US GDP fell 3.5% in 2020

The real GDP of the United States decreased 3.5% in 2020, compared with a 2.2% increase in 2019, the Commerce Department reported Thursday.

The decline in real GDP in 2020 reflected decreases in Personal Consumption Expenditure (PCE), exports, investment in private inventories, non-residential fixed investment, and state and local government, which were partially offset due to increases in federal government spending and residential fixed investment. Imports decreased.

The decrease in PCE in 2020 was more than explained by a decrease in services (led by food and lodging services, medical care and recreational services).

The decline in exports reflected declines in both services (led by travel) and goods (mainly non-automotive capital goods).

GDP

The decline in private inventory investment comprised widespread declines led by retail trade (primarily motor vehicle dealers) and wholesale trade (primarily durable goods industries).

In other components of GDP, the decrease in non-residential fixed investment occurred with decreases in structures (led by mining exploration, wells and wells) and equipment (led by transportation equipment) that were partially offset by an increase in intellectual property products (more than accounted for by software).

The decrease in spending by state and local governments showed a decrease in consumer spending.

Likewise, the increase in federal government spending reflected an increase in non-defensive consumer spending (led by an increase in purchases of intermediate services that supported the processing and management of Pay Check Protection Program loan applications for part banks on behalf of the federal government).

The increase in residential fixed investment primarily reflected increases in improvements, as well as broker commissions and other property transfer costs.

Real Gross Domestic Product and Related Measures: Percent Change from Preceding Period