Table 2 Contributions to Percent Change in Real Gross Domestic Product (Seasonally Adjusted at Annual Rates) Line Percent Change at an Annual Rate 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 1 Gross Domestic Product Percentage Points at Annual Rates 4.5 6.3 6.7 2.3 6.9 -1.4 2 Personal Consumption Expenditures 3 Goods 2.26 7.44 7.92 1.35 1.76 1.83 4 Durable Goods -0.07 5.69 2.99 -2.21 0.28 -0.03 5 Nondurable Goods 0.10 3.50 1.01 -2.52 0.22 0.35 6 Services -0.17 2.19 1.98 0.30 0.06 -0.38 7 Gross Private Domestic Investments 4.01 -0.37 -0.65 2.05 5.82 0.43 8 Fixed Investment 2.92 2.25 0.61 -0.16 0.50 1.27 9 Nonresidential 1.57 1.65 1.21 0.22 0.40 1.17 10 Structures -0.22 0.14 -0.08 -0.11 -0.22 -0.02 11 Equipment 1.29 0.75 0.66 -0.13 0.17 0.79 12 Intellectual Property Products 0.50 0.76 0.62 0.46 0.45 0.40 13 Residential 1.35 0.60 -0.6 -0.38 0.10 0.10 14 Change in Private Inventories 1.10 -2.62 -1.26 2.20 5.32 -0.84 15 Net Exports of Goods and Services -1.65 -1.56 -0.18 -1.26 -0.23 -3.20 16 Exports 2.07 -0.30 0.8 -0.59 2.24 -0.68 17 Goods 1.59 -0.10 0.48 -0.39 1.64 -0.8 18 Services 0.49 -0.20 0.32 -0.19 0.59 0.12 19 Imports -3.73 -1.26 -0.99 -0.68 -2.46 -2.53 20 Goods -3.04 -1.21 -0.51 0.04 -2.16 -2.43 21 Services -0.69 -0.05 -0.48 -0.72 -0.31 -0.10 22 Government Consumption Expenditures and Gross Investments -0.09 0.77 -0.36 0.17 -0.46 -0.48 23 Federal -0.22 0.78 -0.38 -0.35 -0.29 -0.39 24 National Defense 0.22 -0.25 -0.04 -0.07 -0.24 -0.33 25 Nondefense -0.44 1.02 -0.34 -0.29 -0.05 -0.06 26 State and Local 0.14 -0.01 0.02 0.52 -0.17 -0.08 Bureau of Economic Analysis Description: • The above table decomposes percent changes in Real GDP into its components (consumption, investment, government, and net exports) and more specific subcomponents. Analysis: • At first glance, the 1.4% decline in Real GDP may seem confusing since in Table 1 we show that Real GDP increased by 3.57%. What’s the deal! It is important to remember that Table 1 shows the percentage change in Real GDP for a whole year from First Quarter 2021 to First Quarter 2022. The change in Real GDP here in Table 2 shows the percentage of Real GDP since the last quarter, from the Fourth Quarter 2021 to First Quarter 2022. • Is the decline in Real GDP a sign of an impending recession? Probably not. The decline was the culmination of a number of factors: decreases in private inventory investment, reductions in government spending, and increases in imports. • The fall in private inventories is not all that surprising given the dramatic 5.32% increase in the Fourth Quarter 2021. • The declines in government expenditure at the federal, state, and local levels reflect decreases in some government pro- grams related to COVID-19 as these programs expire. • Expenditures on imports is considered a leakage since consumers are spending on goods and services produced in other countries. The 3.2% decline in net exports (value of exports minus the value of imports) reflected a significant increase in spending on imports and a modest decline in exports. • On the bright side, personal consumption expenditures increased by 1.83 percent while overall investment spending increased by 0.43% despite the decline in inventory investment.
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Center for Business and Economic Insight
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