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Gross Domestic Product, Second Quarter 2022
(Advance Estimate)
July 28, 2022
This technical note provides background information about the source data and estimating methods
used to produce the estimates presented in the GDP news release; a brief summary of "highlights" is
available on BEA's website at www.bea.gov.
Economic Factors and Second-Quarter 2022 GDP
Real GDP decreased 0.9 percent at an annual rate (0.2 percent at a quarterly rate1) in the second quarter
of 2022, following a decrease of 1.6 percent at an annual rate (0.4 percent at a quarterly rate) in the first
quarter. The decrease occurred amid continued inflation, low unemployment, ongoing supply-chain
challenges, and rising interest rates. The economic effects of these factors cannot be quantified in the
GDP estimate for the second quarter of 2022 because the impacts are generally embedded in source
data and cannot be separately identified. For more information about COVID-19 impacts, refer to
Federal Recovery Programs and BEA Statistics on our website. Real GDP for the second quarter of 2022
is 2.5 percent above the level of real GDP for the fourth quarter of 20192.
Key Source Data and Assumptions for the Advance Estimate
The advance estimate of GDP for the second quarter is based on source data that are incomplete and
subject to updates. Three months of source data were available for consumer spending on goods;
shipments of capital equipment; motor vehicle sales and inventories; manufacturing, wholesale, and
retail trade inventories; exports and imports of goods; federal government outlays; and consumer,
producer, and international prices. For major source data series for which only two months of data were
available, or for which data for the second quarter are not yet available, BEA's assumptions were based
on a variety of sources, most notably: private high-frequency payment card transactions data, industry
and trade association reports that include volume data, such as health care patient visits and traveler
throughput, as well as recreation services revenues and event attendance. More information on the
source data and BEA assumptions that underlie the second-quarter estimate is shown in the Key Source
Data and Assumptions table.
1 Percent changes in quarterly seasonally adjusted series are displayed at annual rates, unless otherwise specified. For more
information, refer to the FAQ Why does BEA publish percent changes in quarterly series at annual rates?.
2 The fourth quarter of 2019 was the most recent quarter prior to the onset of the COVID-19 pandemic. Calculated as the
percent change from the fourth quarter of 2019 to the second quarter of 2022 in news release table 3, line 1.
Real GDP and Related Aggregates
Real GDP decreased 0.9 percent (annual rate) in the second quarter of 2022, following a decrease of 1.6
percent in the first quarter. The decrease in real GDP reflected decreases in private inventory
investment, residential fixed investment, federal government spending, state and local government
spending, and nonresidential fixed investment that were partly offset by increases in exports and
consumer spending. Imports, which are a subtraction in the calculation of GDP, increased.
•
The decrease in private inventory investment was led by retail trade (notably, general
merchandise stores as well as motor vehicle dealers), based primarily on Census Bureau
inventory book value data and unit inventory data from Wards Intelligence.
•
Within residential fixed investment, the leading contributor to the decrease was brokers’
commissions and other ownership transfer costs, based primarily on existing home sales data
from the National Association of Realtors and new home sales data from the Census Bureau.
•
Within federal government spending, a decrease in nondefense spending was partly offset by an
increase in defense spending.
o
The decrease in nondefense spending was impacted by the sale of 72.3 million barrels of
crude oil from the Strategic Petroleum Reserve (SPR), based on data from the
Department of Energy. Within the National Economic Accounts, these sales are
deducted from government consumption expenditures; therefore, an increase in sales
results in a corresponding decrease in consumption expenditures. Because the oil sold
by the government enters private inventories, there is no direct net effect on GDP.
o
Within defense, the increase was led by an increase in spending on intermediate goods
and services based primarily on data from the Monthly Treasury Statement.
•
Within state and local government spending, a decrease in gross investment was led by
structures, based primarily on Census Value of Construction Put in Place (VPIP) data for April and
May.
•
Within nonresidential fixed investment, decreases in structures and equipment were mostly
offset by an increase in intellectual property products.
•
Estimates of exports and imports primarily reflected Census-BEA U.S. International Trade in
Goods and Services data and the Census Advance Economic Indicators Report for June.
o
Within exports, both goods and services increased. Within goods, the leading
contributors to the increase were industrial supplies and materials (notably petroleum
and products); foods, feeds, and beverages; and nonfood and nonautomotive consumer
goods. Within services, the increase was led by travel.
o
Within imports, the increase reflected an increase in services (mainly travel).
