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EMBARGOED UNTIL RELEASE AT 8:30 a.m. EDT, Thursday, March 28, 2024

BEA 24—11

Gross Domestic Product, Fourth Quarter and Year 2023 (Third Estimate), GDP by Industry, and Corporate Profits

Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the fourth quarter of 2023 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent.

The GDP estimate 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 3.2 percent. The update primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment (refer to "Updates to GDP").

Real GDP: Percent change from preceding quarter

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

Compared to the third quarter of 2023, the deceleration in real GDP in the fourth quarter primarily reflected a downturn in private inventory investment and slowdowns in federal government spending and residential fixed investment. Imports decelerated.

Current‑dollar GDP increased 5.1 percent at an annual rate, or $346.9 billion, in the fourth quarter to a level of $27.96 trillion, an upward revision of $12.4 billion from the previous estimate (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 1.9 percent in the fourth quarter, the same as in the previous estimate (table 4). The personal consumption expenditures (PCE) price index increased 1.8 percent, the same as the previous estimate, and the PCE index excluding food and energy prices increased 2.0 percent, a downward revision of 0.1 percentage point.

Personal Income

Current-dollar personal income increased $230.2 billion in the fourth quarter, an upward revision of $10.7 billion from the previous estimate. The increase primarily reflected increases in compensation, personal income receipts on assets, and proprietors' income (table 8).

Disposable personal income increased $190.4 billion, or 3.8 percent, in the fourth quarter, a downward revision of $12.1 billion from the previous estimate. Real disposable personal income increased 2.0 percent, a downward revision of 0.2 percentage point.

Personal saving was $815.5 billion in the fourth quarter, an upward revision of $6.3 billion from the previous estimate. The personal saving rate—personal saving as a percentage of disposable personal income—was 4.0 percent in the fourth quarter, an upward revision of 0.1 percentage point.

Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI) increased 4.8 percent in the fourth quarter, compared with an increase of 1.9 percent in the third 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 fourth quarter, compared with an increase of 3.4 percent (table 1).

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $133.5 billion in the fourth quarter, compared with an increase of $108.7 billion in the third quarter (table 10).

Profits of domestic financial corporations increased $5.9 billion in the fourth quarter, compared with an increase of $9.0 billion in the third quarter. Profits of domestic nonfinancial corporations increased $136.5 billion, compared with an increase of $90.8 billion. Rest-of-the-world profits decreased $8.9 billion, in contrast to an increase of $8.8 billion. In the fourth quarter, receipts decreased $20.1 billion, and payments decreased $11.2 billion.

Updates to GDP

With the third estimate, upward revisions to consumer spending, nonresidential fixed investment, and state and local government spending were partly offset by downward revisions to private inventory investment 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	Third Estimate
	(Percent change from preceding quarter)
Real GDP	3.3	3.2	3.4
Current-dollar GDP	4.8	4.9	5.1
Real GDI	…	…	4.8
Average of Real GDP and Real GDI	…	…	4.1
Gross domestic purchases price index	1.9	1.9	1.9
PCE price index	1.7	1.8	1.8
PCE price index excluding food and energy	2.0	2.1	2.0

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. Private goods-producing industries increased 7.0 percent, private services-producing industries increased 2.6 percent, and government increased 3.1 percent (table 12). Overall, 18 of 22 industry groups contributed to the fourth-quarter increase in real GDP.

Within private goods-producing industries, the leading contributors to the increase were nondurable goods manufacturing (led by petroleum and coal products and chemical products), durable goods manufacturing (led by machinery), and construction (table 13).
Within private services-producing industries, the leading contributors to the increase were retail trade (led by motor vehicle and parts dealers), health care and social assistance (led by ambulatory health care services), utilities, and professional, scientific, and technical services (led by computer systems design and related services).
The increase in government reflected increases in state and local government as well as federal government.

Contributions to Percent Change in Real GDP by Industry Group

Gross Output by Industry

Real gross output—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)—increased 2.4 percent in the fourth quarter. This reflected an increase of 3.7 percent for private goods-producing industries, an increase of 2.0 percent for private services-producing industries, and an increase of 1.8 percent for government (table 16). Overall, 13 of 22 industry groups contributed to the increase in real gross output.

GDP for 2023

Real GDP increased 2.5 percent in 2023 (from the 2022 annual level to the 2023 annual level), compared with an increase of 1.9 percent in 2022 (table 1). The increase in real GDP in 2023 primarily reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, exports, and federal government spending that were partly offset by decreases in residential fixed investment and private inventory investment. Imports decreased (table 2).

Gross Domestic Income and Corporate Profits for 2023

Real GDI increased 0.5 percent in 2023, compared with an increase of 2.1 percent in 2022 (table 1). The average of real GDP and real GDI increased 1.5 percent in 2023, compared with an increase of 2.0 percent in 2022.

In 2023, profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $49.3 billion, compared with an increase of $285.9 billion in 2022 (table 10). Profits of domestic financial corporations decreased $55.2 billion, compared with a decrease of $0.9 billion in 2022. Profits of domestic nonfinancial corporations increased $66.6 billion, compared with an increase of $247.6 billion. Rest-of-the-world profits increased $37.9 billion, compared with an increase of $39.2 billion.

	Advance Estimate	Second Estimate	Third Estimate
(Percent change from 2022 annual level to 2023 annual level)
Real GDP	2.5	2.5	2.5
Current-dollar GDP	6.3	6.3	6.3
Gross domestic purchases price index	3.4	3.4	3.4
PCE price index	3.7	3.7	3.7
PCE price index excluding food and energy	4.1	4.1	4.1
(Percent change from fourth quarter 2022 to fourth quarter 2023)
Real GDP	3.1	3.1	3.1
Gross domestic purchases price index	2.4	2.4	2.4
PCE price index	2.7	2.8	2.8
PCE price index excluding food and energy	3.2	3.2	3.2

Real GDP by Industry for 2023

In 2023, private goods-producing industries increased 2.7 percent, private services-producing industries increased 2.7 percent, and government increased 1.4 percent. Overall, 17 of 22 industry groups contributed to the increase in real GDP (table 13).

Within private goods-producing industries, the leading contributor to the increase was mining.
The increase in private services-producing industries was led by retail trade; professional, scientific, and technical services; health care and social assistance; and information. These increases were partly offset by decreases in finance and insurance as well as wholesale trade.
The increase in government reflected increases in state and local government as well as federal government.

Real gross output increased 2.1 percent in 2023. Private goods-producing industries increased 2.0 percent, private services-producing industries increased 2.1 percent, and government increased 2.2 percent (table 16). Overall, 17 of 22 industry groups contributed to the increase in real gross output.

* * *

Next release, April 25, 2024, at 8:30 a.m. EDT
Gross Domestic Product, First Quarter 2024 (Advance Estimate)

* * *

Full Release & Tables (PDF)

Technical Note (PDF)

Tables Only (Excel)

Release Highlights (PDF)

Historical Comparisons (PDF)

Key source data and assumptions (Excel)

Revision Information

GDP

Lisa Mataloni

301-278-9083

gdpniwd@bea.gov

Corporate Profits

Kate Pinard

301-278-9417

cpniwd@bea.gov

Media

Connie O’Connell

301-278-9003

Connie.OConnell@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 2017). 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 (2017) 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 2022. 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 five 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 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.