Real gross domestic product (GDP) decreased at an annual rate of 31.4% in the second quarter of 2020, according to the “third” estimate released Wednesday by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5%.
The “third” estimate of GDP is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the decrease in real GDP was 31.7%. The upward revision with the third estimate primarily reflected an upward revision to personal consumption expenditures (PCE) that was partly offset by downward revisions to exports and to nonresidential fixed investment
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 decreases in new single-family housing.
Current-dollar GDP decreased 32.8%, or $2.04 trillion, in the second quarter to a level of $19.52 trillion. In the first quarter, GDP decreased 3.4%, or $186.3 billion.
The price index for gross domestic purchases decreased 1.4% in the second quarter, in contrast to an increase of 1.4% in the first quarter. The PCE price index decreased 1.6%, in contrast to an increase of 1.3%. Excluding food and energy prices, the PCE price index decreased 0.8%, in contrast to an increase of 1.6%.