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Technical Note
Gross Domestic Product
Second Quarter of 2008 (Final)
September 26, 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 second 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 Real GDP
Real GDP growth in the second quarter (that is, from the first quarter to the second) was
2.8 percent (annual rate), which was 0.5 percentage point less than the preliminary
estimate. Downward revisions to consumer spending, to business investment in
equipment and software, and to exports were partly offset by an upward revision to
business investment in nonresidential structures:
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The downward revision to consumer spending was mostly to services—
specifically, electricity services—reflecting the incorporation of newly available
Energy Information Administration electricity usage and unit value data for April
and May.
The largest contributors to the downward revision to business investment in
equipment and software were prepackaged and custom software, reflecting the
incorporation of Census Bureau quarterly services survey data.
The downward revision to exports was mostly to exports of services and reflected
the incorporation of quarterly international transactions accounts data.
The largest contributor to the upward revision to nonresidential structures was
manufacturing structures, based on the incorporation of Census Bureau value of
construction spending data for May and June.
The price index for gross domestic purchases—the prices paid by U.S. residents for
goods and services, wherever produced—increased 4.2 percent in the second quarter,
the same as in the preliminary estimate. The price index for GDP, which includes
exports and excludes imports, increased 1.1 percent in the second quarter, a downward
revision of 0.1 percentage point. The difference in these two measures primarily
reflected import prices, which increased 28.8 percent in the second quarter, with
petroleum prices accounting for much of the increase. For more information, see the
FAQ, “Why are some of the GDP statistics telling such a different story for the first half of
2008 than some other statistics such as employment and the CPI?”
Corporate Profits
Profits from current production decreased $60.2 billion, or 3.8 percent (quarterly rate), in
the second quarter, compared with a decrease of $37.8 billion in the preliminary
estimate. Domestic profits decreased $35.3 billion, and rest-of-the-world profits
decreased $25.0 billion in the second quarter. The revision to profits reflected new and
revised source data, which include preliminary tabulations of Census quarterly financial
reports, regulatory agency reports, and compilations of publicly available corporate
financial statements.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606
@FedFRASER