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Gross Domestic Product
Fourth Quarter of 2016 (Advance Estimate)
January 27, 2017
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 Survey of Current Business, BEA’s online monthly journal,
will publish a more detailed analysis of the estimates ("GDP and the Economy").
Real GDP
Real GDP increased 1.9 percent (annual rate) in the fourth quarter of 2016, following an increase of 3.5
percent in the third quarter of 2016. The deceleration in real GDP in the fourth quarter reflected a
downturn in exports, an acceleration in imports (which are a subtraction in the calculation of GDP), a
deceleration in consumer spending, and a downturn in federal government spending. These movements
were partly offset by an upturn in residential fixed investment, an acceleration in inventory investment,
and an upturn in state and local government spending.
The downturn in exports was mainly attributable to a downturn in exports of foods, feeds, and
beverages, reflecting a decrease in exports of soybeans in the fourth quarter. The decrease in the fourth
quarter reflects a return to recent historical levels after an unusually strong increase in the third quarter.
Source Data for the Advance Estimate
The “advance” GDP estimate for the fourth quarter of 2016 is based on source data that are incomplete
and subject to updates. Three months of source data were available for consumer spending on goods;
shipments of capital equipment; motor vehicle sales and inventories; durable goods manufacturing
inventories; wholesale and retail trade inventories; exports and imports of goods; federal government
outlays; and consumer, producer, and international prices. For major source data series for which only
two months of data are available, BEA’s key assumptions for the third month are shown in table A1.
On January 26, the Census Bureau released the "Advance Economic Indicators Report" that included
newly available wholesale and retail trade inventories as well as exports and imports of goods for the
month of December. Today’s advance GDP estimates reflect these advance inventories and foreign
trade statistics (table A2).
Prices
The price index for personal consumption expenditures (PCE) increased 2.2 percent in the fourth
quarter, following an increase of 1.5 percent in the third. Excluding food and energy prices, the PCE price
index increased 1.3 percent after increasing 1.7 percent.
Disposable Personal Income
Real disposable personal income increased 1.5 percent in the fourth quarter, following an increase of
2.6 percent in the third. The personal saving rate was 5.6 percent in the fourth quarter, compared with
5.8 percent in the third.
Looking Ahead: Advance Services Report
Beginning with the “second” estimate of GDP for the fourth quarter of 2016, BEA plans to incorporate
newly available Census Bureau data from the “Advance Services Report.” Statistics from this report will
reflect limited detail compared with the services data that are available as part of the Census Bureau’s
Quarterly Services Survey, which BEA currently incorporates into its “third” estimates of private fixed
investment in intellectual property products and consumer spending for services. Additional information
is available in the BEA FAQ, “How will BEA use the Census Bureau’s new Advance Services Report in its
estimates?”
David B. Wasshausen
Chief, National Income and Wealth Division
Bureau of Economic Analysis
(301) 278-9715
-2-
Table A1. KEY ASSUMPTIONS FOR THE ADVANCE
ESTIMATE OF GDP FOR THE FOURTH QUARTER OF 2016
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,
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 assumptions 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 2016 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. (State and local government structures are no
longer available in this table because of changes in BEA seasonal adjustment methodology.)
All series shown in the table are in billions of dollars, seasonally adjusted at annual rates, and are
published by the Census Bureau.
2016
Jul.
Aug.
Sep.
Oct.
Nov.
Dec.
Private fixed investment:
Nonresidential structures:
1 Value of new nonresidential
construction put in place…………..
428.3
432.2
432.6
426.2
429.9
428.0
Residential structures:
Value of new residential
construction put in place:
2
Single family…………………….......
238.6
237.0
236.7
243.3
247.6
249.4
59.7
61.1
61.5
63.6
61.9
62.3
-10.4
6.9
7.8
16.9
3
Multifamily…………………………....
Change in private inventories:
NOTE: Historical (Jul.–Oct.) data reflect concurrent seasonal factors.
4 Change in inventories for nondurable
manufacturing…………………………
01/27/2017 8:30 AM
-4.5
6.7
Table A2. ADVANCE ECONOMIC INDICATORS REPORT DATA FOR THE ADVANCE
ESTIMATE OF GDP FOR THE FOURTH QUARTER OF 2016
For the key data shown in this table, advance data for the third month of the quarter are available from the Census
Bureau's Advance Economic Indicators Report for inclusion in the advance GDP estimate. For series shown, the
data for November and December are preliminary and subject to further revision.
All series shown in the table are in billions of dollars and seasonally adjusted at annual rates.
Oct.
2016
Nov.
Dec.
Change in private inventories:
1 Merchant wholesalers inventories….….
2 Retail inventories………………………..
589.4
603.3
595.2
608.4
601.1
608.3
Net exports of goods:
3 U.S. exports of goods, Census basis…
4 U.S. imports of goods, Census basis…
122.9
184.6
121.8
187.2
125.5
190.5
01/27/2017 8:30 AM