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Technical Note
Gross Domestic Product
Fourth Quarter of 2006 (Final)
March 29, 2007
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 2.5 percent (annual rate), which was 0.3
percentage point more than that in the preliminary estimate. The upward revision to real
GDP primarily reflected an upward revision to private inventory investment that was
partly offset by a downward revision to equipment and software investment:
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The upward revision to inventory investment was mostly accounted for by retail
motor vehicle inventories and reflected a revised BLS producer price index for
light trucks for October.
The largest contributor to the downward revision to equipment and software
investment was a revision to software, which reflected newly available data from
the Census quarterly services survey.
The price index for gross domestic purchases increased 0.2 percent in the fourth
quarter, the same as in the preliminary estimate.
Corporate Profits
Profits from current production decreased $4.9 billion, or 0.3 percent (quarterly rate), in
the fourth quarter, compared with an increase of $61.5 billion, or 3.9 percent, in the third.
In the fourth quarter, real gross value added of nonfinancial corporate business
increased, unit labor and nonlabor costs increased, and profits per unit of real value
added decreased. Profits for 2006 were $1,615.7 billion, an increase of 21.4 percent
from 2005.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606