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•
Within consumer spending, an increase in services was partly offset by a decrease in goods.
o
The increase in services was led by food services and accommodations, health care, and
“other” services. The increase in food services and accommodations was led by food
services (mainly purchased meals and beverages), based on Census Bureau Monthly
Retail Trade Survey (MRTS) data. Within health care, both hospitals and outpatient
services increased, based primarily on patient volume data from trade sources and
Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) data. For other
services, the leading contributor to the increase was international travel, based
primarily on data from BEA’s International Transactions Accounts.
o
Within goods, the decrease reflected both nondurable goods (led by food and
beverages) and durable goods (led by recreational goods and vehicles as well as
furnishings and durable household equipment), based primarily on Census Bureau MRTS
data.
Real final sales to private domestic purchasers, which measures private demand in the domestic
economy and is derived as the sum of consumer spending and private fixed investment, was unchanged
in the second quarter after increasing 3.0 percent in the first quarter.
Prices
BEA's featured measure of inflation in the U.S. economy, the price index for gross domestic purchases,
increased 8.2 percent in the second quarter, after increasing 8.0 percent in the first quarter. Excluding
food and energy, gross domestic purchases prices increased 6.6 percent, after increasing 6.9 percent.
The price index for personal consumption expenditures (PCE) increased 7.1 percent in the second
quarter, the same increase as in the first quarter. Excluding food and energy, the “core” PCE price index
increased 4.4 percent, after increasing 5.2 percent. The second-quarter increase in core PCE prices
reflected widespread increases in both goods and services, led by increases in the prices for housing and
for transportation services. Prices were based primarily on BLS consumer and producer price indexes.
For a comparison of PCE prices to BLS consumer price indexes, refer to NIPA Table 9.1U. Reconciliation
of Percent Change in the CPI with Percent Change in the PCE Price Index.
Disposable Personal Income
Real disposable personal income (DPI) decreased 0.5 percent (at an annual rate) in the second quarter,
compared with a decrease of 7.8 percent in the first quarter. Current-dollar DPI increased 6.6 percent
(annual rate) in the second quarter, after decreasing 1.3 percent in the first quarter.
The increase in second-quarter current-dollar DPI primarily reflected an increase in compensation
(notably, private and government wages and salaries), based primarily on BLS CES data. Proprietors'
income (both nonfarm and farm), personal income receipts on assets, and rental income also increased.
The personal saving rate was 5.2 percent in the second quarter, compared with 5.6 percent in the first
quarter.
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Second-Quarter 2022 Capital Transfers to State and Local Governments
Capital transfers received by state and local government are presented in NIPA table 5.11U. Typically,
these transactions reflect federal capital grants (which includes investment grants and other capital
transfers for transportation, housing and community services, and general public service), disaster
related insurance benefits, and other specified transfers. In the second quarter of 2022, capital transfers
to state and local government increased $468.1 billion (annual rate), primarily reflecting increases in
capital grants from federal government and “other” capital transfers.
•
Capital grants from federal government (presented on line 42 of 5.11U) increased $363.9 billion
(annual rate) in the second quarter, primarily reflecting distributions from the Coronavirus State
and Local Fiscal Recovery Funds program funded by the American Rescue Plan that support
future capital expenditures, including investments in property, facilities, or equipment. More
information can be found in the FAQ “How was federal assistance to the states authorized by
the American Rescue Plan recorded in the NIPAs?”
•
The increase in “other” capital transfers (line 43) reflects the National Opioid Settlement, a legal
settlement between state and local governments and four U.S. corporations, drug distributors
Cardinal Health, McKesson, and AmerisourceBergen, and drug manufacturer Johnson &
Johnson, that provides $26.0 billion ($100.4 billion at an annual rate) for opioid epidemic
remediation. The national income and product accounts record legal settlements such as this on
an accrual basis in the quarter when the settlement takes effect. The settlement was classified
as a capital transfer from corporate business to state and local government. More information
can be found in the FAQ “How does the 2022 national opioid settlement impact the NIPAs?”
Looking Ahead: 2022 Annual Update of the National Economic Accounts
BEA will release results from the 2022 annual update of the National Economic Accounts, which includes
the National Income and Product Accounts as well as the Industry Economic Accounts, on September 29,
2022. The update will present revised statistics for GDP, GDP by Industry, and gross domestic income
that cover the first quarter of 2017 through the first quarter of 2022. For details, refer to Information on
Updates to the National Economic Accounts.
More Information
The complete set of statistics for the second quarter is available on BEA's website. In a few weeks, the
Survey of Current Business, BEA’s online monthly journal, will present a more detailed analysis of the
estimates ("GDP and the Economy").
Erich H. Strassner
Associate Director, National Economic Accounts
Bureau of Economic Analysis
(301) 278-9612
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@FedFRASER