The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Technical Note
Gross Domestic Product
Third Quarter of 2007 (Preliminary)
November 29, 2007
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 third 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
The real GDP growth rate in the third quarter was revised from 3.9 percent to 4.9
percent (annual rate).
•
•
Inventory investment was revised up, reflecting newly available Census Bureau
inventory data for September.
Exports were revised up and imports were revised down, reflecting newly
available Census goods data for September.
Corporate Profits
Profits from current production decreased $19.3 billion, or 1.2 percent (quarterly rate), in
the third quarter, after increasing $94.7 billion, or 6.1 percent, in the second.
During the third quarter, several large financial corporations announced bad-debt
expenses or asset write-downs related to sub-prime mortgages. Therefore, it may be
useful to note these expenses are treated differently in corporate financial accounting
than in estimating profits from current production in the national income and product
accounts (NIPAs). In the national accounts, bad-debt expenses and asset write-downs
are treated as capital losses that reduce the value of corporate assets on the balance
sheet rather than as current-period expenses that lower profits. As a result of this
treatment, profit estimates based on corporate financial accounting can differ markedly
from estimates of NIPA corporate profits, and tend to be lower than NIPA corporate
profits during periods when corporations report unusually large bad-debt expenses or
asset write-downs. Additional information is available in an FAQ (“How are bad-debt
expenses, asset write-downs, and loan-loss provisions treated in estimating NIPA
corporate profits?”) available on BEA’s Web site at www.bea.gov.
Revisions to Wages and Salaries and Disposable Personal Income
In addition to presenting preliminary estimates for the third quarter, today's news release
also presents revised estimates of second-quarter wages and salaries, personal taxes,
and contributions for government social insurance. Wage and salary disbursements are
now estimated to have increased $24.5 billion in the second quarter, a downward
revision of $44.8 billion. These estimates reflect newly available wage and salary
tabulations for the second quarter from the Bureau of Labor Statistics quarterly census
of employment and wages. These data are more comprehensive than the monthly
employment and earnings data that were used for the earlier estimates--they include the
pay of supervisors and irregular pay, such as bonuses and gains from the exercise of
stock options.
Real disposable personal income is now estimated to have decreased 0.8 percent in the
second quarter and to have increased 4.4 percent in the third. (By comparison, the
estimates that were available last month showed an increase of 0.6 percent in the
second quarter and an increase of 4.4 percent in the third.)
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606
Table A.--SOURCE DATA FOR THE ADVANCE AND PRELIMINARY
ESTIMATES OF GDP FOR THE THIRD QUARTER OF 2007
This table shows the actual data used for the preliminary estimate of GDP for the third quarter of
2007. For these key series, actual data for September were not available in time for inclusion in the
advance GDP estimate released on October 31, 2007, and BEA made assumptions for these source
data. The numbers in brackets show the September values that had been assumed for the advance
estimate. For most series, the data incorporated for August and, in some cases, for July, were
preliminary, and the numbers shown in brackets are the values used last month.
All series shown in the table are in billions of dollars, seasonally adjusted at annual rates, and are
published by the Bureau of the Census.
2007
Apr.
May
Jun.
Jul.
Aug.
Sep.
336.3
343.3
346.3
346.4
{345.5}
352.4
{353.4}
357.7
{349.5}
39.8
39.1
41.3
42.4
50.2
{51.7}
42.0
{34.7}
Residential structures:
Value of new residential
construction put in place:
3
Single family………………………..
326.9
320.3
315.0
308.6
{308.5}
299.1
{298.1}
288.5
{285.6}
4
51.1
50.3
49.7
48.8
{49.2}
48.6
{49.1}
48.2
{48.5}
13.1
22.0
14.1
3.9
-1.9
{-4.7}
24.9
{0.3}
50.8
44.9
21.5
18.8
21.3
{-6.8}
40.6
{16.2}
Net exports:
Exports of goods:
6 U.S. exports of goods,
international-transactionsaccounts basis…………………….
1091.2
1121.3
1139.5
1183.3
6a
Excluding gold………………………
1073.4
1107.4
1121.8
1171.4
Imports of goods:
U.S. imports of goods,
international-transactionsaccounts basis……………………..
1899.3
1943.1
1960.1
1996.5
1886.7
1932.0
1954.6
1984.5
8 Net exports of goods…………………..
-808.1
-821.8
-820.6
-813.2
8a
-813.3
-824.6
-832.8
-813.1
260.3
265.0
265.9
267.4
{269.4}
Private fixed investment:
Nonresidential structures:
1 Value of new nonresidential
construction put in place………..
2
Equipment and software:
Manufacturers' shipments of
complete aircraft……………………
Multifamily…………………………..
Change in private inventories:
5 Change in inventories for nondurable
manufacturing………………………..
5a Change in inventories for merchant
wholesale and retail industries other
than motor vehicles and equipment…
7
7a
Excluding gold……………………..
Excluding gold……………………..
Government:
State and local:
Structures:
9
Value of new construction put
in place……………………………..
1187.7 1202.6
{1185.7} {1183.1}
1170.4 1189.1
{1170.2} {1168.7}
1980.7 1991.6
{1986.4} {2006.2}
1971.5 1981.2
{1977.1} {1996.0}
-793.0
-789.0
{-799.0} {-823.1}
-801.1
-792.1
{-806.9} {-827.3}
268.1
{270.6}
275.3
{270.0}
@FedFRASER