What Is the Current US GDP Rate?

Retail worker stocking a store full of clothing products
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The current U.S. gross domestic product (GDP) growth rate is 6.5% for the second quarter of 2021. That's according to the second quarter advance estimate from the Bureau of Economic Analysis (BEA). It means that the economy grew 6.5% between April and June compared to the previous quarter.

The COVID-19 pandemic has had a dramatic effect on the economy. For example, the GDP rate for the second quarter of 2020 showed a large contraction. The Q2 GDP rate was -31.2%, meaning the economy contracted at a rate of 31.2% between April and June 2020. That was the worst quarterly contraction in U.S. history. It came after the National Bureau of Economic Research declared that a recession began in February 2020. The second-worst contraction in history was 10.0% in the first quarter of 1958.

With the second quarter advance estimate of 6.5%, the U.S. economy is above the ideal growth rate of between 2% and 3%. That ideal rate is fast enough to provide sufficient jobs, but not so fast it will create inflation or an asset bubble. That's not a concern now because the economy is recovering from such a huge downturn.

According to the BEA, growth in Q2 is due to the continued economic recovery, reopening of businesses, and the continued government response to the pandemic. Personal consumption expenditures increased by 11.8%.

Real GDP, which removes the effects of inflation, was $19.4 trillion. The current-dollar GDP, also known as nominal GDP, does not remove the effects of inflation and was $22.7 trillion. In other words, if all the companies and people in the U.S. kept producing at that rate for a year, they'd make $22.7 trillion in goods and services.

The 6.5% is the change in real GDP between the second quarter—April through June—and the first three months of 2021. It's expressed as an annualized rate. For a wider comparison, we tracked the growth rate from 2007 to 2021. The grey bar shows the ideal growth rate of between 2% and 3%.

Revision Schedule

The BEA releases the GDP report toward the end of each month. There are three releases for each quarter:

  1. Advance estimate: Released one month after the quarter ends, it's often wildly different from the third estimate simply because all the trade and business inventory data is not in yet.
  2. Second estimate: More realistic, this one comes out two months after the quarter ends.
  3. Third estimate: Released three months after the quarter, it usually only tweaks the second estimate. 

US GDP Changes by Quarter

2021 Quarterly GDP

Q2: 6.5%

The largest component of GDP is consumer spending. It contributes to almost 70% of the economy.

In the BEA's advance estimate for Q2, consumer spending rose by 11.8%. Spending on durable goods, or long-lasting things like automobiles, furniture, and large appliances, increased by 9.9%. Spending on nondurable goods, such as groceries and gasoline, increased by 12.6%. Sales to services increased by 12.0%.

Business investment decreased by 3.5%. It was driven by investment in equipment, which rose by 13.0%, and intellectual property products, which increased by 10.7%.

Exports increased by 6.0% and imports rose by 7.8%.

Federal government spending decreased by 5%. State and local spending increased by 0.8%. States and cities, unlike the federal government, must keep a balanced budget.

Q1: 6.3%

In Q1, consumer spending rose by 11.4%. Spending on durable goods increased by 50.0%. Spending on nondurable goods increased by 15.9%. Sales to services increased by 3.9%.

Business investment decreased by 2.3%. It was driven by investment in equipment, which rose by 14.1%, and residential construction, which saw an increase of 13.3%.

Exports decreased by 2.9% and imports rose by 9.3%.

Federal government spending increased by 11.3%. State and local spending decreased by 0.1%.

2020 Quarterly GDP

Real GDP declined by 3.4% in 2020.

Q4: 4.5%

In Q4, consumer spending rose by 3.4%. Spending on durable goods increased by 1.1% from Q3. Spending on nondurable goods decreased by 1.1%. Sales to services increased by 5.3%.

Business investment increased by 24.7%. It was mostly driven by investment in equipment, which rose by 26.4%, and residential construction, which saw an increase of 34.4%.

Exports increased by 22.5% and imports rose by 31.3%.

Federal government spending declined by 3.1%. State and local spending increased by 1.2% as tax revenues fell.

Q3: 33.8%

In Q3, consumer spending rose by 41.4% as shoppers hit the stores after some pandemic restrictions were lifted. Spending on durable goods skyrocketed 89.0%—a large jump from Q2. Spending on nondurable goods increased by 31.8% and sales to services rose by 37.5%.

Business investment increased by 82.1%. It was mostly driven by investment in equipment which rose by 55.9%—much higher than it was in Q2. Only a few areas saw a decline, including commercial construction, which is mostly apartment buildings; it fell another 15.3% after seeing a decline in Q2. Many workers abandoned their offices when they began working from home. This may have contributed to the rise in residential construction, which saw an increase of 59.9%, making many people wonder if this is a real estate bubble that will crash.

Exports increased by 54.5%, led by automotive vehicles and parts. Imports rose by 89.2% as international trade revived.

