GDP for Q4 2021 Increases in “Second Estimate” from Bureau of Economic Analysis

The Bureau of Economic Analysis (BEA) released today (2-24-22) its “second estimate” of real gross domestic product (GDP) for Q4 2021. BEA reports GDP increased at an annual rate of 7.0%. In Q3 2021, the real GDP increased 2.3%.

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 6.9%. The updated estimates primarily reflected upward revisions to nonresidential fixed investment, state and local government spending, and residential fixed investment that were partly offset by downward revisions to personal consumption expenditures (PCE) and exports.

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%, unchanged from the prior 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 in 2021 reflected increases in all major components led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports increased as well.