Real gross domestic product increased at an annual rate of 2.1% in Q2 2023, according to the second estimate. The latest estimate is slower than the expected 2.4% growth but is a faster pace than the Q1 2023 GDP final estimate of 2.0%.
Here is the opening text from the Bureau of Economic Analysis news release:
Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2023, according to the “second” estimate. In the first quarter, real GDP increased 2.0 percent. The increase in the second quarter primarily reflected increases in consumer spending and business investment that were partly offset by a decrease in exports. Imports, which are a subtraction in the calculation of GDP, decreased. [Full Release]
Gross Domestic Product (GDP)
Real gross domestic product (GDP) measures how fast or slowly the economy is growing and 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.
Here is a look at quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows the annualized percentage change from the preceding quarter in real (inflation-adjusted) gross domestic product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.17% average (arithmetic mean) and the 10-year moving average, currently at 2.45%.
The chart above has many interesting data points but can be quite overwhelming to look at. This next chart is a simplified version starting in 2007.
Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 15.1% below trend.
A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. Beginning in 1947, the average year-over-year rate at the start of recessions is 3.29% with a range of 1.28% to 6.78%. The current year-over-year rate for real GDP is at 2.47%, a level below six of the twelve recession starts during this time frame.
In summary, the Q2 2023 GDP second estimate of 2.1% showed faster economic growth than Q1 but was slower than the advance estimate of 2.4%. Although real GDP is still at a slower pace than Q4 2022 (2.6%), the pickup in the second quarter shows that the economy remained resilient throughout the first half of this year.
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 VettaFi | Advisor Perspectives
Other GDP updates (updated after GDP monthly piece):
Real GDP Per Capita
Visualizing GDP
Read more updates by Jen Nash
Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 15.1% below trend.
