Fourth quarter GDP (third estimate) grows 2.6%

Real GDP increased at a seasonally adjusted annual rate of 2.6% during the fourth quarter of 2022, according to the Bureau of Economic Analysis’s “second” estimate. Real GDP increased 3.2% in the third quarter of 2022.

The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 2.7 percent. The revision primarily reflected downward revisions to exports and consumer spending Imports, which are a subtraction in the calculation of GDP, were revised down.

The increase in real GDP primarily reflected increases in private inventory investment, consumer spending, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by decreases in residential fixed investment and exports. Imports decreased.

Consumption added 0.7 percentage points (pp) to growth; this follows a 1.54 pp addition during the third quarter of 2022. The increase in PCE was driven by services (led by healthcare and housing and utilities) offset by decreases in other durable goods recreational goods and vehicles. Inventories increased, adding 1.47 pp to GDP. Residential investment subtracted a total of 1.20 pp from GDP.

Business investment added 0.79 pp from GDP. Investment in intellectual property added 0.33 pp to GDP while residential subtracted 1.20 pp.

Government spending increased, adding 0.55 pp to GDP. Federal and state-local government added 0.37 and 0.29 pp to GDP, respectively.

Read the BEA release.