An increase in exports increases GDP, while an increase in imports lowers it. As the dollar's value strengthens, it makes exports more expensive.

Federal government spending declined by 5.4%, as administrative costs related to CARES Act and other stimulus packages fell. State and local spending increased by 0.1%.

Q2: -31.2%

The GDP declined 31.2% during the second quarter of 2020. Consumer spending fell by 33.4%. Spending on durable goods only dropped by 1.5% while nondurable goods spending fell by 13.9%. Sales to services fell by a painful 42.4%.

Business investment plummeted by 48.8%. The biggest drop was the investment in commercial construction, which fell by 46.8%. Equipment didn't do much better, declining by 36.2%. Homebuilding shrank by 30.7%.

Exports fell by 59.9% and imports fell by 53.1% as international trade ground to a halt. Federal government spending rose by 20.6%, as Congress launched over $2 trillion in stimulus measures. State and local spending fell by 5.5%.

The BEA's advance estimate was a drop of 32.9%. The second estimate was a decline of 31.7%.

Q1: -5.1%

During the first quarter of 2020, the GDP declined by 5.1%. Consumer spending fell by 6.9%. Spending on durable goods plummeted by 12.0%, while spending on nondurable goods rose by 7.1%. Sales to services fell by 10.0%.

Business investment fell by 5.3%. Investment in equipment fell by 21.3%. Commercial construction fell by 0.9% and residential construction rose by 20.4%.

Exports fell by 16.3% and imports fell by 13.1%. Federal government spending rose by 2.4%, while state and local spending rose by 4.4%.

The BEA's advance estimate was a decline of 4.8%. Its second and third estimates were both 5.0% drops.

2019 Quarterly GDP

Real GDP grew 2.3% in 2019.

Q4: 2.4%

The fourth quarter of 2019 saw a 1.9% increase, just slightly lower than the BEA's original estimates of 2.1%. Consumer spending rose by 1.7%. Durable goods orders rose by 5.0%, while those for nondurable goods fell by 0.3%. Spending on services rose by 1.7%.

Business investment fell by 6.5%. Investment in equipment fell by 4.9%, while commercial construction fell by 8.0%. Residential construction rose by 1.1%.

Exports rose by 1.2%, while imports fell by 8.5%. Federal government spending rose by 3.5% thanks to military spending, which increased by 6.0%. State and local spending rose by 2.7%.

The BEA kept its estimate at 2.1% for the advance, second, and third estimates.

Q3: 2.8%

The BEA thought the third quarter of 2019 would see a 1.9% increase, but it actually increased by 2.8%. Consumer spending rose by 3.2%. Spending on durable goods rose by 8.5% and nondurable goods by 3.1%. Spending on services rose by 2.4%.

Business investment rose by 1.1%. Investment in equipment fell by 5.1%, while commercial construction rose by 14.0%. Residential construction rose by 3.6%.

Exports fell by 0.8%, while imports decreased by 1.1%. Federal government spending rose by 3.6%, driven by a 4.5% rise in military spending. State and local spending rose by 1.1%.

The BEA's advance estimate was 1.9%, while the second estimate was 2.1%. The third estimate was also 2.1%.

Q2: 1.5%

The BEA originally thought GDP would see an increase of 2.1%, but it actually rose 3.2%. Consumer spending increased by 3.6%. Spending on durable goods rose 10.8%, while spending on nondurable goods rose by 5.1%. Spending on services increased by 2.0%. Business investment rose by 2.6%. Investment in equipment was up by 2.5%, while commercial construction was up 14.3%. Residential construction was up 4.1%.  

Exports fell by 2.2% while imports rose by 1.7%. Federal government spending rose 8.9%, boosted by a 4.2% increase in military spending. State and local spending rose by 2.7%.

The BEA's advance estimate was 2.1%, while the second estimate was 2.0%. The third estimate was 2.0%.

Q1: 2.4%

The BEA originally thought the first quarter of 2019 would see a 3.2% increase, but it actually saw a slightly smaller bump at 2.4%. Consumer spending rose by 0.6%. That's typical for the first quarter because it's right after the holiday shopping season. Spending on durable goods fell by 0.7%, and spending on nondurable goods rose by 2.4%. Spending on services rose by 0.3%.

Business investment rose by 6.4%. Investment in equipment increased by 4.4%. Commercial construction rose 4.4%, while residential construction rose 0.1%.

Exports rose by 3.1% while imports were unchanged. Federal government spending rose by 1.4% even though military spending rose 5.2%. State and local spending rose by 3.5%.

The BEA's advance estimate was 3.2%, while the second estimate was 3.1%. The third estimate was 3.1%.

Key Takeaways

  • U.S. GDP increased at an annualized rate of 6.5% between the first and second quarters of 2021, according to the advance estimate from the BEA.
  • This comes after a first quarter increase of 6.3%.
  • The primary factors in the first quarter increase were the increase in COVID-19 vaccinations and businesses reopening.