Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the fourth quarter of 2023 (table 1), according to the “second” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent.
The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 3.3 percent. The update primarily reflected a downward revision to private inventory investment that was partly offset by upward revisions to state and local government spending and consumer spending (refer to “Updates to GDP”).
The increase in real GDP reflected increases in consumer spending, exports, state and local government spending, nonresidential fixed investment, federal government spending, and residential fixed investment that were partly offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).
Compared to the third quarter of 2023, the deceleration in real GDP in the fourth quarter primarily reflected a downturn in private inventory investment and slowdowns in federal government spending, residential fixed investment, and consumer spending. Imports decelerated.
Current‑dollar GDP increased 4.9 percent at an annual rate, or $334.5 billion, in the fourth quarter to a level of $27.94 trillion, an upward revision of $5.8 billion from the previous estimate (tables 1 and 3). 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 increased 1.9 percent in the fourth quarter, the same as in the previous estimate. The personal consumption expenditures (PCE) price index increased 1.8 percent, an upward revision of 0.1 percentage point. Excluding food and energy prices, the PCE price index increased 2.1 percent, an upward revision of 0.1 percentage point.
Personal Income
Current-dollar personal income increased $219.5 billion in the fourth quarter, a downward revision of $5.4 billion from the previous estimate. The increase primarily reflected increases in compensation, personal income receipts on assets, and proprietors’ income that were partly offset by a decrease in personal current transfer receipts (table 8).
Disposable personal income increased $202.5 billion, or 4.0 percent, in the fourth quarter, a downward revision of $9.2 billion from the previous estimate. Real disposable personal income increased 2.2 percent, a downward revision of 0.3 percentage point.
Personal saving was $809.2 billion in the fourth quarter, a downward revision of $22.4 billion from the previous estimate. The personal saving rate—personal saving as a percentage of disposable personal income—was 3.9 percent in the fourth quarter, a downward revision of 0.1 percentage point.
Updates to GDP
With the second estimate, downward revisions to private inventory investment and federal government spending were partly offset by upward revisions to state and local government spending, consumer spending, residential fixed investment, nonresidential fixed investment, and exports. Imports were revised up. For more information, refer to the Technical Note. For information on updates to GDP, refer to the “Additional Information” section that follows.
Updates to Third-Quarter Wages and Salaries
In addition to presenting updated estimates for the fourth quarter, today’s release presents revised estimates of third-quarter wages and salaries, personal taxes, and contributions for government social insurance, based on updated data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and salaries are now estimated to have increased $184.2 billion in the third quarter, an upward revision of $23.0 billion. Personal current taxes are now estimated to have increased $61.5 billion, an upward revision of $8.9 billion. Contributions for government social insurance are now estimated to have increased $23.2 billion, an upward revision of $3.0 billion. With the incorporation of these new data, real gross domestic income is now estimated to have increased 1.9 percent in the third quarter, an upward revision of 0.4 percentage point from the previously published estimate.
GDP for 2023
Real GDP increased 2.5 percent in 2023 (from the 2022 annual level to the 2023 annual level), compared with an increase of 1.9 percent in 2022 (table 1). The increase in real GDP in 2023 primarily reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, exports, and federal government spending that were partly offset by decreases in residential fixed investment and private inventory investment. Imports decreased (table 2).
Current-dollar GDP increased 6.3 percent, or $1.61 trillion, in 2023 to a level of $27.36 trillion, compared with an increase of 9.1 percent, or $2.15 trillion, in 2022 (tables 1 and 3).
The price index for gross domestic purchases increased 3.4 percent in 2023, compared with an increase of 6.8 percent in 2022 (table 4). The PCE price index increased 3.7 percent, compared with an increase of 6.5 percent. Excluding food and energy prices, the PCE price index increased 4.1 percent, compared with an increase of 5.2 percent.
Measured from the fourth quarter of 2022 to the fourth quarter of 2023, real GDP increased 3.1 percent during the period (table 5), compared with an increase of 0.7 percent from the fourth quarter of 2021 to the fourth quarter of 2022.
The price index for gross domestic purchases, as measured from the fourth quarter of 2022 to the fourth quarter of 2023, increased 2.4 percent, compared with an increase of 6.2 percent from the fourth quarter of 2021 to the fourth quarter of 2022. The PCE price index increased 2.8 percent, compared with an increase of 5.9 percent from the fourth quarter of 2021 to the fourth quarter of 2022. Excluding food and energy, the PCE price index increased 3.2 percent, compared with an increase of 5.1 percent.
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