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WEDNESDAY August 30, 2006 GDP GROWTH REVISED UP IN SECOND QUARTER Corporate Profits Increase The economy grew at an annual rate of 2.9 percent in the second quarter, compared with 5.6 percent in the first quarter, according to the “preliminary” estimates released by the U.S. Bureau of Economic Analysis. The growth rate was revised up 0.4 percentage point from the “advance” estimates released in July. BEA also released its first estimate of second-quarter corporate profits, which increased 20.5 percent from the same quarter a year ago. Gross Domestic Product (GDP) As reported last month, the deceleration in second-quarter GDP growth primarily reflected a deceleration in consumer spending on durable goods, a downturn in investment in equipment and software, and a downturn in Federal government spending. The upward revision from the advance estimates reflected revisions to exports of goods, investment in nonresidential structures, and inventory investment. Quarter-to-Quarter Growth in Real GDP 8 Percent 6 4 2 0 III IV 2002 I II III 2003 IV I II III 2004 IV I II III 2005 IV I II 2006 Real GDP growth is measured at seasonally adjusted annual rates. Corporate Profits Quarterly corporate profits increased for the third consecutive quarter, resulting in year-over-year growth of 20.5 percent. The growth rate reflected a 27.8-percent rise in profits of financial corporations and a 15.6-percent increase in profits of nonfinancial corporations. Year-over-Year Growth in Corporate Profits 25 Percent 20 15 10 5 0 III IV 2002 I II III 2003 IV I II III 2004 IV I II 2005 III IV I II 2006 Corporate profits growth is measured as the percent change from the same quarter one year ago. BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and economic data for states, local areas, and industries—are available on the BEA Web site: www.bea.gov. E-mail alerts are also available. NOTE: The “final” estimate of GDP and corporate profits for the second quarter of 2006 will be released on September 28, 2006. Contact: Ralph Stewart 202–606–2649 Bureau of Economic Analysis, U.S. Department of Commerce
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