Inventories Boost Fourth Quarter GDP Growth

2022-01-27T12:20:49-06:00

Real GDP growth accelerated in the fourth quarter of 2021 despite omicron’s spread. This quarter’s growth reflected strong gains in private inventory investment and consumer spending. According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 6.9% in the fourth quarter of 2021, after a disappointing 2.3% increase in the third quarter of 2021. This quarter’s growth rate matched NAHB’s forecast. For the full year of 2021, real GDP grew at a 5.7% annualized rate, also matching NAHB’s annual forecast. It marked the fastest growth rate since 1984. In 2020, the COVID-19 pandemic, and its associated policy response, plunged the U.S. economy into the worst contraction since 1946 as real GDP declined 3.4%. The increase in real GDP in the fourth quarter of 2021 reflected increases in private inventory investment, exports, and personal consumption expenditures (PCE). Meanwhile, the increase in imports, which are a subtraction in the calculation of GDP, and decreases in both federal and state and local government spending had negative contributions to economic growth in the fourth quarter of 2021. The acceleration in real GDP in the fourth quarter primarily reflected accelerations in exports, private inventory investment and consumer spending. The change in private inventories contributed 4.9 percentage points to the 6.9% increase in real GDP and was led by inventory investment by motor vehicle dealers. This growth factor is unlikely to be repeated soon and points to slower growth in 2022. Consumer spending rose at an annual rate of 3.3% in the fourth quarter, compared to a 2.0% increase in the third quarter. The increase in PCE primarily reflected the increase in services. While goods spending rose 0.5% at an annual rate, expenditures on services increased 4.7% at an annual rate, led by transportation services (+20.2%), recreation services (+20.1%), and health care (+7.4%). While nonresidential fixed investment rose 2.0%, residential fixed investment (RFI) decreased 0.8% in the fourth quarter. The increase in nonresidential fixed investment reflected the increase in intellectual property products (+10.6%), that partly offset by the decrease in structures (-11.4%). The decrease in residential fixed investment reflected decreases in single-family structures (-10.4%) and multifamily structures (-2.6%). The increase in exports reflected increases in both goods and services. Federal government spending decreased 4.0% in the fourth quarter, while state and local government spending declined 2.2%, reflecting decreases in consumption expenditures (led by compensation of state and local government employees, notably education) and in gross investment (led by new educational structures). Related ‹ Market Share of FHA-Backed New Home Sales Smallest Since 2007Housing Share of GDP: 16.4% ›Tags: economics, gdp, macroeconomics, macroeconomy, residential fixed investment

Inventories Boost Fourth Quarter GDP Growth2022-01-27T12:20:49-06:00

State-Level GDP in the Third Quarter of 2021

2022-01-06T09:20:27-06:00

Real gross domestic product (GDP) increased in 37 states and the District of Columbia in the third quarter of 2021 compared to the second quarter of 2021. According to the U.S. Bureau of Economic Analysis (BEA), the percent change increase in real GDP ranged from 6.0 percent in Hawaii to -3.3 percent in New Hampshire and North Dakota. Nationwide, growth in real GDP, measured on a seasonally adjusted annual rate basis, increased 2.3 percent in the third quarter of 2021, after an increase of 6.7 percent in the previous quarter. Professional, scientific, and technical services; finance and insurance; and government and government enterprises were the leading contributors to the increase in real GDP across the country. Regionally, real GDP growth increased in all the regions from the second quarter of 2021 to the third quarter of 2021. The percent change in real GDP ranged from 3.1 percent increase in the Southwest region (Arizona, New Mexico, Oklahoma, and Texas) to 0.8 percent increase in the Great Lakes (Illinois, Indiana, Michigan, Ohio, and Wisconsin) and Plains (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota) regions. Overall, 14 out of 22 industry groups contributed to the increase in real GDP. Arts, entertainment, and recreation; accommodation and food services; and administrative and support and waste management and remediation services industry groups had the largest percent change from the preceding period during this time. Utilities; retail trade; and construction industry groups posted significant declines compared to the previous quarter. At the state level, accommodation and food services was the leading contributor to the increase in real GDP in Hawaii (6.0 percent), the state with the highest real GDP growth. Agriculture, forestry, fishing and hunting was the leading contributor to the decrease in North Dakota, while government and government enterprises, primarily military, was the leading contributor to the decrease in New Hampshire. These were the two states with the largest decreases. Related ‹ Consumer Confidence Improved in DecemberTags: gdp, macroeconomics, state and local markets, state GDP

State-Level GDP in the Third Quarter of 20212022-01-06T09:20:27-06:00

Economic Growth Decelerates in the Third Quarter of 2021

2021-10-28T11:21:50-05:00

By Jing Fu on October 28, 2021 • Real GDP growth slowed to a moderate pace in the third quarter of 2021, as supply-chain disruptions continued, the cost of living rose, and 4.3 million workers quit their jobs. According to the “advance” estimate  released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 2.0% in the third quarter of 2021, after a 6.7% increase in the second quarter of 2021. It marked the slowest growth rate since the start of the recovery and was far below NAHB’s forecast of a 4.0% increase. The increase in real GDP in the third quarter of 2021 reflected increases in personal consumption expenditures (PCE), private inventory investment, and state and local government spending. Meanwhile, the increase in imports, which are a subtraction in the calculation of GDP, and decreases in residential fixed investment, federal government spending, and exports had negative contributions to economic growth in the third quarter of 2021. The deceleration in real GDP in the third quarter primarily reflected a sharp slowdown in consumer spending. Consumer spending rose at an annual rate of 1.6% in the third quarter, compared to a 12.0% increase in the second quarter. Goods spending decreased 9.2% at an annual rate, led by motor vehicles and parts (-53.9%), while expenditures on services increased 7.9% at an annual rate, mainly reflecting increases in transportation services (+41.6%). While nonresidential fixed investment rose 1.8%, residential fixed investment (RFI) decreased 7.7% in the third quarter. The increase in nonresidential fixed investment reflected an increase in intellectual property products (+12.2%), led by software (+15.7%). The decline in residential fixed investment reflected decreases in improvements and in new single-family structures. The decrease in exports reflected a decrease in goods and the increase in imports mainly reflected an increase in services. Related ‹ High Prices Continue to Reduce Interest for New ConstructionTags: economics, gdp, macroeconomics, macroeconomy, residential fixed investment

Economic Growth Decelerates in the Third Quarter of 20212021-10-28T11:21:50-05:00

About My Work

Phasellus non ante ac dui sagittis volutpat. Curabitur a quam nisl. Nam est elit, congue et quam id, laoreet consequat erat. Aenean porta placerat efficitur. Vestibulum et dictum massa, ac finibus turpis.

Recent Works

Recent Posts