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THURSDAY, December 21, 2006 GDP GREW 2.0 PERCENT IN THE THIRD QUARTER “Final” Estimates Released The economy grew at an annual rate of 2.0 percent in the third quarter, 0.2 percentage point less than in the “preliminary” estimates, according to the Bureau of Economic Analysis. In the second quarter, real gross domestic product (GDP) increased 2.6 percent. Third-quarter corporate profits increased 31 percent from the same quarter a year ago. Gross Domestic Product The deceleration in third-quarter GDP growth reflected an acceleration in imports (a subtraction in the calculation of GDP), a larger decrease in residential investment, and decelerations in consumer spending for services, in inventory investment, and in state and local government spending. The downward revision to GDP growth primarily reflected a downward revision to consumer spending for services. Quarter-to-Quarter Growth in Real GDP 8 Percent 6 4 2 0 IV I 2002 II III 2003 IV I II III 2004 IV I II III 2005 IV I II III 2006 Real GDP growth is measured at seasonally adjusted annual rates. Corporate Profits The 31-percent increase over the last 4 quarters reflected sharply reduced profits in the third quarter of 2005. In that quarter, Hurricanes Katrina and Rita depressed profits. Year-over-Year Growth in Corporate Profits 30 25 Percent 20 15 10 5 0 IV 2002 I II III 2003 IV I II III 2004 IV I II III 2005 IV I II III 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 “advance” estimate of GDP for the fourth quarter of 2006 will be released on January 31, 2007. Contact: Ralph Stewart 202–606–2649 Bureau of Economic Analysis, U.S. Department of Commerce
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