The Bureau of Economic Analysis (BEA) released today (3-30-21) its “third” estimate of real gross domestic product (GDP) for Q4 2021. According to the BEA, in Q4 2021 the GDP increased at an annual rate of 6.9%.
The GDP estimate released today is based on more complete source data than were available for the “second” estimate which was issued last month. In the second estimate, the increase in real GDP was 7.0%. The downward revision primarily reflected downward revisions to personal consumption expenditures (PCE) and exports that were partly offset by an upward revision to private inventory investment, and nonresidential fixed investment that were partly offset by decreases in both federal and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The BEA notes that the increase in Q4 2021 GDP reflected the continued economic impact of the COVID-19 pandemic. In Q4, COVID-19 cases resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country. Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased as provisions of several federal programs expired or tapered off.
The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for Q4 2021 because the impacts are generally embedded in source data and cannot be separately identified.
For all of 2021, Real GDP increased 5.7%, unrevised from the second estimate, in 2021 (from the 2020 annual level to the 2021 annual level), in contrast to a decrease of -3.4% in 2020. The increase in real GDP for 2021 primarily reflected increases in PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports increased.
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Gross Domestic Product (Third Estimate), Corporate Profits, and GDP by Industry, Fourth Quarter and Year 2021