Real gross domestic product (GDP) decreased at an annual rate of 31.4% in the second quarter of 2020, according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5%.
The “third” estimate of GDP released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the decrease in real GDP was 31.7%. The upward revision with the third estimate primarily reflected an upward revision to personal consumption expenditures (PCE) that was partly offset by downward revisions to exports and to nonresidential fixed investment.
The decrease in real GDP reflected decreases in PCE, exports, nonresidential fixed investment, private inventory investment, residential fixed investment, and state and local government spending that were partly offset by an increase in federal government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
The decrease in PCE reflected decreases in services (led by health care) and goods (led by clothing and footwear). The decrease in exports primarily reflected a decrease in goods (led by capital goods). The decrease in nonresidential fixed investment primarily reflected a decrease in equipment (led by transportation equipment). The decrease in private inventory investment primarily reflected a decrease in retail (led by motor vehicle dealers). The decrease in residential investment primarily reflected decreases in new single-family housing.
Current-dollar GDP decreased 32.8%, or $2.04 trillion, in the second quarter to a level of $19.52 trillion. In the first quarter, GDP decreased 3.4%, or $186.3 billion. More information on the source data that underlie the estimates is available in the "Key Source Data and Assumptions" file on BEA’s website.
The price index for gross domestic purchases decreased 1.4% in the second quarter, in contrast to an increase of 1.4% in the first quarter. The PCE price index decreased 1.6%, in contrast to an increase of 1.3%. Excluding food and energy prices, the PCE price index decreased 0.8%, in contrast to an increase of 1.6%.
Gross Domestic Income and Corporate Profits
Real gross domestic income (GDI) decreased 33.5% in the second quarter, compared with a decrease of 2.5% in the first quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, decreased 32.5% in the second quarter, compared with a decrease of 3.7% in the first quarter.
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $208.9 billion in the second quarter, compared with a decrease of $276.2 billion in the first quarter (table 10).
Profits of domestic financial corporations increased $26.5 billion in the second quarter, in contrast to a decrease of $42.2 billion in the first quarter. Profits of domestic nonfinancial corporations decreased $145.9 billion, compared with a decrease of $190.5 billion. Rest-of-the-world profits decreased $89.5 billion, compared with a decrease of $43.5 billion. In the second quarter, receipts decreased $134.5 billion, and payments decreased $45 billion.
Updates to GDP
In the third estimate, the second-quarter change in real GDP was revised up 0.3 percentage points from the second estimate. PCE, residential investment, and state and local government spending were revised up. These upward revisions were partly offset by downward revisions to exports and to private nonresidential fixed investment (mainly intellectual property products). For more information, see the Technical Note and the "Additional Information" section that follows.