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Thursday, March 30, 2023 Contact: Connie O’Connell, (301) 278-9003 Gross Domestic Product (Third Estimate), Corporate Profits, and GDP by Industry, Fourth Quarter and Year 2022 Real gross domestic product (GDP) increased at an annual rate of 2.6 percent in the fourth quarter of 2022, after increasing 3.2 percent in the third quarter. The increase in the fourth quarter primarily reflected increases in inventory investment and consumer spending that were partly offset by a decrease in housing investment. The deceleration in the fourth quarter, compared to the third quarter, primarily reflected a downturn in exports and decelerations in consumer spending, business investment, and state and local government spending. These movements were partly offset by an upturn in inventory investment, a smaller decrease in housing investment, and an acceleration in federal government spending. Imports decreased less in the fourth quarter than in the third quarter. For more details, including source data, refer to the Technical Note. GDP highlights The fourth-quarter increase in real GDP reflected increases in inventory investment, consumer spending, business investment, federal government spending, and state and local government spending that were partly offset by decreases in housing investment and exports. Imports, which are a subtraction in the calculation of GDP, decreased. Contributions to Real GDP, Fourth Quarter 2022 Real GDP increased 2.6 percent Percentage point contributions 3.00 2.50 2.00 1.50 1.00 0.50 0.00 -0.50 -1.00 -1.50 Real GDP, percent change Inventory investment U.S. Bureau of Economic Analysis Imports Consumer spending Business investment Federal State and local government government spending spending Exports Housing investment Seasonally adjusted annual rates • The increase in private inventory investment was led by manufacturing (mainly petroleum and coal products) as well as mining, utilities, and construction industries (led by utilities). • The increase in consumer spending reflected an increase in services (led by health care as well as housing and utilities) that was partly offset by a decrease in goods (led by “other” durable goods, specifically jewelry). • The decrease in housing investment was led by new single-family housing construction and brokers’ commissions. BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and regional economic data—are available at www.bea.gov. E-mail alerts are also available. The “advance” estimate of GDP for the first quarter of 2023 will be released on April 27, 2023. Updates to GDP Real GDP was revised down 0.1 percentage point from the “second” estimate, primarily reflecting downward revisions to exports and consumer spending. The price index for GDP increased 3.9 percent in the fourth quarter, unrevised from the previous estimate. Personal income and saving Real disposable personal income (DPI)—personal income adjusted for taxes and inflation— increased 5.0 percent in the fourth quarter after increasing 3.2 percent in the third quarter. Current-dollar DPI increased 8.9 percent in the fourth quarter, following an increase of 7.7 percent. The increase in current-dollar DPI for the fourth quarter primarily reflected increases in compensation and government social benefits. Personal saving as a percentage of DPI was 4.0 percent in the fourth quarter, compared with 3.2 percent in the third quarter. Percent Quarter-to-Quarter Change in Disposable Personal Income Real DPI (chained) Current Dollar DPI Change 10.0 8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 -8.0 -10.0 -12.0 2022:Q1 2022:Q2 U.S. Bureau of Economic Analysis 2022:Q3 2022:Q4 Seasonally adjusted annual rates Corporate profits from current production Profits decreased 2.0 percent in the fourth quarter after decreasing less than 0.1 percent in the third quarter. • Profits of domestic nonfinancial corporations decreased 1.1 percent after increasing 0.8 percent. • Profits of domestic financial corporations decreased 12.8 percent after decreasing 0.4 percent. • Profits from the rest of the world increased 4.8 percent after decreasing 3.4 percent. Percent Change Quarter-to-Quarter Change in Corporate Profits 5 4 3 2 1 0.1 0 -1 -2 -3 2021:Q3 Corporate profits increased 2.6 percent in the fourth quarter from one year ago. 0.0 2021:Q4 2022:Q1 U.S. Bureau of Economic Analysis 2022:Q2 2022:Q3 2022:Q4 Seasonally adjusted quarterly rates Prices Gross domestic purchases prices, the prices of goods and services purchased by U.S. residents, increased 3.6 percent in the fourth quarter after increasing 4.8 percent in the third quarter. Excluding food and energy, prices increased 4.1 percent after increasing 5.0 percent. Page 2 of 5 Percent Change Quarter-to-Quarter Change in Prices 9.0 8.0 7.0 6.0 5.0 4.0 Gross Domestic Purchases Price Index 3.0 Gross Domestic Purchases, Excluding Food and Energy 2.0 PCE Price Index 1.0 PCE, Excluding Food and Energy 0.0 2021:Q3 2021:Q4 2022:Q1 2022:Q2 2022:Q3 U.S. Bureau of Economic Analysis 2022:Q4 Seasonally adjusted annual rates Personal consumption