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Gross Domestic Product, 2nd Quarter 2021 (Second Estimate); Corporate Profits, 2nd Quarter 2021 (Preliminary Estimate)

Summary:
Real gross domestic product (GDP) increased at an annual rate of 6.6 percent in the second quarter of 2021 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 6.3 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 6.5 percent. The update reflects upward revisions to nonresidential fixed investment and exports that were partly offset by downward revisions to private inventory investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, were revised down (see "Updates to GDP").

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Real gross domestic product (GDP) increased at an annual rate of 6.6 percent in the second quarter of 2021 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 6.3 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 6.5 percent. The update reflects upward revisions to nonresidential fixed investment and exports that were partly offset by downward revisions to private inventory investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, were revised down (see "Updates to GDP").

Gross Domestic Product, 2nd Quarter 2021 (Second Estimate); Corporate Profits, 2nd Quarter 2021 (Preliminary Estimate)

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

The increase in second quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic. In the second quarter, government assistance payments in the form of loans to businesses and grants to state and local governments increased, while social benefits to households, such as the direct economic impact payments, declined. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the second quarter because the impacts are generally embedded in source data and cannot be separately identified. For more information, see the Technical Note and Federal Recovery Programs and BEA Statistics.

The increase in real GDP in the second quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, exports, and state and local government spending that were partly offset by decreases in private inventory investment, residential fixed investment, and federal 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 food services and accommodations) and goods (led by "other" nondurable goods, notably pharmaceutical products, as well as clothing and footwear). The increase in nonresidential fixed investment reflected increases in intellectual property products (led by research and development as well as software) and equipment (led by transportation equipment). The increase in exports reflected an increase in goods (led by nonautomotive capital goods) and services (led by travel). The decrease in private inventory investment was led by a decrease in retail trade inventories. The decrease in federal government spending primarily reflected a decrease in nondefense spending on intermediate goods and services. In the second quarter, nondefense services decreased as the processing and administration of Paycheck Protection Program (PPP) loan applications by banks on behalf of the federal government declined.

Current dollar GDP increased 13.2 percent at an annual rate, or $693.2 billion, in the second quarter to a level of $22.73 trillion. In the first quarter, GDP increased 10.9 percent, or $560.6 billion (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 5.8 percent in the second quarter, an upward revision of 0.1 percentage point (table 4). The PCE price index increased 6.5 percent, an upward revision of 0.1 percentage point. Excluding food and energy prices, the PCE price index increased 6.1 percent, unrevised from the advance estimate.

Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI) increased 1.6 percent in the second quarter, compared with an increase of 6.3 percent (revised) 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 4.0 percent in the second quarter, compared with an increase of 6.3 percent in the first quarter (table 1).

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $234.5 billion in the second quarter, compared with an increase of $123.9 billion in the first quarter (table 10).

Profits of domestic financial corporations increased $53.7 billion in the second quarter, compared with an increase of $1.3 billion in the first quarter. Profits of domestic nonfinancial corporations increased $169.8 billion, compared with an increase of $133.2 billion. Rest-of-the-world profits increased $11.0 billion, in contrast to a decrease of $10.6 billion. In the second quarter, receipts increased $31.3 billion, and payments increased $20.3 billion.

Updates to GDP

In the second estimate for the second quarter, real GDP increased 6.6 percent, an upward revision of 0.1 percentage point. Upward revisions to nonresidential fixed investment, exports, and PCE were partly offset by downward revisions to private inventory investment, residential fixed investment, state and local government spending, and federal government spending. Imports were revised down. 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 6.5 6.6
Current-dollar GDP 13.0 13.2
Real GDI 1.6
Average of Real GDP and Real GDI 4.0
Gross domestic purchases price index 5.7 5.8
PCE price index 6.4 6.5
PCE price index excluding food and energy 6.1 6.1

Updates to First-Quarter Estimates

In addition to presenting updated estimates for the second quarter, today's release presents revised estimates of first-quarter personal taxes, based on updated data from the Treasury Department’s Office of Tax Analysis. Real GDI increased 6.3 percent in the first quarter, the same rate as the previously published estimate.

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Next release, September 30, 2021 at 8:30 A.M. EDT
Gross Domestic Product, Second Quarter 2021 (Third Estimate)
Gross Domestic Product by Industry, Second Quarter 2021 and Annual Update
Corporate Profits, Second Quarter 2021 (Revised Estimate)

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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