Gross Domestic Product

Components Definitions

GDP is equal to Consumption + Investment + Government Spending + Net Exports (Exports minus Imports), where total Investment is equal to Fixed Investment plus the Change in Inventories.  The change in GDP will therefore equal the change in Consumption + the change in Investment + the change in Government Spending + the change in Net Exports, where the change in Investment will equal the change in Fixed Investment plus the change in the Change in Inventories.

Net Exports

Methodology: https://www.bea.gov/system/files/2019-12/Chapter-8.pdf

Change in Private Inventories

Methodology: https://www.bea.gov/system/files/2019-12/Chapter-7.pdf

Change in private inventories (CIPI), or inventory investment, is a measure of the value of the change in the physical volume of the inventories—additions less withdrawals—that businesses maintain to support their production and distribution activities. Inventory investment is one of the most volatile components of gross domestic product (GDP), giving it an important role in short run variations in GDP growth. Moreover, inventory movement plays a key role in the timing, duration, and magnitude of business cycles, as unanticipated buildups in inventories may signal future cutbacks in production, and unanticipated shortages in inventories may signal future pickups in production.

The CIPI estimates are the building blocks for BEA’s estimates of inventory stocks. These stock estimates, coupled with BEA’s estimates of final sales, form inventory-sales ratios that can be used to assess the likelihood that businesses will add to, or reduce, inventories in response to changes in demand.CIPI is the NIPA measure of the flow (or change) in the stock of inventories held by private business over a specified period. 1 The stock of inventories is the value of the goods owned by private business at the end of a specified period, whether the goods were produced or acquired in that period or in previous periods.

In measuring the level of GDP, the change in, not the level of, inventories provides the appropriate measure of the flow of economic activity that is consistent with that measured by the other GDP components. A positive CIPI indicates that total production (GDP) exceeded the sum of the final sales components of GDP in the current period and that the excess production was added to inventories. A negative CIPI indicates that final sales exceeded production in the current period and that the excess sales were filled by drawing down inventories. CIPI is valued in the average prices for the period because units move in and out of inventories continuously over the course of the period.

Developments Real GDP

Data: 1

Date	Real Gross Domestic Product					Real GDI					Real Average of GDP and GDI
	Billions of Chained 2017	Q/Q Level	Q/Q Ann	6M Ann	Y/Y	Billions of Chained 2017	Q/Q Level	Q/Q Ann	6M Ann	Y/Y	Billions of Chained 2017	Q/Q Level	Q/Q Ann	6M Ann	Y/Y
2024-01-01	22,759	79.50	1.41	2.40	2.92	22,239	73.14	1.33	2.47	1.82	22,499	76.32	1.37	2.43	2.37
2023-10-01	22,679	188.56	3.40	4.13	3.13	22,166	196.81	3.63	2.76	1.61	22,423	192.69	3.51	3.45	2.37
2023-07-01	22,491	265.34	4.86	3.45	2.93	21,969	102.73	1.89	1.17	-0.06	22,230	184.04	3.38	2.31	1.43
2023-04-01	22,225	113.02	2.06	2.15	2.38	21,866	24.54	0.45	0.47	0.13	22,046	68.78	1.26	1.31	1.26
2023-01-01	22,112	122.35	2.24	2.40	1.72	21,842	26.78	0.49	-1.27	0.02	21,977	74.56	1.37	0.55	0.87
2022-10-01	21,990	138.85	2.57	2.61	0.65	21,815	-166.54	-3.00	-0.20	0.02	21,902	-13.85	-0.25	1.20	0.33
2022-07-01	21,851	142.97	2.66	1.04	1.71	21,981	144.54	2.67	1.33	2.30	21,916	143.76	2.67	1.18	2.01
2022-04-01	21,708	-30.71	-0.56	-1.27	1.87	21,837	-0.01	0.00	0.24	2.53	21,773	-15.36	-0.28	-0.52	2.20
2022-01-01	21,739	-108.73	-1.98	2.40	3.57	21,837	25.66	0.47	3.29	3.70	21,788	-41.54	-0.76	2.84	3.63
2021-10-01	21,848	364.52	6.96	5.11	5.42	21,811	324.74	6.18	4.88	4.38	21,829	344.63	6.57	5.00	4.90
2021-07-01	21,483	173.54	3.30	4.75	4.74	21,487	189.03	3.60	4.11	6.55	21,485	181.28	3.45	4.43	5.64
2021-04-01	21,310	319.00	6.22	5.73	11.95	21,297	239.82	4.63	3.87	12.53	21,304	279.41	5.42	4.80	12.24
2021-01-01	20,991	266.41	5.24	4.72	1.57	21,058	161.08	3.12	9.04	1.60	21,024	213.75	4.17	6.85	1.59
2020-10-01	20,724	212.34	4.21	18.54	-1.08	20,897	731.12	15.31	21.91	0.21	20,810	471.73	9.61	20.21	-0.44
2020-07-01	20,512	1,476.96	34.84	-1.48	-1.47	20,165	1,239.41	28.88	-5.33	-2.54	20,339	1,358.18	31.84	-3.42	-2.00
2020-04-01	19,035	-1,630.72	-28.02	-17.46	-7.53	18,926	-1,799.61	-30.46	-17.63	-7.92	18,980	-1,715.17	-29.25	-17.54	-7.73
2020-01-01	20,666	-285.54	-5.34	-1.46	1.23	20,726	-127.42	-2.42	0.34	1.06	20,696	-206.48	-3.89	-0.56	1.14
2019-10-01	20,951	133.51	2.59	3.59	3.18	20,853	163.00	3.19	2.92	2.61	20,902	148.25	2.89	3.26	2.90
2019-07-01	20,818	233.05	4.61	3.98	2.67	20,690	135.07	2.65	1.78	2.23	20,754	184.06	3.63	2.88	2.45
2019-04-01	20,585	169.38	3.36	2.77	2.15	20,555	46.85	0.92	2.30	2.56	20,570	108.12	2.13	2.54	2.36
2019-01-01	20,415	110.28	2.19	1.38	1.85	20,508	185.39	3.70	2.68	2.94	20,462	147.83	2.94	2.02	2.39

