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2021 Economic Review & 2022 Outlook - GDP12-13-21 | Economic News

2021 Economic Review and 2022 Outlook - GDP

The Big Picture

The first half of 2021 saw greater increases in Gross Domestic Product (GDP), a measure of overall spending throughout the United States, than what has been experienced over the previous four years, with the exception of the highly turbulent spending found throughout the country in the second and third quarter of 2020 in which the pandemic initial hit the United States and recover began respectively. The most recent update (at the time of publishing) shows a GDP increase of 6.7% in the second quarter of 2021 and a 2% increase in the third quarter.

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In their latest GDP data release, The United States Bureau of Economic Analysis (BEA), accredited the growth in GDP to the rise in private inventory investment, personal consumption expenditures (PCE), state and local government spending, and nonresidential fixed investment.
More specifically, "The increase in private inventory investment reflected increases in wholesale trade (led by nondurable goods industries) and in retail trade (led by motor vehicles and parts dealers). The increase in PCE reflected an increase in services that was partly offset by a decrease in goods. Within services, increases were widespread with the largest contributions coming from "other" services (mainly international travel), transportation services, and health care. The decrease in goods primarily reflected a decrease in spending on motor vehicles and parts. The increase in state and local government spending was led by employee compensation (notably, education). The increase in nonresidential fixed investment reflected an increase in intellectual property products (led by software) that was partly offset by decreases in structures and equipment."

Filed Under: ECONOMY, FORECAST, GDP
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