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Technical Note
Gross Domestic Product
First Quarter of 2008 (Preliminary)
May 29, 2008
This technical note provides background information about the source data and
estimating methods used to produce the estimates presented in the GDP news release.
The complete set of estimates for the first quarter is available on BEA's Web site at
www.bea.gov; a brief summary of "highlights" is also posted on the Web site. In a few
weeks, the estimates will be published in BEA's monthly journal, the Survey of Current
Business, along with a more detailed analysis of the estimates ("GDP and the
Economy").
Sources of Revision to Real GDP
The real GDP growth rate in the first quarter was revised from 0.6 percent to 0.9 percent
(annual rate).
•
•
•
Imports and exports were revised down, reflecting newly available Census
Bureau goods data for March.
Business investment in nonresidential structures was revised up, reflecting newly
available Census Bureau value of construction put in place data for March and
revised data for January and February.
Inventory investment was revised down, reflecting newly available Census
Bureau inventory data for March and revised data for January and February.
Corporate Profits
Profits from current production increased $5.2 billion, or 0.3 percent (quarterly rate), in
the first quarter, after decreasing $52.9 billion, or 3.3 percent, in the fourth.
The Economic Stimulus Act of 2008 provided for a first-year bonus depreciation of 50
percent for qualifying property purchased and put in place in 2008. The law also raised
the ceiling for small business expensing under Internal Revenue Code Section 179 from
$128,000 to $250,000.
Profits from current production are not affected by these provisions because they do not
depend on the depreciation-accounting practices used for federal income tax returns;
rather, they are based on depreciation of fixed assets valued at current cost and using
consistent depreciation profiles based on used-asset prices. The additional depreciation
provided for by the 2008 Act is estimated to have increased tax-based depreciation
expenses in the first quarter by $139.7 billion (annual rate) and reduced profits before
tax, which is based on earnings reported on tax returns, by the same amount. The
capital consumption adjustment, which is the difference between the depreciation
specified in the tax code and the depreciation underlying profits from current production,
also increased by the same amount because the Act raised tax depreciation by $139.7
billion. First-quarter profits tax liability was reduced by $37.8 billion, and profits after tax
were reduced by $102.0 billion.
Revisions to Wages and Salaries and Disposable Personal Income
In addition to presenting preliminary estimates for the first quarter, today's release also
presents revised estimates of fourth-quarter wages and salaries, personal taxes, and
contributions for government social insurance. Wage and salary disbursements are now
estimated to have increased $85.7 billion in the fourth quarter, an upward revision of
$26.0 billion. These estimates reflect newly available wage and salary tabulations for
the fourth quarter from the Bureau of Labor Statistics quarterly census of employment
and wages. These data are more comprehensive than the monthly employment and
earnings data that were used for the earlier estimates--they include the pay of
supervisors and irregular pay, such as bonuses and gains from the exercise of stock
options.
Real disposable personal income is now estimated to have increased 0.9 percent in the
fourth quarter and to have increased 1.8 percent in the first. (By comparison, the
estimates that were available last month showed an increase of 0.1 percent in the fourth
quarter and an increase of 1.4 percent in the first.)
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606
Table A.--SOURCE DATA FOR THE ADVANCE AND PRELIMINARY
ESTIMATES OF GDP FOR THE FIRST QUARTER OF 2008
This table shows the actual data used for the preliminary estimate of GDP for the first quarter of
2008. For these key series, actual data for March were not available in time for inclusion in the
advance GDP estimate released on April 30, 2008, and BEA made assumptions for these source
data. The numbers in brackets show the March values that had been assumed for the advance
estimate. For most series, the data incorporated for February and, in some cases, for January, were
preliminary, and the numbers shown in brackets are the values used last month.
All series shown in the table are in billions of dollars, seasonally adjusted at annual rates, and are
published by the Bureau of the Census.
Oct.
2007
Nov.
Dec.
Jan.
2008
Feb.
Mar.
369.1
374.4
373.8
373.2
{370.1}
375.3
{369.7}
382.3
{367.9}
49.1
47.4
43.6
53.6
37.3
{37.3}
38.0
{35.2}
Residential structures:
Value of new residential
construction put in place:
3
Single family………………………..
274.6
260.5
246.3
235.3
{234.6}
223.1
{221.3}
221.3
{209.8}
4
46.6
45.9
43.6
43.1
{43.4}
43.9
{43.2}
43.7
{43.0}
Change in private inventories:
5 Change in inventories for nondurable
manufacturing………………………..
-2.8
{-4.7}
21.3
{18.3}
12.0
{14.2}
62.5
{60.9}
20.7
{16.9}
26.7
{19.9}
5a Change in inventories for merchant
wholesale and retail industries other
than motor vehicles and equipment…
43.4
-0.1
64.0
77.7
32.8
{56.8}
-16.6
{37.0}
Net exports:
Exports of goods:
6 U.S. exports of goods,
international-transactionsaccounts basis…………………….
1206.9
1209.3
1235.3
1256.8
6a
Excluding gold………………………
1193.9
1198.7
1222.9
1238.9
Imports of goods:
U.S. imports of goods,
international-transactionsaccounts basis……………………..
2013.6
2083.2
2051.3
2090.2
2005.3
2078.2
2043.5
2079.5
8 Net exports of goods…………………..
-806.7
-873.9
-816.0
-833.3
8a
-811.4
-879.5
-820.6
-840.6
277.7
279.8
273.1
272.9
{273.3}
Private fixed investment:
Nonresidential structures:
1 Value of new nonresidential
construction put in place………..
2
7
Equipment and software:
Manufacturers' shipments of
complete aircraft……………………
Multifamily…………………………..
7a
Excluding gold……………………..
Excluding gold……………………..
Government:
State and local:
Structures:
9
Value of new construction put
in place……………………………..
1287.3 1256.8
{1287.5} {1281.9}
1260.8 1227.4
{1261.0} {1256.5}
2152.4 2080.0
{2162.6} {2152.0}
2130.8 2058.6
{2140.8} {2131.1}
-865.1
-823.2
{-875.1} {-870.1}
-870.0
-831.3
{-879.7} {-874.6}
274.2
{274.3}
276.2
{273.8}
@FedFRASER