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Thursday, June 29, 2023 Contact: Connie O’Connell, (301) 278-9003 Gross Domestic Product (Third Estimate), Corporate Profits (Revised Estimate), and GDP by Industry, First Quarter 2023 Percentage point contributions Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the first quarter of 2023, according to the “third” estimate. In the fourth quarter of 2022, real GDP increased 2.6 percent. The GDP estimate for the first quarter was revised up 0.7 percentage point from the “second” estimate, primarily reflecting upward revisions to exports and consumer spending. Contributions to Real GDP, First Quarter 2023 Real GDP increased 2.0 percent 3.00 2.50 2.00 1.50 1.00 0.50 0.00 -0.50 -1.00 -1.50 -2.00 -2.50 Real GDP, percent change Consumer spending U.S. Bureau of Economic Analysis Exports State and local Federal government government spending spending Business investment Housing investment Imports Inventory investment Seasonally adjusted annual rates The increase in the first quarter primarily reflected an increase in consumer spending that was partly offset by a decrease in inventory investment. • The increase in consumer spending reflected increases in both goods (led by motor vehicles and parts) and services (led by health care, food services and accommodations, and “other” services). • The decrease in inventory investment primarily reflected decreases in wholesale trade and manufacturing. Compared to the fourth quarter, the deceleration in real GDP primarily reflected a downturn in inventory investment and a slowdown in business investment. These movements were partly offset by an acceleration in consumer spending, an upturn in exports, and a smaller decrease in housing investment. Imports turned up. 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 second quarter of 2023 will be released on July 27, 2023. Prices Gross domestic purchases prices, the prices of goods and services purchased by U.S. residents, increased 3.8 percent in the first quarter after increasing 3.6 percent in the fourth quarter. Excluding food and energy, prices increased 4.2 percent in the first quarter after increasing 4.1 percent. 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:Q4 2022:Q1 2022:Q2 2022:Q3 2022:Q4 U.S. Bureau of Economic Analysis 2023:Q1 Seasonally adjusted annual rates Personal consumption expenditures (PCE) prices increased 4.1 percent in the first quarter after increasing 3.7 percent in the fourth quarter. Excluding food and energy, the PCE “core” price index increased 4.9 percent in the first quarter after increasing 4.4 percent. Personal income and saving Real disposable personal income (DPI)— personal income adjusted for taxes and inflation—increased 8.5 percent in the first quarter after increasing 2.5 percent in the fourth quarter. Current-dollar DPI increased 12.9 percent in the first quarter, following an increase of 6.4 percent in the fourth quarter. The increase in the first quarter primarily reflected increases in compensation and personal current transfer receipts as well as a decrease in personal current taxes, which are a subtraction in the calculation of DPI. Percent Quarter-to-Quarter Change in Disposable Personal Income Real DPI (chained) Current Dollar DPI Change 13.5 11.5 9.5 7.5 5.5 3.5 1.5 -0.5 -2.5 2022:Q2 2022:Q3 U.S. Bureau of Economic Analysis 2022:Q4 2023:Q1 Seasonally adjusted annual rates Personal saving as a percentage of DPI was 4.3 percent in the first quarter, compared with 3.4 percent in the fourth quarter. Page 2 of 4 Corporate profits from current production Profits decreased 4.1 percent at a quarterly rate in the first quarter after decreasing 2.0 percent in the fourth quarter. • Profits of domestic financial corporations decreased 2.3 percent after decreasing 12.8 percent. Percent Change Quarter-to-Quarter Change in Corporate Profits 6 4 2 0.0 -1 -3 • Profits of domestic nonfinancial corporations decreased 5.0 percent after decreasing 1.1 percent. -5 2021:Q4 2022:Q1 2022:Q2 2022:Q3 U.S. Bureau of Economic Analysis • Profits from the rest of the world (net) decreased 2.0 percent after increasing 4.8 percent. 2022:Q4 2023:Q1 Seasonally adjusted quarterly rates Corporate profits decreased 1.8 percent in the first quarter from one year ago. Updates to GDP The update from the “second” estimate primarily reflected upward revisions to exports and consumer spending that were partly offset by downward revisions to business investment and federal government spending. Imports were revised down. For additional details on the estimates, refer to the Technical Note. Page 3 of 4 Real gross domestic product by industry In the first quarter, the value added of private services-producing industries increased 2.6 percent, government increased 2.7 percent, and private goods-producing industries decreased 0.7 percent. Overall, 15 of 22 industry groups contributed to the first-quarter increase in real GDP. • • Within private services-producing industries, the increase was led by health care and social assistance, retail trade, real estate and rental and leasing, and accommodation and food services. Partly offsetting these increases was a decrease in finance and insurance. Real GDP by Industry Percent Change 5 3 1 -1 The increase in government reflected increases in state and local as well as federal government. -3 GDP Private Goods Private Services Government -5 -7 • Within private goods-producing industries, decreases in both durable goods and nondurable goods manufacturing were partly offset by an increase in agriculture, forestry, fishing, and hunting. -9 -11 2022:Q1 2022:Q2 U.S. Bureau of Economic Analysis 2022:Q3 2022:Q4 2023:Q1 Seasonally adjusted annual rates Contributions to Percent Change in Real GDP by Industry Group, 2023:Q1 Real GDP increased 2.0 percent Private goods Health care and social assistance Retail trade Agriculture, forestry, fishing, and hunting Real estate and rental and leasing Accommodation and food services Information State and local government Arts, entertainment, and recreation Professional, scientific, and technical services Transportation and warehousing Federal government Administrative and waste management services Construction Mining Educational services Other services, except government Management of companies and enterprises Utilities Wholesale trade Nondurable goods manufacturing Durable goods manufacturing Finance and insurance Private services -0.38 -0.43 -0.23 Government -0.01 -0.05 -0.07 -0.11 0.31 0.26 0.24 0.21 0.16 0.15 0.11 0.10 0.06 0.05 0.03 0.00 0.40 0.61 0.57 Percentage points U.S. Bureau of Economic Analysis Seasonally adjusted annual rates Page 4 of 4