US GDP Current Statistics

What Made the U.S. Economy Contract 5.0% in Q1 2020

Retail worker stocking a store full of clothing products
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The current U.S. GDP growth rate is -5.0%. That means the United States economy contracted at a rate of 5.0% in the first quarter of 2020. The first quarter is January through March. The National Bureau of Economic Research declared that a recession began in February.

The U.S. economy is well below the ideal growth rate of between 2% and 3%. That rate is fast enough to provide sufficient jobs, but not so fast it will create inflation or an asset bubble.

The economy contracted in the first quarter of 2020 because of the COVID-19 pandemic.

The current U.S. gross domestic product annual rate is $21.539 trillion as of the first quarter. In other words, if all the companies and people in the United States kept producing at that rate for a year, they'd make $21.539 trillion in goods and services.

For a wider comparison, we tracked the growth rate from 2008 to 2020. The grey bar shows the ideal growth rate between 2% and 3%.

Revision Schedule Estimates

The Bureau of Economic Analysis releases the GDP report at the end of each month. Each quarterly report has the following three releases.

  1. Advance Estimate: Released one month after the quarter ends. It's often wildly different from the Third Estimate, simply because all of the trade and business inventory data is not in yet.
  2. Second Estimate: Comes out two months after the quarter. It's more realistic.
  3. Third Estimate: Released three months after the quarter. Usually only tweaks the Second Estimate. 

The BEA makes in-depth revisions annually. Here is the schedule since 2013:

  • July 29, 2018: All estimates since 1929 based on improved estimates.
  • July 29, 2019. All estimates since Q1 2014.
  • The next revision will be July 29, 2020. It will cover all estimates since 2016.

Current and Recent U.S. GDP

For each quarter below, you'll see the most recent estimates first. That's followed by prior estimates. Admittedly, this presentation is a little confusing, but it's important to see how the data continually changes. A record of these revisions isn't readily available anywhere else.

2020

Q1: -5.0%

The BEA's Third Estimate said GDP was -5.0%.

The largest component of GDP is consumer spending. It contributes almost 68% to the economy. In Q1, it fell by 6.8%. Spending on durable goods plummeted by 13.8%. That's for long-lasting things like automobiles, furniture, and large appliances. Spending on non-durable goods rose by 8.0%. Sales to services fell by 9.8%.

Business investment fell by 10.2%. Investment in equipment fell by a whopping 16.6%. Commercial construction, which is mostly apartment buildings, rose by 2.6%. Residential construction rose by 18.2%, making many people wonder if the real estate market is creating a bubble that will crash.

Exports fell by 9.0%. Most of U.S. exports are oil and commercial aircraft. Both of these industries were hard-hit by the pandemic. Imports fell by 15.7%. 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 rose by 2.0%, partly because of the CARES Act and other stimulus packages. State and local spending rose by 0.5%.

The BEA's Advance Estimate was -4.8%. Its Second Estimate was -5.0%.

2019: 2.3%

Nominal GDP Components 2019
GDP Component Q1* Q2* Q3* Q4*
Personal Expenditures $14.266 $14.511 $14.678 $14.795
Business Investments   $3.783   $3.749   $3.745   $3.698
Exports  -$0.633  -$0.662  -$0.653  -$0.578
Government   $3.683   $3.742   $3.722   $3.814
Total $21.098 $21.340 $21.542 $21.729

*In trillions of dollars.

Q4: 2.1%

Consumer spending rose by 1.8%. Durable goods orders rose by 2.8%, while those for non-durable goods fell by 0.6%. Spending on services rose by 2.4%.

Business investment fell by 6.0%. Investment in equipment fell by 4.3%, while commercial construction fell by 7.2%. Residential construction rose by 6.5%.

Exports rose by 2.1% while imports fell by 8.4%. Federal government spending rose by 3.4% thanks to military spending, which increased by 4.4%. State and local spending rose by 2.0%.

Q3: 2.1%

Consumer spending rose by 3.2%. Spending on durable goods rose by 8.1% and non-durable goods by 3.9%. Spending on services rose by 2.2%.

Business investment fell by 1.0%. Investment in equipment fell by 3.8%, while commercial construction fell by 9.9%. Residential construction rose by 4.6%.

Exports rose by 1.0% while imports increased by 1.8%. Federal government spending rose by 3.3% even though military spending only rose by 2.2%. State and local spending rose by 0.7%.

