The GDP: Gross Domestic Product, 2nd Quarter 2020 (Advance Estimate) and Annual Update
From the St. Louis Federal Reserve's
Explanation of GDP: GDP as a Measure of Economic Well-Being; St. Louis Federal Reserve Building
GDP serves as a gauge of our economy’s overall size and health. GDP measures the total market value (gross) of all U.S. (domestic) goods and services produced (product) in a given year.
When compared with prior periods, GDP tells us whether the economy is expanding by producing more goods and services, or contracting due to less output. It also tells us how the U.S. is performing relative to other economies around the world.
Economic growth rates are monitored closely, which is why GDP is often reported as a percentage. Reported rates are typically based on “real GDP,” which is adjusted to eliminate the effects of inflation.
Gross Domestic Product, 2nd Quarter 2020 (Advance Estimate) and Annual Update Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent. Editor's Note: The BEA, Bureau of Economic Analysis released this data. The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see "Source Data for the Advance Estimate" on page 2). The "second" estimate for the second quarter, based on more complete data, will be released on August 27, 2020.
Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.
The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see "Source Data for the Advance Estimate" on page 2). The "second" estimate for the second quarter, based on more complete data, will be released on August 27, 2020.
The decrease in real GDP reflected decreases in personal consumption expenditures (PCE), exports, private inventory investment, nonresidential fixed 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 (table 2).
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 private inventory investment primarily reflected a decrease in retail (led by motor vehicle dealers). The decrease in nonresidential fixed investment primarily reflected a decrease in equipment (led by transportation equipment), while the decrease in residential investment primarily reflected a decrease in new single-family housing.
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