U.S. Real Domestic Product “Advance” Estimate for Q2 2021: Up 6.5% on an Annual Rate

According to the “advance” estimated released today (7-29-21) by the Bureau of Economic Analysis (BEA), the U.S. real gross domestic product (GDP) increased at an annual rate of 6.5% in Q2 of 2021. In Q1 of 2021, the GDP increased by 6.3% (revised). The increase in real GDP in Q2 2021 reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, exports, and state and local government spending that were partly offset by decreases in private inventory investment, residential fixed investment, and federal government spending.

Current-dollar personal income decreased -$1.32 trillion or -22.0% in Q2 2021, in contrast to an increase of $2.33 trillion (revised), or 56.8% in Q1 2021. Disposable personal income decreased -$1.42 trillion, or -26.1%, in Q2 2021, in contrast to an increase of $2.27 trillion, or 63.7% (revised), in Q1 2021. Real disposable personal income decreased -30.6%, in contrast to an increase of 57.6% in Q1 2021. Personal outlays increased $680.8 billion, after increasing $538.8 billion. The increase in outlays was led by an increase in PCE for services. Personal saving was $1.97 trillion in Q2 2021, compared with $4.07 trillion (revised) in Q1 2o21. The personal saving rate — personal saving as a percentage of disposable personal income — was 10.9% in Q2 2021, compared with 20.8% in Q1 2021.

The BEA notes that the GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for Q2 2021, based on more complete data, will be released on August 26, 2021.