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Technical Note
Gross Domestic Product
Fourth Quarter of 2015 (Third Estimate)
March 25, 2016
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 of 2015 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 Survey of Current Business, BEA’s online monthly journal, will publish a
more detailed analysis of the estimates ("GDP and the Economy").
Sources of Revision to Real GDP
Real GDP increased 1.4 percent (annual rate) in the fourth quarter, an upward revision
of 0.4 percentage point from the second estimate. The revision to real GDP primarily
reflected upward revisions to consumer spending and to exports that were partly offset
by a downward revision to inventory investment.
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The upward revision to consumer spending was primarily to services (notably, to
recreation and transportation services) and mostly reflected newly available
Census Bureau quarterly services survey data for the fourth quarter.
The upward revision to exports reflected upward revisions to both services and
goods. The revision to services reflected upward revisions to “other” business
services and to travel, and the revision to goods reflected an upward revision to
“other” goods. The revisions were based on fourth-quarter data from the
international transactions accounts.
The downward revision to inventory investment reflected downward revisions to
manufacturing and retail trade industries, based on revised Census inventory
data for December.
The price index for personal consumption expenditures increased 0.3 percent in the
fourth quarter, a downward revision of 0.1 percentage point from the second estimate.
Gross Domestic Income and Corporate Profits
Real gross domestic income (GDI), which measures the value of the production of goods
and services in the United States as the costs incurred and the incomes earned in
production, increased 0.9 percent in the fourth quarter, following a 2.0 percent increase
in the third quarter.
Profits from current production decreased $159.6 billion, or 7.8 percent (quarterly rate),
in the fourth quarter, compared with a decrease of $33.0 billion, or 1.6 percent, in the
third. In the fourth quarter, profits of domestic financial corporations decreased $24.0
billion, profits of domestic nonfinancial corporations decreased $129.2 billion, and restof-the-world profits decreased $6.5 billion.
The estimate of nonfinancial corporate profits in the fourth quarter was reduced by a
$20.8 billion ($83.2 billion at an annual rate) settlement between a U.S. subsidiary of BP,
the federal government, and the five states that were most affected by the 2010 oil spill
in the Gulf of Mexico. The settlement was recorded in the national income and product
accounts (NIPAs) as a business current transfer payment to government; the estimate of
GDI was not affected by the settlement. The NIPAs record these types of settlements on
an accrual basis in the quarter when the settlement is finalized, which is not necessarily
the same quarter when the charges are recorded on a company’s own financial
statements. For more information, see the FAQ, “What caused the large increase to
government current transfer receipts from business in the fourth quarter of 2015?”
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606
@FedFRASER