gross domestic purchases price index	8.2	8.4
PCE price index	7.1	7.1
PCE price index excluding food and energy	4.4	4.4

First-Quarter Wages and Salaries

BEA's standard practice for first-quarter estimates of wages and salaries is to incorporate data from the Bureau of Labor Statistics' Quarterly Census of Employment and Wages (QCEW) program with the publication of the annual update. For the first quarter of 2022, new QCEW data will be incorporated into next month's release of the 2022 Annual Update of the National Economic Accounts (refer to box below for details).

Annual Update of the National Economic Accounts

BEA will release results from the 2022 annual update of the National Economic Accounts, which includes the National Income and Product Accounts as well as the Industry Economic Accounts, on September 29, 2022. This update will present revised statistics for GDP, GDP by Industry, and gross domestic income that cover the first quarter of 2017 through the first quarter of 2022. For details, refer to Information on Updates to the National Economic Accounts.

* * *

Next release, September 29, 2022 at 8:30 A.M. EDT
Gross Domestic Product (Third Estimate)
Corporate Profits (Revised Estimate)
Gross Domestic Product by Industry
Second Quarter 2022 and Annual Update

Full Release & Tables (PDF)

Technical Note (PDF)

Tables Only (Excel)

Release Highlights (PDF)

Historical Comparisons (PDF)

Key source data and assumptions (Excel)

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Revision Information

GDP

Karl Rohrer

(301) 278-9083

gdpniwd@bea.gov

Corporate Profits

Kate Pinard

301-278-9417

cpniwd@bea.gov

Media (BEA)

Connie O'Connell

301-278-9003

Connie.OConnell@bea.gov

Resources

Additional resources available at www.bea.gov:

The full economic effects of the COVID-19 pandemic cannot be quantified in these statistics because the impacts are generally embedded in source data and cannot be separately identified. For more Information about COVID-19 impacts, refer to Federal Recovery Programs and BEA Statistics on our website.
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Historical time series for these estimates can be accessed in BEA's interactive data application.
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For more on BEA's statistics, refer to our monthly online journal, the Survey of Current Business.
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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 released in late September. 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.