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Technical Note
Gross Domestic Product
Fourth Quarter of 2005 (Advance)
January 27, 2006
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 fourth 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 ("The Business
Situation").
Source Data for the Advance Estimate
The advance GDP estimate for the fourth quarter of 2005 is based on source data that
are incomplete and subject to revision. Three months of source data were available for
consumer spending on goods; shipments of capital equipment other than aircraft; motor
vehicle sales and inventories; manufacturing durables inventories; federal government
outlays; and consumer, producer, and international prices. Only two months of data
were available for most other key data sources; BEA’s assumptions for the third month
are shown in table A. Among those assumptions are the following:
•
•
•
•
an increase in nondurable manufacturing inventories,
an increase in non-motor-vehicle merchant wholesale and retail inventories,
a decrease in exports of goods, excluding gold, and
an increase in imports of goods, excluding gold.
National defense consumption expenditures and gross investment decreased 13.1
percent in the fourth quarter after increasing 10.0 percent in the third. The source data
include Department of Defense outlays from the Monthly Treasury Statement for
October through December. In October 2005 DOD made a lump sum contribution to the
Uniformed Services Retiree Health Care Fund to fund post-retirement health benefits of
current military personnel for the entire fiscal year; this lump sum contribution offset the
decline in other DOD outlays in the fourth quarter. BEA adjusts the timing of DOD
outlays to show the accrual over the year of these one-time payments.
Prices
The price index for gross domestic purchases increased 3.3 percent in the fourth quarter
after increasing 4.2 percent in the third. Excluding food and energy prices, the price
index for gross domestic purchases increased 2.9 percent after increasing 2.5 percent.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606
Table A. KEY ASSUMPTIONS FOR THE ADVANCE ESTIMATE OF GDP
FOR THE FOURTH QUARTER OF 2005
For many of the key series used to prepare the advance estimate of GDP, including retail sales,
unit automobile and truck sales and inventories, manufacturers' shipments of nondefense
capital goods (other than aircraft), manufacturers' inventories of durable goods, federal defense
spending, and consumer, producer, and international price indexes, actual data are available for all
months of the quarter.
For the key series shown in this table, actual data for the third month of the quarter usually are not
available in time for inclusion in the advance GDP estimate. BEA makes assumptions for the source
data that are not yet available; assumptions for December 2005 are shown in the last column of the
table. For most series shown, the data for November are preliminary and subject to further revision.
Occasionally, the data for earlier months are also subject to revision.
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.
2005
Jul.
Private fixed investment:
Nonresidential structures:
1 Value of new nonresidential
construction put in place………..
Aug.
Sep.
Oct.
Nov.
Dec.*
242.9
248.9
250.5
249.0
250.5
249.7
Equipment and software:
Manufacturers' shipments of
complete aircraft…………………..
29.6
40.2
14.3
27.8
26.6
27.2
Residential structures:
Value of new residential
construction put in place:
3
Single family………………………..
421.7
425.6
435.0
440.1
446.5
448.8
46.3
47.2
48.1
48.8
48.5
48.4
Change in private inventories:
5 Change in inventories for nondurable
manufacturing………………………..
5.0
-3.6
2.2
17.0
-8.0
10.7
5a Change in inventories for merchant
wholesale and retail industries other
than motor vehicles and equipment…
3.0
47.1
25.5
-1.9
27.3
45.7
Net exports:
Exports of goods:
6 U.S. exports of goods,
international-transactionsaccounts basis……………………
900.8
920.5
881.5
902.4
928.3
920.9
6a
895.8
915.2
875.6
896.4
922.5
915.0
1651.3
1689.2
1737.3
1780.3
1754.9
1767.2
Excluding gold……………………..
1647.6
1685.1
1731.9
1775.2
1749.5
1761.9
8 Net exports of goods………………….
-750.5
-768.7
-855.9
-877.9
-826.5
-846.2
8a
-751.7
-769.9
-856.3
-878.8
-827.0
-846.9
229.7
231.0
231.8
234.5
236.2
235.3
2
4
7
Multifamily…………………………..
Excluding gold………………………
Imports of goods:
U.S. imports of goods,
international-transactionsaccounts basis...............…..…....
7a
Excluding gold……………………..
Government:
State and local:
Structures:
9
Value of new construction put
in place……………………………..
____________
*Assumption.
@FedFRASER