expenditure (PCE) prices increased 3.7 percent in the fourth quarter after increasing 4.3 percent. Excluding food and energy, the PCE “core” price index increased 4.4 percent after increasing 4.7 percent. Gross domestic product by industry Today’s release includes estimates of GDP by industry, or value added—a measure of an industry’s contribution to GDP. Private goods-producing industries increased 4.0 percent, private services-producing industries increased 2.3 percent, and government increased Real GDP by Industry 2.1 percent. Overall, 17 of 22 industry groups Percent Change contributed to the fourth-quarter increase in real 10 GDP. • Within private goods-producing industries, the increase was led by durable goods manufacturing and mining. Partly offsetting these increases was a decrease in construction. • Within private services-producing industries, the leading contributors to the increase were professional, scientific, and technical services; retail trade; health care and social assistance; and information. Notable offsets include decreases in finance and insurance as well as real estate and rental and leasing. 8 6 4 2 0 -2 -4 -6 -8 -10 -12 GDP Private Goods Private Services Government 2021:Q4 2022:Q1 U.S. Bureau of Economic Analysis 2022:Q2 2022:Q3 2022:Q4 Seasonally adjusted annual rates • The increase in government reflected increases in both federal government as well as state and local government. Page 3 of 5 Contributions to Percent Change in Real GDP by Industry Group, 2022:Q4 Real GDP increased 2.6 percent Private goods Professional, scientific, and technical services Retail trade Durable goods manufacturing Mining Health care and social assistance Information Management of companies and enterprises Wholesale trade Transportation and warehousing State and local government Federal government Arts, entertainment, and recreation Educational services Nondurable goods manufacturing Utilities Agriculture, forestry, fishing, and hunting Other services, except government Administrative and waste management services Accommodation and food services Construction Real estate and rental and leasing Finance and insurance Private services -0.46 Government -0.02 -0.08 -0.14 -0.29 0.20 0.20 0.16 0.12 0.11 0.06 0.06 0.04 0.03 0.02 0.00 0.36 0.34 0.34 0.46 0.44 0.62 Percentage points Seasonally adjusted annual rates U.S. Bureau of Economic Analysis Year 2022 highlights Percent Change Real GDP increased 2.1 percent (from the 2021 annual level to the 2022 annual level), compared to an increase of 5.9 percent in 2021. The increase primarily reflected increases in consumer spending, exports, and inventory investment that were partly offset by a decrease in housing investment. Annual Change in Real GDP 6 4 2 0 Year 2022 Corporate Profits from Current Production -2 Profits increased 6.6 percent (from the 2021 annual level to the 2022 annual level) after increasing 22.6 percent in 2021. -4 2019 2020 2021 2022 U.S. Bureau of Economic Analysis • Profits of domestic financial corporations decreased 10.1 percent after increasing 15.6 percent. • Profits of domestic nonfinancial corporations increased 10.4 percent after increasing 33.1 percent. • Profits from the rest of the world increased 10.0 percent after decreasing 4.0 percent. Page 4 of 5 Year 2022 GDP by Industry Today’s release includes annual estimates of GDP by industry (from the 2021 annual level to the 2022 annual level). Private goods-producing industries decreased 2.8 percent, private services-producing industries increased 3.4 percent, and government increased 1.3 percent. Overall, 15 of 22 industry groups contributed to the 2022 increase in real GDP. • Within private goods-producing industries the leading contributor to the decrease was construction. Percent Change 8 Real GDP by Industry GDP Private Goods Private Services Government 6 4 2 0 -2 • Within private services-producing industries, an increase in professional, scientific, and technical services was partly offset by a decrease in retail trade. -4 2018 2019 2020 2021 2022 U.S. Bureau of Economic Analysis • The increase in government reflected an increase in state and local government. Contributions to Percent Change in Real GDP by Industry Group, 2022 Real GDP increased 2.1 percent Private goods Professional, scientific, and technical services Information Real estate and rental and leasing Administrative and waste management services Health care and social assistance Arts, entertainment, and recreation State and local government Accommodation and food services Durable goods manufacturing Management of companies and enterprises Other services, except government Transportation and warehousing Finance and insurance Educational services Wholesale trade Federal government Agriculture, forestry, fishing, and hunting Utilities Nondurable goods manufacturing Mining Retail trade Construction Private services -0.43 Government 0.00 -0.03 -0.04 -0.11 -0.18 -0.22 0.20 0.16 0.16 0.15 0.14 0.08 0.07 0.06 0.05 0.02 0.30 0.29 0.43 0.42 Percentage points U.S. Bureau of Economic Analysis Page 5 of 5 0.55
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