Real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021 (table 1), according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2020, real GDP increased 4.3 percent.
The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was also 6.4 percent. Upward revisions to consumer spending and nonresidential fixed investment were offset by downward revisions to exports and private inventory investment. Imports, which are a subtraction in the calculation of GDP, were revised up (see Technical Note).
COVID-19 Impact on the First-Quarter 2021 GDP Estimate
The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic. In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits, and Paycheck Protection Program loans, were distributed to households and businesses through the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2021 because the impacts are generally embedded in source data and cannot be separately identified. For more information, see the
and
Federal Recovery Program and BEA Statistics
.
The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by decreases in private inventory investment and exports. Imports increased (table 2).
The increase in PCE reflected increases in durable goods (led by motor vehicles and parts), nondurable goods (led by food and beverages), and services (led by food services and accommodations). The increase in nonresidential fixed investment reflected increases in intellectual property products (led by software) and in equipment (led by information processing equipment). The increase in federal government spending primarily reflected an increase in payments made to banks for processing and administering the Paycheck Protection Program loan applications as well as purchases of COVID-19 vaccines for distribution to the public. The decrease in private inventory investment primarily reflected a decrease in retail trade inventories.
Current‑dollar GDP increased 11.0 percent at an annual rate, or $566.3 billion, in the first quarter to a level of $22.06 trillion. In the fourth quarter, GDP increased 6.3 percent, or $324.5 billion (tables 1 and 3). More information on the source data that underlie the estimates is available in the Key Source Data and Assumptions file on BEA’s website.
The price index for gross domestic purchases increased 3.9 percent in the first quarter, compared with an increase of 1.7 percent in the fourth quarter (table 4). The PCE price index increased 3.7 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 2.5 percent, compared with an increase of 1.3 percent.
Gross Domestic Income and Corporate Profits
Real gross domestic income (GDI) increased 6.8 percent in the first quarter, compared with an increase of 19.4 percent (revised) in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 6.6 percent in the first quarter, compared with an increase of 11.6 percent (revised) in the fourth quarter (table 1).
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $0.2 billion in the first quarter, compared with a decrease of $31.4 billion in the fourth quarter (table 10).
Profits of domestic financial corporations decreased $3.6 billion in the first quarter, in contrast to an increase of $17.5 billion in the fourth quarter. Profits of domestic nonfinancial corporations increased $12.4 billion, in contrast to a decrease of $48.2 billion. Rest-of-the-world profits decreased $9.0 billion, compared with a decrease of $0.7 billion. In the first quarter, receipts increased $31.0 billion, and payments increased $40.0 billion.
Updates to GDP
In the second estimate for the first quarter, real GDP increased 6.4 percent, the same rate as in the advance estimate. Upward revisions to consumer spending, nonresidential fixed investment, and residential fixed investment were offset by downward revisions to exports, private inventory investment, and state and local government spending. Imports were revised up. For more information, see the Technical Note. For information on updates to GDP, see the “Additional Information” section that follows.
| Advance Estimate | Second Estimate | |
|---|---|---|
| (Percent change from preceding quarter) | ||
| Real GDP | 6.4 | 6.4 |
| Current-dollar GDP | 10.7 | 11.0 |
| Real GDI | … | 6.8 |
| Average of Real GDP and Real GDI | … | 6.6 |
| Gross domestic purchases price index | 3.8 | 3.9 |
| PCE price index | 3.5 | 3.7 |
| PCE price index excluding food and energy | 2.3 | 2.5 |
Updates to Fourth-Quarter Wages and Salaries
In addition to presenting updated estimates for the first quarter, today’s release presents revised estimates of fourth-quarter 2020 wages and salaries, personal taxes, and contributions for government social insurance, based on updated data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and salaries are now estimated to have increased $360.5 billion in the fourth quarter, an upward revision of $157.8 billion. With the incorporation of these new data, real gross domestic income is now estimated to have increased 19.4 percent in the fourth quarter, an upward revision of 3.7 percentage points from the previously published estimate.
Annual Update of the National Economic Accounts
BEA will release results from the 2021 annual update of the National Economic Accounts, which includes the National Income and Product Accounts (NIPAs) as well as the Industry Economic Accounts, later this year. Results from the annual update of the NIPAs will be released on July 29, 2021, along with the advance estimate of GDP for the second quarter of 2021. Results from the annual update of the Industry Economic Accounts will be released on September 30, 2021, along with the third estimate of GDP for the second quarter of 2021. The update of the National Economic Accounts will cover the first quarter of 1999 through the first quarter of 2021 and will result in revisions to GDP, GDP by Industry, and gross domestic income. For details, see
Information on the 2021 Annual Update of the National Economic Accounts
.
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Next release, June 24, 2021 at 8:30 A.M. EDT
Gross Domestic Product (Third Estimate)
Gross Domestic Product by Industry
Corporate Profits (Revised Estimate)
First Quarter 2021
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