Real GDP Increased at an Annual Rate of 6.9% in Q4 2021

The Bureau of Economic Analysis (BEA) reported today (1-27-22) in the “advance” estimate that the real gross domestic product (GDP) increased at an annual rate of 6.9% in Q4 2021. In Q3 of 2021, the real GDP increased 2.3%.

The “advance” GDP estimate released today is based on source data that are incomplete and subject to further revision by the source agency. The “second” estimate for Q4, based on more complete data, is scheduled to be released on 24th February.

The increase in real GDP primarily reflected increases in private inventory investment, exports, personal consumption expenditures (PCE), 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 fourth quarter GDP reflected the continued economic impact of the COVID-19 pandemic. In Q4 of 2021, 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 because the impacts are generally embedded in source data and cannot be separately identified.