Weekly Economic Trends and Indicators

Real gross domestic product (GDP) for the six-county Quad Cities Chamber service area was unchanged in 2022 according to recent data released by the Bureau of Economic Analysis (BEA). Real GDP is adjusted for inflation. In current dollars (not adjusted for inflation), GDP in the six-county area rose from about $29.4 billion to about $31.6 billion. Essentially the entire increase was due to inflation of approximately 7.7% in the region in 2022.

GDP is reported quarterly by the BEA for the entire U.S. economy. However, the BEA only reports on local and regional GDP once a year—in December of the following year. Therefore, at the local level we are always about a year behind in tracking the most comprehensive statistic that measures total spending and income in the economy.

The BEA also conducts periodic revisions of local GDP data. This year’s release included a revision of data going back to 2017. (The next revision will look back as far as 2001.) The key takeaway from the revision was that real GDP in the region did not fall as much during the pandemic year (2020) as originally reported. As a result, the rebound in 2021 was not as large as originally reported either. For the six-county region, real GDP grew by 0.4 percent from 2019 to 2021. In other words, whatever was lost in 2020 due to the COVID-19 shutdowns and the resulting recession was gained back in 2021 with a small amount of growth.

As expected, real GDP growth was less robust in 2022 than 2021. Whereas 2021 was a year of gaining back what was lost during the pandemic, 2022 represented a reversion to the mean. Real GDP growth in the region had been mostly flat in the last half of the 2010s, and 2022 returned to the pre-pandemic trend. Of course, 2022 was also a year of the highest inflation in decades and the start of a long campaign of interest rate increases by the Federal Reserve.

Looking at the sector-level data confirms what we have discussed in previous weeks. Manufacturing growth was strong in 2022. Manufacturing and information were among the best performing sectors in the region. Transportation was one of the poorest performing. Again, this is not surprising, as this follows a nationwide trend that has some analysts saying that we are already in a “transportation recession.”

While 2023 is nearly over, it will be a year before we have official data on this year’s GDP. We can expect that rising interest rates this year will have further slowed manufacturing, but this should be offset by strong gains in leisure and hospitality.

Next week: 2023 year in review