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

Q2: 2.1%

Consumer spending rose by 4.3%. Spending on durable goods rose 12.9%, while spending on non-durable goods rose 6%. Spending on services increased by 2.5%. Business investment fell 5.5%. Investment in equipment increased by 0.7%, while commercial construction fell 10.6%.  Exports fell by 5.2%. Imports only rose by 0.1%, subtracting from GDP. The trade war is decreasing all aspects of international trade. Federal government spending rose 7.9%, boosted by a 2.8% increase in military spending. State and local spending rose by 3.2%.

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

Q1: 3.1%

Consumer spending rose by 1.2%. That's typical for the first quarter because it's right after the holiday shopping season. Spending on durable goods fell by 5.3%. Spending on non-durable goods rose by 1.7%. Spending on services rose by 2.0%. Business investment rose 5.1%. Investment in equipment increased 0.2%, while commercial construction fell 0.8%. Residential construction dropped 2.8%. Exports rose by 3.7% while imports fell 3.7%, which adds to GDP. Federal government spending was flat even though military spending rose 4.1%. State and local spending rose by 3.9%.

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

2018: 2.9%

Nominal GDP Components 2018
GDP Component Q1* Q2* Q3* Q4* 2018 Change
Persona Expenditures $13.939 $13.939 $14.114 $20.897 $13.998 3.0%
Business Investments   $3.542   $3.561   $3.684   $3.725   $3.628 5.1%
Exports  -$0.629  -$0.568  -$0.671  -$0.684  -$0.638 --
Government   $3.521   $3.577   $3.622   $3.644   $3.591 1.7%
Total $20.163 $20.510 $20.749 $20.897 $20.580 2.9%

Q4: 1.1% (Was 2.2% in the Original Estimate)

  • Advance: Auto sales boosted durable goods, which rose 5.9%. Businesses increased spending on software and research by 13.1%. The federal government increased deficit spending primarily on defense. It rose by 6.9%.
  • Second: The BEA revised its estimate down to 2.6%.
  • Final: Robust business and government spending made up for moderate consumer spending. Total growth was 2.2%.

Q3: 2.9% (Was 3.4% in the Original Estimate)

  • Advance: Growth was driven by consumer spending, which rose by 4%. Business spending was also robust, rising 12%. It was driven by a 13.3% increase in intellectual property products, like patents. On the other hand, commercial construction decreased by 7.9%, and home building dropped 4%. Exports fell by 3.5%, but imports rose by 9.1%. It will probably worsen the U.S. trade deficit. Government spending rose by 3.3%.
  • Second: The BEA kept its estimate at 3.5%.
  • Final: The BEA revised the estimate down slightly to 3.4% based on updated data.

Q2: 3.5% (Was 4.2% in the Original Estimate)

  • Advance: Consumer spending rose 4%. Business investment fell 0.5%. A 13.3% increase in commercial construction was offset by a 1.1% drop in homebuilding. Exports rose by 13.3%. Analysts report that many businesses shipped goods early to avoid tariffs. As a result, they expect a drop in exports in the third quarter.rose 4.8%. Government spending rose a moderate 2.1%.
  • Second: The BEA revised its estimate up to 4.2%. Commercial real estate construction was a little higher than originally estimated.
  • Final: The BEA confirmed its estimate of 4.2%.

Q1: 2.5% (Was 2.2% in the Original Estimate)

  • Advance: Consumer spending rose by 1.1%. Durable goods fell by 3.3%. Spending on non-durable goods rose by 0.1%. Spending on services rose by 2.1%. Business investment rose 7.3%. Investment in equipment increased by 4.7%, while commercial construction rose a robust 12.3%.  Exports rose by 4.8%. Imports only increased by 2.6%, subtracting from GDP. As the dollar's value weakens, it makes imports more expensive. Federal government spending rose 1.7%, boosted by a 1.8% increase in military spending. State and local spending rose by 0.8%.
  • Second: The BEA revised its estimate down to 2.0%. It based the revision on new data on personal consumption expenditures and inventory investment.
  • Final: The BEA revised its estimate by up to 2.2%.

Q1: 2.5% (Was 2.2% in the Original Estimate)

  • Advance: Consumer spending rose by 1.1%. Durable goods fell by 3.3%. Spending on non-durable goods rose by 0.1%. Spending on services rose by 2.1%. Business investment rose 7.3%. Investment in equipment increased by 4.7%, while commercial construction rose a robust 12.3%.  Exports rose by 4.8%. Imports only increased by 2.6%, subtracting from GDP. As the dollar's value weakens, it makes imports more expensive. Federal government spending rose 1.7%, boosted by a 1.8% increase in military spending. State and local spending rose by 0.8%.
  • Second: The BEA revised its estimate down to 2.0%. It based the revision on new data on personal consumption expenditures and inventory investment.
  • Final: The BEA revised its estimate by up to 2.2%.
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Article Sources

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