Real gross domestic product (GDP) increased at an annual rate of 1.3 percent in the first quarter of 2023 (table 1), according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6 percent.

The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month.  In the advance estimate, the increase in real GDP was 1.1 percent (refer to “Updates to GDP”). The updated estimates primarily reflected an upward revision to private inventory investment.

The increase in real GDP reflected increases in consumer spending, exports, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

Compared to the fourth quarter, the deceleration in real GDP in the first quarter primarily reflected a downturn in private inventory investment and a slowdown in nonresidential fixed investment. These movements were partly offset by an acceleration in consumer spending, an upturn in exports, and a smaller decrease in residential fixed investment. Imports turned up.

Current‑dollar GDP increased 5.4 percent at an annual rate, or $348.3 billion, in the first quarter to a level of $26.49 trillion, an upward revision of $20.4 billion from the previous estimate (tables 1 and 3). More information on the source data that underlie the estimates is available in the “Key Source Data and Assumptions” file on BEA’s website.

The price index for gross domestic purchases increased 3.8 percent in the first quarter, the same as previously estimated. The personal consumption expenditures (PCE) price index increased 4.2 percent, the same as previously estimated. Excluding food and energy prices, the PCE price index increased 5.0 percent, an upward revision of 0.1 percentage point.

Personal Income

Current-dollar personal income increased $251.3 billion in the first quarter, a downward revision of $27.6 billion from the previous estimate. The increase in the first quarter primarily reflected increases in compensation (led by private wages and salaries) and government social benefits (table 8).

Disposable personal income increased $561.6 billion, or 12.3 percent, in the first quarter, a downward revision of $9.6 billion from the previous estimate. Real disposable personal income increased 7.8 percent, a downward revision of 0.2 percentage point.

Personal saving was $829.2 billion in the first quarter, a downward revision of $6.1 billion from the previous estimate. The personal saving rate—personal saving as a percentage of disposable personal income—was 4.2 percent in the first quarter, a downward revision of 0.6 percentage point.

Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI) decreased 2.3 percent in the first quarter, compared with a decrease of 3.3 percent (revised) in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, decreased 0.5 percent in the first quarter, compared with a decrease of 0.4 percent (revised) in the fourth quarter (table 1).

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $151.1 billion in the first quarter, compared with a decrease of $60.5 billion in the fourth quarter (table 10).

Profits of domestic financial corporations decreased $25.4 billion in the first quarter, compared with a decrease of $59.0 billion in the fourth quarter. Profits of domestic nonfinancial corporations decreased $109.3 billion, compared with a decrease of $22.9 billion. Rest-of-the-world profits (net) decreased $16.4 billion, in contrast to an increase of $21.4 billion. In the first quarter, receipts increased $12.2 billion, and payments increased $28.6 billion.

Updates to GDP

With the second estimate, upward revisions to private inventory investment, state and local government spending, nonresidential fixed investment, consumer spending, and exports were partly offset by a downward revision to residential fixed investment. Imports were revised up. For more information, refer to the Technical Note. For information on updates to GDP, refer to the “Additional Information” section that follows.,

Updates to Fourth-Quarter Wages and Salaries

In addition to presenting updated estimates for the first quarter, today’s release presents revised estimates of fourth-quarter wages and salaries, personal taxes, and contributions for government social insurance, based on updated data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and salaries are now estimated to have increased $53.0 billion in the fourth quarter, a downward revision of $135.4 billion. Personal current taxes are now estimated to have decreased $20.3 billion, a downward revision of $16.2 billion. Contributions for government social insurance are now estimated to have increased $8.1 billion, a downward revision of $17.4 billion. With the incorporation of these new data, real gross domestic income is now estimated to have decreased 3.3 percent in the fourth quarter, a downward revision of 2.2 percentage points from the previously published estimate.