TECHNICAL NOTE - COVID-19 Impact on the Second-Quarter 2021 GDP Estimate: The increase in second quarter GDP reflected the continued economic recovery reopening of establishments and continued government response related to the COVID-19 pandemic. In the second quarter government assistance payments in the form of loans to businesses and grants to state and local governments increased while social benefits to households such as the direct economic impact payments declined. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the second quarter because the impacts are generally embedded in source data and cannot be separately identified.  

 

Real gross domestic product (GDP) increased at an annual rate of 6.6 percent in the second quarter of 2021 according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter real GDP increased 6.3 percent. The increase in real GDP in the second quarter reflected increases in personal consumption expenditures (PCE) nonresidential fixed investment exports and state and local government spending that were partly offset by decreases in private inventory investment residential fixed investment and federal government spending. Imports which are a subtraction in the calculation of GDP increased. 

 

The increase in PCE reflected increases in services (led by food services and accommodations) and goods (led by "other" nondurable goods notably pharmaceutical products as well as clothing and footwear). The increase in nonresidential fixed investment reflected increases in intellectual property products (led by research and development as well as software) and equipment (led by transportation equipment). The increase in exports reflected an increase in goods (led by nonautomotive capital goods) and services

(led by travel). The decrease in private inventory investment was led by a decrease in retail trade inventories. The decrease in federal government spending primarily reflected a decrease in nondefense spending on intermediate goods and services. In the second quarter nondefense services decreased as the processing and administration of Paycheck Protection Program (PPP) loan applications by banks on behalf of the federal government declined.

Updates to First-Quarter Estimates: In addition to presenting updated estimates for the second quarter today's release presents revised estimates of first-quarter personal taxes based on updated data from the Treasury Department's™ Office of Tax Analysis. Real GDI increased 6.3 percent in the first quarter the same rate as the previously published estimate.