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Technical Note
Gross Domestic Product
Fourth Quarter of 2005 (Final)
March 30, 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 ("GDP and the
Economy").
Sources of Revision to Components of Real GDP
Real GDP growth in the fourth quarter was 1.7 percent, which was 0.1 percentage point
more than that in the preliminary estimate. The small upward revision to real GDP
reflected an upward revision to inventories that was partly offset by a downward revision
to personal consumption expenditures (PCE) for services:
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Inventory investment was revised up, reflecting revised Census Bureau data for
December on manufacturing and trade inventories and newly available Energy
Information Administration (EIA) data for November and December on utility
inventories.
PCE services were revised down, reflecting newly available EIA data for
December on electricity sales and newly available Securities and Exchange
Commission data for the fourth quarter on brokerage commissions.
The price index for gross domestic purchases increased 3.7 percent in the fourth
quarter, 0.1 percentage point more than in the preliminary estimate. The price index for
PCE services was revised up, primarily reflecting revisions by the Bureau of Labor
Statistics to the October producer price indexes for hospitals.
Corporate Profits
Profits from current production increased $185.8 billion, or 14.4 percent, in the fourth
quarter, compared with a decrease of $54.4 billion, or 4.0 percent, in the third. Fourthquarter profits were reduced by $22.9 billion (at an annual rate) because of Hurricane
Wilma, reflecting the net benefits paid by domestic insurance companies and the
uninsured losses of corporate property. Third-quarter profits were reduced by $165.3
billion (at an annual rate) because of Hurricanes Katrina and Rita. For further
information on the treatment of the hurricanes in the national accounts, see the FAQs
available on BEA’s Web site, www.bea.gov.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606
@FedFRASER