Bureau of Economic Analysis Revises GDP Higher in Q4 2020 “Third” Estimate

The Bureau of Economic Analysis (BEA) released today (3-25-21) their “third” estimate of real gross domestic product (GDP) for Q4 of 2020. According to the BEA, the GDP increased at an annual rate of 4.3% in Q4. In Q3 of 2020 the real GDP increased 33.4%. The “third” estimate of GDP is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 4.1%. The upward revision primarily reflected an upward revision to private inventory investment that was partly offset by a downward revision to nonresidential fixed investment. The BEA said in regard to the impact of the COVID-19 pandemic, that the increase in Q4 of 2020 GDP reflected both the continued economic recovery from the sharp declines earlier in the year and the ongoing impact of the COVID-19 pandemic, including new restrictions and closures that took effect in some areas of the United States. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for Q4 of 2020 because the impacts are generally embedded in source data and cannot be separately identified.