Real gross domestic product (GDP) increased at an annual rate of 33.4 percent in the third quarter of 2020, as efforts continued to reopen businesses and resume activities that were postponed or restricted due to COVID-19. The change was 0.3 percentage point higher than the “second” estimate released in November. In the second quarter of 2020, real GDP decreased 31.4 percent. For more details, including source data, see the Technical Note and “Federal Recovery Programs and BEA Statistics”.
Third-quarter GDP highlights
The third-quarter increase in real GDP reflected increases in consumer spending, inventory investment, exports, business investment, and housing investment that were partially offset by a decrease in government spending. Imports, a subtraction in the calculation of GDP, increased.
The increase in consumer spending reflected increases in services (led by health care) and goods (led by clothing and footwear as well as motor vehicles and parts). The increase in inventory investment reflected an increase in retail trade inventories (led by motor vehicle dealers). The decrease in government spending was in federal as well as state and local government.
Updates to GDP
The revision to GDP primarily reflected upward revisions to consumer spending and business investment that were partly offset by a downward revision to exports.
Corporate profits from current production
Profits increased 27.4 percent at a quarterly rate in the third quarter after decreasing 10.3 percent in the second quarter. Corporate profits increased 3.5 percent in the third quarter from one year ago. Profits were boosted by provisions from the Paycheck Protection Program.
- Profits of domestic nonfinancial corporations increased 44.3 percent after decreasing 12.9 percent.
- Profits of domestic financial corporations increased 2.6 percent after increasing 6.1 percent.
- Profits from the rest of the world increased 13.4 percent after decreasing 18.9 percent.
For more information, read the full report.