Real gross domestic product (GDP) increased at an annual rate of 6.7% in the second quarter of 2021, according to the “third” estimate released Thursday by the Bureau of Economic Analysis. In the first quarter, real GDP increased 6.3%.
The “third” estimate of GDP 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 6.6%. Upward revisions to personal consumption expenditures (PCE), exports, and private inventory investment were partly offset by an upward revision to imports, which are a subtraction in the calculation of GDP.
The increase in real GDP in the second quarter reflected increases in 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.
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 equipment (led by transportation equipment) and intellectual property products (led by software as well as research and development). The increase in exports reflected increases in goods (led by nonautomotive capital goods) and in 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 13.4% at an annual rate, or $702.8 billion, in the second quarter to a level of $22.74 trillion. In the first quarter, GDP increased 10.9%, or $560.6 billion. 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% in the second quarter, unrevised from the second estimate. The PCE price index increased 6.5%, unrevised from the second estimate. Excluding food and energy prices, the PCE price index increased 6.1%, unrevised from the second estimate.