Q4 GDP Second Estimate: Real GDP at 2.7%, Worse Than Forecast
This article was originally written by Doug Short. From 2016-2022, it was improved upon and updated by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at Advisor Perspectives/VettaFi.
The second estimate for Q4 GDP, to one decimal, came in at 2.7% (2.68% to two decimal places), a decrease from 3.2% (3.24% to two decimal places) for the Q3 third estimate. Investing.com had a consensus of 2.9%.
Here is the opening text from the Bureau of Economic Analysis news release:
Real gross domestic product (GDP) increased at an annual rate of 2.7 percent in the fourth quarter of 2022 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.2 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 2.9 percent. The updated estimates primarily reflected a downward revision to consumer spending that was partly offset by an upward revision to nonresidential fixed investment (refer to "Updates to GDP"). Imports, which are a subtraction in the calculation of GDP, were revised up. [Full Release]
Background on GDP
Real gross domestic product (GDP) measures the inflation-adjusted value of all goods and services produced by the economy. It is considered the broadest measure of economic activity and the primary indicator of an economy's health. The Bureaus of Economic Analysis (BEA) releases real GDP data on a monthly basis. There are 3 versions released a month apart, advance, second, and final, each incorporating data that was previously unavailable. Economists can use GDP to determine whether an economy is growing or experiencing a recession.