Contributors

Date	Real Personal Consumption Expenditures					Real Gross Private Domestic Investment					Real Net Exports of Goods and Services					Real Government Consumption Expenditures and Gross Investment
	Billions SAAR	% Q/Q	% Y/Y	Q/Q B	Y/Y B	Billions SAAR	% Q/Q	% Y/Y	Q/Q B	Y/Y B	Billions SAAR	% Q/Q	% Y/Y	Q/Q B	Y/Y B	Billions SAAR	% Q/Q	% Y/Y	Q/Q B	Y/Y B
2023-07-01	15,461	0.77	2.21	118	334	4,111	2.41	2.14	97	86	-931	0.27	-5.15	-2	51	3,843	1.41	4.81	54	176
2023-04-01	15,344	0.20	1.82	31	274	4,014	1.27	-2.23	50	-91	-928	-0.74	-16.84	7	188	3,790	0.83	4.08	31	149
2023-01-01	15,313	0.93	2.12	141	318	3,964	-2.34	-6.13	-95	-259	-935	-3.16	-18.05	30	206	3,759	1.18	2.73	44	100
2022-10-01	15,171	0.29	1.17	44	176	4,058	0.84	-2.42	34	-101	-966	-1.60	-3.02	16	30	3,715	1.30	0.79	48	29
2022-07-01	15,127	0.39	1.88	58	279	4,025	-1.97	2.91	-81	114	-981	-12.09	1.52	135	-15	3,667	0.71	-0.58	26	-21
2022-04-01	15,069	0.49	2.19	74	324	4,106	-2.77	8.98	-117	338	-1,116	-2.18	22.66	25	-206	3,641	-0.48	-1.64	-18	-61
2022-01-01	14,995	0.00	4.99	0	713	4,222	1.52	10.52	63	402	-1,141	14.61	32.21	-145	-278	3,659	-0.73	-2.25	-27	-84
2021-10-01	14,996	0.99	7.24	147	1,013	4,159	6.35	7.94	248	306	-996	3.01	23.06	-29	-187	3,686	-0.07	-0.15	-2	-6
2021-07-01	14,849	0.70	7.65	103	1,055	3,911	3.81	4.71	143	176	-967	6.22	32.47	-57	-237	3,688	-0.37	-0.58	-14	-21
2021-04-01	14,746	3.24	16.39	463	2,077	3,767	-1.39	19.78	-53	622	-910	5.44	64.56	-47	-357	3,702	-1.10	-1.78	-41	-67
2021-01-01	14,283	2.14	3.03	300	420	3,820	-0.85	3.91	-33	144	-863	6.67	53.56	-54	-301	3,743	1.40	1.39	52	51
2020-10-01	13,983	1.37	-0.79	189	-111	3,853	3.16	2.12	118	80	-809	10.89	43.21	-79	-244	3,691	-0.49	1.08	-18	39
2020-07-01	13,794	8.88	-1.50	1,125	-210	3,735	18.75	-2.17	590	-83	-730	31.95	15.24	-177	-97	3,710	-1.57	2.22	-59	81
2020-04-01	12,669	-8.61	-8.61	-1,194	-1,194	3,145	-14.45	-16.75	-531	-633	-553	-1.62	-14.47	9	94	3,769	2.09	5.01	77	180
2020-01-01	13,862	-1.64	0.80	-232	110	3,677	-2.56	-2.00	-97	-75	-562	-0.52	-10.12	3	63	3,692	1.09	4.43	40	157
2019-10-01	14,094	0.64	2.60	90	357	3,773	-1.18	1.30	-45	48	-565	-10.76	-12.31	68	79	3,652	0.64	4.69	23	164

