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Technical Note
Gross Domestic Product
Fourth Quarter of 2007 (Advance)
January 30, 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 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").
GDP Deceleration
Real GDP increased 0.6 percent (annual rate) in the fourth quarter, compared
with an increase of 4.9 percent in the third quarter. The deceleration in real GDP
growth reflected the following factors:
•
•
•
Inventory investment turned down, subtracting 1.25 percentage points
from GDP growth in the fourth quarter, after adding 0.89 percentage point
in the third. The downturn was mostly in motor vehicle inventories.
The contribution of net exports to GDP growth was smaller in the fourth
quarter (0.41 percentage point) than in the third (1.38 percentage points).
The effects of a deceleration in exports were partly offset by a
deceleration in imports.
Consumer spending slowed, contributing 1.37 percentage points to fourth
quarter growth after contributing 2.01 percentage points in the third.
Housing investment continued to be a drag, subtracting 1.18 percentage points
from GDP growth in the fourth quarter after subtracting 1.08 percentage points in
the third.
Source Data for the Advance Estimate
The advance GDP estimate for the fourth quarter of 2007 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,
an increase in exports of goods, excluding gold, and
a small decrease in imports of goods, excluding gold.
Prices
The price index for gross domestic purchases increased 3.8 percent in the fourth
quarter, compared with increases of 1.8 percent in the third quarter and 3.8
percent in both the first and second quarters. This pattern of price change
largely reflected movements in energy prices. Excluding food and energy prices,
the price index for gross domestic purchases increased 2.5 percent in the fourth
quarter, after increasing 1.9 percent in the third.
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 2007
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 2007 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.
2007
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.*
346.4
355.8
365.1
369.5
375.8
378.6
Equipment and software:
Manufacturers' shipments of
complete aircraft…………………..
42.4
50.2
42.0
49.1
47.4
39.6
Residential structures:
Value of new residential
construction put in place:
3
Single family………………………..
308.6
298.3
286.9
274.9
261.2
246.3
4
48.8
48.3
47.5
47.2
47.4
48.5
Change in private inventories:
5 Change in inventories for nondurable
manufacturing………………………..
3.9
-1.9
24.0
-4.7
15.2
24.0
5a Change in inventories for merchant
wholesale and retail industries other
than motor vehicles and equipment…
18.8
21.3
37.0
30.4
0.7
66.7
Net exports:
Exports of goods:
6 U.S. exports of goods,
international-transactionsaccounts basis……………………
1183.3
1187.7
1204.3
1210.2
1211.4
1225.7
6a
1171.4
1170.4
1190.7
1197.2
1200.9
1211.5
1996.5
1980.7
1994.5
2013.5
2083.9
2083.8
Excluding gold……………………..
1984.5
1971.5
1983.8
2005.2
2078.8
2075.3
8 Net exports of goods………………….
-813.2
-793.0
-790.2
-803.3
-872.5
-858.1
8a
-813.1
-801.1
-793.1
-808.0
-877.9
-863.8
267.4
269.2
275.3
277.2
284.1
283.5
Private fixed investment:
Nonresidential structures:
1 Value of new nonresidential
construction put in place………..
2
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.