Real GDP rose 2.4 percent in the second quarter of 2023, seasonally-adjusted, annualized.

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GDP and GDI data from the BEA, chart by Mish

GDP and GDI Chart Notes

• Gross Domestic Product (GDP) and Gross Domestic Income (GDI) are two measures of the same thing, both from the Bureau of Economic Analysis (BEA).
• GDI numbers are not available for the initial estimate for the quarter by the BEA.
• Real Final Sales is the bottom line estimate of GDP. The difference between GDP and RFS is inventory adjustment that nets to zero over time.

The Bloomberg Econoday consensus estimate for GDP was 1.5 percent. The BEA Report of 2.4 percent handily beat expectations.

2023 Q2 Numbers Seasonally Adjusted Annualized Rate

• Real GDP rose 2.4 percent.
• Real Final Sales (RFS) were up 2.3 percent.
• Inventory adjustments subtracted 0.1 percentage points (PP) from GDP.
• Real Final Sales to Private Domestic Purchasers rose 2.3 percent.
• Personal Consumption Expenditures (PCE) rose  2.6 percent. 
• The PCE price index rose 4.1 percent.
• Gross Private Domestic Investment rose 5.7 percent. Credit the Inflation Reduction Act.
• Residential Investment fell 4.2 percent.
• Net Exports fell 10.8 percent.
• Durable Goods spending rose 0.4 percent.

2023 Q2 Contributions to GDP

• Personal Consumption Expenditures (PCE) contributed  1.12 PP. 
• Services, a component of PCE, contributed 0.95 PP.
• Residential Investment subtracted 0.16 PP
• Gross Private Domestic Investment added 0.97 PP.
• Change in Private Inventories added 0.14 PP.
• Net Exports subtracted 1.28 PP while Net Imports added 1.16. The pair nearly cancelled.
• Government consumption expenditures added 0.45 PP.

GDP Contribution Synopsis

PCE Services, Private Domestic Investment, and Government spending are the three main components at 0.95 PP, 0.97 PP, and 0.45 respectively.

Housing, net import/exports, and inventories had little impact.

Real GDP and GDI in Billions of Dollars

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Real GDP and GDI in Billions of Dollars Since 2003

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Over time, GDP and GDI match. Revisions eventually take care of things.

The NBER, the official arbiter of recessions, averages GDP and GDI in determining recessions. We do not have a GDI number to report for 2023 Q3.

But note that GDI lagged in the Great Recession as well (first blue box in the above chart).

Averaging GDP and GDI for the 2022 Q4 and 2023 Q1 nets to something close to zero. The economy is not humming along as widely believed.

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