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Gross Domestic Product (Second Estimate)
Corporate Profits (Preliminary Estimate)
Second Quarter 2023
August 30, 2023
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 summary of "highlights" is available
on BEA's website at www.bea.gov.
Real GDP and Related Aggregates
Real GDP increased at an annual rate of 2.1 percent (0.5 percent at a quarterly rate1) in the second
quarter of 2023, compared with an increase of 2.0 percent (0.5 percent at a quarterly rate) in the first
quarter. The increase in real GDP reflected increases in consumer spending, nonresidential fixed
investment, state and local government spending, and federal government spending that were partly
offset by decreases in exports, residential fixed investment, and private inventory investment. Imports,
which are a subtraction in the calculation of GDP, decreased.
Sources of Revision to Real GDP
The increase in second-quarter real GDP was revised down 0.3 percentage point from the “advance”
estimate, reflecting downward revisions to private inventory investment and nonresidential fixed
investment that were partly offset by upward revisions to state and local government spending. Imports
were revised up.
•
Within private inventory investment, the downward revision was led by wholesale trade
industries (mainly nondurable goods), based primarily on revised Census Bureau inventory data.
•
The downward revision to nonresidential fixed investment reflected downward revisions to
equipment and intellectual property products.
o
1
Within equipment, the leading contributors to the downward revision were information
processing equipment (notably, computers and peripherals) and industrial equipment
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?.
(notably, special industry machinery), based on updated Census data on trade in goods
as well as shipments.
o
Within intellectual property products, a downward revision to software was partly offset
by an upward revision to entertainment, literary, and artistic originals, based primarily
on new Census Bureau Quarterly Services Survey (QSS) data.
•
The revision to state and local government spending primarily reflected an upward revision to
structures investment, based on new June and revised April and May Census Value Put in Place
(VPIP) construction spending data.
•
Within imports, the leading contributor to the upward revision was nondurable industrial
supplies and materials (mainly, petroleum and products), primarily reflecting updated data from
BEA’s International Transactions Accounts as well as new and revised Census trade in goods data
for June.
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, increased 2.1
percent in the second quarter, a downward revision of 0.2 percentage point, reflecting the downward
revision to private nonresidential fixed investment.
Compared to the first quarter, the acceleration in real GDP in the second quarter primarily reflected a
smaller decrease 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
and federal government spending. Imports turned down.
Prices
BEA's featured measure of inflation in the U.S. economy, the price index for gross domestic purchases,
increased 1.7 percent in the second quarter, a downward revision of 0.2 percentage point from the
previous estimate. Excluding food and energy, gross domestic purchases prices increased 2.4 percent,
also revised down 0.2 percentage point.
The price index for personal consumption expenditures (PCE) increased 2.5 percent in the second
quarter, a downward revision of 0.1 percentage point from the previous estimate. Excluding food and
energy, the “core” PCE price index increased 3.7 percent, also revised down 0.1 percentage point. 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.
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Gross Domestic Income and Corporate Profits
Real gross domestic income (GDI), which measures output of the economy as the costs incurred and the
incomes earned in the production of goods and services, increased 0.5 percent at an annual rate (0.1
percent at a quarterly rate) in the second quarter in contrast to a decrease of 1.8 percent at an annual
rate (0.5 percent at a quarterly rate) in the first quarter. The average of real GDP and real GDI increased
1.3 percent at an annual rate (0.3 percent at a quarterly rate) in the second quarter, following an
increase of 0.1 percent at an annual rate (less than 0.1 percent at a quarterly rate) in the first quarter.
Current-dollar GDI increased $162.9 billion in the second quarter and was more than accounted for by
an increase in compensation, based on employment, hours, and earnings data from the BLS Current
Employment Statistics.
Profits from current production decreased $10.6 billion, or 0.4 percent (quarterly rate), in the second
quarter. Domestic profits of financial corporations decreased $47.8 billion, domestic profits of
nonfinancial corporations increased $17.1 billion, and rest-of-the-world profits increased $20.2 billion.
The BEA profits measure that is conceptually most similar to S&P 500 profits—national after-tax profits
without inventory valuation and capital consumption adjustments (shown in line 11 of table 9 of the
GDP news release)—increased $67.6 billion in the second quarter. Second-quarter national after-tax
profits decreased 9.4 percent from the same quarter one year ago.
Updates to First-Quarter Wages and Salaries
BEA’s standard practice for first quarter estimates of wages and salaries is to incorporate data from the
Bureau of Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) program as part of the
annual update of the National Economic Accounts. New QCEW data for the first quarter of 2023 will be
incorporated into next month's release along with the 2023 Comprehensive Update of the National
Economic Accounts (refer to “Looking Ahead” for details).
Looking Ahead: 2023 Comprehensive Update of the National Economic Accounts
BEA will release initial results from the 2023 comprehensive update of the National Economic Accounts,
which include the National Income and Product Accounts as well as the Industry Economic Accounts, on
September 28, 2023. The update will present revised statistics for GDP, GDP by industry, and gross
domestic income. For details, refer to Information on Updates to the National Economic Accounts.
The initial results of the comprehensive update of the Regional Economic Accounts will be released on
September 29.
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GDP by industry and GDP by state news releases for the second quarter of 2023 will be released this fall.
BEA will send out an advisory with the exact days and times when they become available.
Personal income by state for the second quarter will be released as scheduled on September 29.
More Information
The complete set of statistics for the second quarter is available on BEA's website, along with a table
presenting the "Key Source Data and Assumptions" that underlie the statistics. The Survey of Current
Business, BEA’s online journal, will present a more detailed analysis of the estimates ("GDP and the
Economy").
David B. Wasshausen
Associate Director, National Economic Accounts
Bureau of Economic Analysis
(301) 278-9752
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@FedFRASER