The 2020 Mid-Year Economic Update_long

Real U.S. GDP Down 31.7% in 2Q According to ‘Second’ Estimate

The decrease in real GDP reflected decreases in PCE, exports, nonresidential fixed investment, private inventory investment, residential fixed investment, and state and local government spending that were partly offset by an increase in federal government spending.
Real GDP 2Q

Real gross domestic product (GDP) decreased at an annual rate of 31.7% in the second quarter of 2020, according to the “second” estimate released today by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5%.

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 32.9%. With the second estimate, private inventory investment and personal consumption expenditures (PCE) decreased less than previously estimated.

The decrease in real GDP reflected decreases in PCE, exports, nonresidential fixed investment, private inventory investment, residential fixed investment, and state and local government spending that were partly offset by an increase in federal government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

The decrease in PCE reflected decreases in services (led by health care) and goods (led by clothing and footwear). The decrease in exports primarily reflected a decrease in goods (led by capital goods). The decrease in nonresidential fixed investment primarily reflected a decrease in equipment (led by transportation equipment). The decrease in private inventory investment primarily reflected a decrease in retail (led by motor vehicle dealers). The decrease in residential investment primarily reflected a decrease in new single-family housing.

Real gross domestic income (GDI) decreased 33.1% in the second quarter, compared with a decrease of 2.5% 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, decreased 32.4% in the second quarter, compared with a decrease of 3.7% in the first quarter.

Current-dollar GDP decreased 33.3%, or $2.07 trillion, in the second quarter to a level of $19.49 trillion. In the first quarter, GDP decreased 3.4%, or $186.3 billion.

The price index for gross domestic purchases decreased 1.5% in the second quarter, in contrast to an increase of 1.4% in the first quarter (table 4). The PCE price index decreased 1.8%, in contrast to an increase of 1.3%. Excluding food and energy prices, the PCE price index decreased 1.0%, in contrast to an increase of 1.6%.

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