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Gross Domestic Product, 3rd Quarter 2020 (Second Estimate); Corporate Profits, 3rd Quarter 2020 (Preliminary Estimate)

Summary:
Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 31.4 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month that also showed an increase in real GDP of 33.1 percent. With the second estimate, upward revisions to nonresidential fixed investment, residential investment, and exports were offset by downward revisions to state and local government spending, private inventory investment, and personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, were revised up (see

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Real gross domestic product (GDP) increased at an annual rate of 33.1 percent in the third quarter of 2020 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 31.4 percent.

The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month that also showed an increase in real GDP of 33.1 percent. With the second estimate, upward revisions to nonresidential fixed investment, residential investment, and exports were offset by downward revisions to state and local government spending, private inventory investment, and personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, were revised up (see "Updates to GDP").

Gross Domestic Product, 3rd Quarter 2020 (Second Estimate); Corporate Profits, 3rd Quarter 2020 (Preliminary Estimate)

COVID-19 Impact on the Third-Quarter 2020 GDP Estimate

The increase in third quarter GDP reflected continued efforts to reopen businesses and resume activities that were postponed or restricted due to COVID-19. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the third quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified. For more information, see the Technical Note.

The increase in real GDP reflected increases in PCE, private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans) and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The increase in PCE reflected increases in services (led by health care as well as food services and accommodations) and goods (led by clothing and footwear as well as motor vehicles and parts). The increase in private inventory investment primarily reflected an increase in retail trade (led by motor vehicle dealers). The increase in exports primarily reflected an increase in goods (led by automotive vehicles, engines, and parts as well as capital goods). The increase in nonresidential fixed investment primarily reflected an increase in equipment (led by transportation equipment). The increase in residential fixed investment primarily reflected an increase in brokers’ commissions and other ownership transfer costs.

Current dollar GDP increased 38.0 percent at an annual rate, or $1.64 trillion, in the third quarter to a level of $21.16 trillion. In the second quarter, GDP decreased 32.8 percent, or $2.04 trillion (tables 1 and 3). More information on the source data that underlie the estimates is available in the "Key Source Data and Assumptions" file (available at 10 A.M.) on BEA’s website.

The price index for gross domestic purchases increased 3.3 percent in the third quarter, in contrast to a decrease of 1.4 percent in the second quarter (table 4). The PCE price index increased 3.7 percent, in contrast to a decrease of 1.6 percent. Excluding food and energy prices, the PCE price index increased 3.5 percent, in contrast to a decrease of 0.8 percent.

Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI) increased 25.5 percent in the third quarter, in contrast to a decrease of 32.6 percent (revised) 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 29.2 percent in the third quarter, in contrast to a decrease of 32.0 percent (revised) in the second quarter (table 1).

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $495.3 billion in the third quarter, in contrast to a decrease of $208.9 billion in the second quarter (table 10). Profits from current production were impacted by provisions from the Paycheck Protection Program. For more information, see the Technical Note.

Profits of domestic financial corporations increased $24.5 billion in the third quarter, compared with an increase of $26.5 billion in the second quarter. Profits of domestic nonfinancial corporations increased $431.2 billion, in contrast to a decrease of $145.9 billion. Rest-of-the-world profits increased $39.6 billion, in contrast to a decrease of $89.5 billion. In the third quarter, receipts increased $97.5 billion, and payments increased $57.9 billion.

Updates to GDP

In the second estimate for the third quarter, real GDP increased 33.1 percent, unrevised from the advance estimate. Upward revisions to nonresidential fixed investment, residential fixed investment, and exports were offset by downward revisions to state and local government spending, private inventory investment, and PCE. 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 33.1 33.1
Current-dollar GDP 38.0 38.0
Real GDI 25.5
Average of Real GDP and Real GDI 29.2
Gross domestic purchases price index 3.4 3.3
PCE price index 3.7 3.7
PCE price index excluding food and energy 3.5 3.5

Updates to Second-Quarter Wages and Salaries

In addition to presenting updated estimates for the third quarter, today's release presents revised estimates of second-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 decreased $617.3 billion in the second quarter, an upward revision of $64.8 billion. Real GDI is now estimated to have decreased 32.6 percent in the second quarter, an upward revision of 0.9 percentage point from the previously published estimate.

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Next release, December 22, 2020 at 8:30 A.M. EST
Gross Domestic Product (Third Estimate)
Corporate Profits (Revised Estimate)
Gross Domestic Product by Industry
Third Quarter 2020

Release Dates in 2021
Estimate  2020 Q4 and
Year 2020
2021 Q1 2021 Q2 2021 Q3
Gross Domestic Product        
Advance Estimate January 28, 2021 April 29, 2021 July 29, 2021 October 28, 2021
Second Estimate February 25, 2021 May 27, 2021 August 26, 2021 November 24, 2021
Third Estimate March 25, 2021 June 24, 2021 September 30, 2021 December 22, 2021
         

Gross Domestic Product by Industry

March 25, 2021 June 24, 2021 September 30, 2021 December 22, 2021
         
Corporate Profits        
Preliminary Estimate --- May 27, 2021 August 26, 2021 November 24, 2021
Revised Estimate March 25, 2021 June 24, 2021 September 30, 2021 December 22, 2021
Bureau of Economic Analysis
The BEA Advisory Committee advises the Director of BEA on matters related to the development and improvement of BEA’s national, regional, industry, and international economic accounts, especially in areas of new and rapidly growing economic activities arising from innovative and advancing technologies, and provides recommendations from the perspectives of the economics profession, business, and government.

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