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 6.7 percent in the second quarter of 2021 according to the ""third"" estimate released by the Bureau of Economic Analysis. In the first quarter real GDP increased 6.3 percent. In the second estimate the increase in real GDP was 6.6 percent. Upward revisions to personal consumption expenditures (PCE) exports and private inventory investment were partly offset by an upward revision to imports which are a subtraction in the calculation of GDP. The increase in real GDP in the second quarter reflected increases in 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 equipment (led by transportation equipment) and intellectual property products (led by software as well as research and development). The increase in exports reflected increases in goods (led by nonautomotive capital goods) and in 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.

 

In the third estimate for the second quarter real GDP increased 6.7 percent an upward revision of 0.1 percentage point. The revision primarily reflected upward revisions to PCE exports private inventory investment that were partly offset by an upward revision to imports and downward revisions to residential fixed investment state and local government spending and federal government spending.