Real GDP grew at an annual rate of 2.1% in the second quarter of 2023, according to the “third” estimate released by the Bureau of Economic Analysis. Real GDP increased 2.2% in the first quarter of 2023. The third estimate remained largely unchanged, but the revision revealed stronger business investment, weaker consumption and services growth, and net exports flipped positive.
The increase in real GDP reflected increases in nonresidential fixed investment, consumer spending, and state and local government spending that were partly offset by a decrease in exports. Imports, which are a subtraction in the calculations of GDP, decreased.
Consumption added 0.55 points (pp) to growth, following a 2.54 pp addition during the first quarter of 2023. The increase in PCE was driven primarily by services such as those in the household consumption expenditures: health care and financial services and insurance. Goods, including recreational goods and vehicles and nondurable goods like gasoline and other energy goods, offset the decreases in motor vehicles and parts and clothing and footwear. An increase in nondurable goods offset the decrease in durable goods. Inventories remained unchanged.
Business investment added 0.90 pp to GDP. Nonresidential fixed investment added 0.98 to GDP, with transportation equipment contributing 0.54 pp, while residential subtracted 0.09 pp.
Government spending increased, adding 0.57 pp to GDP. Federal and state-local government added 0.07 and 0.50 pp to GDP, respectively.
Exports subtracted 1.09 pp from GDP while imports added 1.13 pp.
Read the BEA release.