Q1 2023

U.S GDP is grew at a 2.0% annualized pace in Q1 2023, below economists estimate of 2%.

• The deceleration in real GDP in the first quarter primarily reflected a downturn in private inventory investment and a slowdown in nonresidential fixed investment.
• These movements were partly offset by an acceleration in consumer spending, an upturn in exports, and a smaller decrease in residential fixed investment. Imports turned up.
• The price index for gross domestic purchases increased 3.8 percent in the first quarter, compared with an increase of 3.6 percent in the fourth quarter.
• The PCE price index increased 4.2 percent, compared with an increase of 3.7 percent. Excluding food and energy prices, the PCE price index increased 4.9 percent, compared with an increase of 4.4 percent.

Q2 2023

https://www.wsj.com/articles/us-gdp-report-economic-growth-92482437

Real gross domestic product (GDP) increased at an annual rate of 2.4 percent in the second quarter of 2023, above economist estimated of 1.8%.

• The acceleration in GDP in the second quarter primarily reflected an upturn in private inventory investment and an acceleration in nonresidential fixed investment. These movements were partly offset by a downturn in exports, and decelerations in consumer spending, federal government spending, and state and local government spending. Imports turned down.
• Current-dollar GDP increased 4.7 percent at an annual rate, or $305.2 billion, in the second quarter to a level of $26.84 trillion. In the first quarter, GDP increased 6.1 percent, or $391.8 billion.
• The PCE price index increased 2.6 percent, compared with an increase of 4.1 percent. Excluding food and energy prices, the PCE price index increased 3.8 percent, compared with an increase of 4.9 percent.
• Consumer spending grew at an annual rate of 1.6% in the second quarter, down from 4.2% growth in the first quarter.
• Current-dollar personal income increased $236.1 billion in the second quarter, compared with an increase of $278.0 billion in the first quarter. Disposable personal income increased $248.2 billion, or 5.2 percent, in the second quarter, compared with an increase of $587.9 billion, or 12.9 percent, in the first quarter

	Advance Estimate	Second Estimate
	(Percent change from preceding quarter)
Real GDP	2.4	2.1
Current-dollar GDP	4.7	4.1
Real GDI	…	0.5
Average of Real GDP and Real GDI	…	1.3
Gross domestic purchases price index	1.9	1.7
PCE price index	2.6	2.5
PCE price index excluding food and energy	3.8	3.7

Q3 2023

https://www.bea.gov/sites/default/files/2023-12/gdp3q23_3rd.pdf

https://www.bea.gov/sites/default/files/2023-12/gdp3q23_3rd.pdf

	Advance Estimate					Second Estimate		Third Estimate
(Percent change from preceding quarter)
Real GDP	4.9					5.2		4.9
Current-dollar GDP	8.5					8.9		8.3
Real GDI	…					1.5		1.5
Average of Real GDP and Real GDI	…					3.3		3.2
Gross domestic purchases price index	3.0					3.0		2.9
PCE price index	2.9					2.8		2.6
PCE price index excluding food and energy	2.4					2.3		2.0

GDP Components contribution Before And During Recession

Contributions 1 year Before

• Residential investment and consumer durables spending major contributors to weakness before recession beggins.

Now we want to find the false positives - sharply declining values in periods other than the years before recessions or during the recessions. In the residential investment data displayed in Figure 12 there is one false positive in 1951-2 and another in 1966 -67. In both cases housing was weakening substantially but there was no recession. Why is that? Those two false positives occurred coincidentally with a big ramp-up in defense spending for the Korean War and the Vietnam War. It is best not to think of these as false positives, but rather alarms of forthcoming recessions that were met by a response that prevented the recessions from occurring, however accidental the response might have been.

https://www.nber.org/system/files/working_papers/w13428/w13428.pdf

Contribution 2 year since recession began

During recession weakness is more broad between all the GDP components. Led by businesses Equipment and Software spending, and consumer non durables and durables spending.

https://www.nber.org/system/files/working_papers/w13428/w13428.pdf