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Technical Note
Gross Domestic Product
Third Quarter of 2010 (Advance)
October 29, 2010
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").
Real GDP
Real GDP increased 2.0 percent (annual rate) in the third quarter of 2010,
following an increase of 1.7 percent in the second quarter. The small
acceleration in real GDP in the third quarter reflected a deceleration in imports
and accelerations in inventory investment and in consumer spending that were
partly offset by a downturn in residential fixed investment and decelerations in
nonresidential fixed investment and in exports.
Source data for the advance estimate
The advance GDP estimate for the third quarter of 2010 is based on source data
that are incomplete and subject to revision. Three months of source data were
available for consumer spending on goods; shipments of capital equipment other
than aircraft; motor vehicle sales and inventories; manufacturing durables
inventories; federal government outlays; and consumer, producer, and
international prices. Only two months of data were available for most other key
data sources; BEA’s assumptions for the third month are shown in table A.
Among those assumptions are the following:
•
•
•
•
an increase in nondurable manufacturing inventories,
an increase in non-motor-vehicle merchant wholesale and retail
inventories,
a decrease in exports of goods, excluding gold, and
a decrease in imports of goods, excluding gold.
Prices
The price index for gross domestic purchases increased 0.8 percent in the third
quarter, following an increase of 0.1 percent in the second. Excluding food and
energy, the price index for gross domestic purchases increased 0.6 percent in
the third quarter, following an increase of 0.8 percent in the second.
American Recovery and Reinvestment Act of 2009
BEA's national accounts reflect the effects of the federal outlays and tax cuts
included in the American Recovery and Reinvestment Act of 2009. Most of the
effects of ARRA on GDP show up indirectly through the effects on GDP
components such as consumer spending, residential investment, and state and
local government spending. Thus, BEA’s accounts do not directly identify the
portion of GDP expenditures that is funded by ARRA. It is possible, however, to
identify the effects of ARRA on selected federal government transactions (see
table B).
During the third quarter of 2010, ARRA provisions lowered personal taxes about
$120 billion (annual rate) and raised government social benefits to persons about
$60 billion, thus raising disposable personal income (income after taxes) about
$180 billion. In addition, ARRA funded about $101 billion in current grants to
state and local governments (such as Medicaid and education grants), about $42
billion in capital transfers to state and local governments, to home buyers, and to
businesses, about $27 billion in federal consumption expenditures and gross
investment, and about $3 billion in subsidies for housing and energy. Further
information, including quarterly estimates of the effects of ARRA beginning with
2009, is available at http://www.bea.gov/recovery/index.htm.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606
Table A. KEY ASSUMPTIONS FOR THE ADVANCE ESTIMATE OF GDP
FOR THE THIRD QUARTER OF 2010
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 (other than aircraft), 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 series 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 September 2010 are shown in the last column of the
table. For most series shown, the data for August are preliminary and subject to further revision.
Occasionally, the data for earlier months are also subject to revision.
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.
2010
Apr.
May
Jun.
Jul.
Aug.
Sep.*
274.1
267.3
263.0
263.5
259.7
261.6
Equipment and software:
Manufacturers' shipments of
complete aircraft…………………..
33.2
28.4
32.1
47.9
40.0
29.5
Residential structures:
Value of new residential
construction put in place:
3
Single family………………………..
120.1
119.5
117.7
114.3
109.5
106.9
4
13.9
13.2
13.3
13.4
11.8
11.6
Private fixed investment:
Nonresidential structures:
1 Value of new nonresidential
construction put in place………..
2
Multifamily…………………………..
Change in private inventories:
NOTE: Historical (April-June) data may reflect concurrent seasonal factors.
5 Change in inventories for nondurable
manufacturing………………………..
3.0
-55.8
-33.0
38.4
-8.9
24.0
5a Change in inventories for merchant
wholesale and retail industries other
than motor vehicles and equipment…
37.6
36.9
4.2
66.1
51.6
92.2
Net exports:
Exports of goods:
6 U.S. exports of goods,
international-transactionsaccounts basis……………………
1249.4
1285.3
1258.7
1291.9
1292.4
1275.4
6a
1232.6
1271.6
1245.1
1274.7
1267.0
1257.4
1882.4
1940.9
2005.4
1952.9
2000.3
1981.9
Excluding gold……………………..
1869.6
1929.5
1994.4
1942.8
1990.8
1972.0
8 Net exports of goods………………….
-633.0
-655.7
-746.7
-661.0
-707.9
-706.6
8a
-637.0
-657.9
-749.3
-668.1
-723.8
-714.6
273.9
270.8
276.7
276.0
283.5
279.7
7
Excluding gold………………………
Imports of goods:
U.S. imports of goods,
international-transactionsaccounts basis...............…..…....
7a
Excluding gold……………………..
Government:
State and local:
Structures:
9
Value of new construction put
in place……………………………..
____________
*Assumption.
Table B. EFFECT OF THE ARRA ON SELECTED FEDERAL GOVERNMENT SECTOR TRANSACTIONS
(billions of dollars, seasonally adjusted at annual rates)
2010q2
Level
2010q3
ARRA
Level
-118.4
-118.4
…
-118.4
-120.1
-38.6
-81.5
1.7
867.5
-38.6
906.1
…
-120.1
-38.6
-81.5
1.7
3,701.2
188.4
3,751.0
183.9
1,038.5
17.9
1,061.5
20.9
2,311.4
1,732.6
1,716.5
66.2
0.1
137.9
94.9
1,417.4
168.5
2,342.8
1,749.5
1,732.9
67.5
0.1
131.1
94.9
1,439.3
160.4
578.8
525.0
271.9
72.1
181.0
53.8
104.7
104.7
40.9
40.2
23.6
0.0
593.4
539.3
284.4
73.5
181.4
54.1
100.6
100.6
42.7
28.5
29.4
0.0
56.4
2.0
56.9
2.6
-1,354.7
-306.7
…
-302.3
196.4
47.4
130.9
41.6
59.1
101.0
23.8
23.6
69.2
25.3
30.9
10.7
Gross investment
168.2
3.9
172.1
6.6
Addenda:
Total receipts
Total expenditures
2,366.1
3,936.3
-118.4
239.7
…
3,925.7
-118.4
232.0
-1,570.3
-358.0
…
-350.4
Current tax receipts
Personal current taxes
"Making Work Pay" tax credit
1
Other
Taxes on corporate income2
Current Expenditures
Consumption expenditures
Current transfer payments
Government social benefits
To persons
Supplemental Nutrition Assistance Program
3
One-time $250 payments
Unemployment programs
Refundable tax credits4
Other programs
Student financial assistance
5
Other programs
Other current transfer payments
Grants-in-aid to state and local governments
Medicaid
Education
6
Other
To the rest of the world (net)7
Subsidies8
Net Federal Government Saving
Capital transfer payments
Capital grants9
Capital transfers to business10
Net lending or net borrowing (-)
2,346.5
-118.4
1,269.3
856.7
-38.6
895.2
293.2
ARRA
…
Current Receipts
1
63.8
63.8
11.3
0.1
4.6
32.6
15.2
9.6
5.6
59.8
59.8
11.2
0.1
0.8
32.6
15.1
9.6
5.5
Includes an increase to the individual AMT exemption amount, and business tax incentives claimed by individuals.
2
Includes special allowances for certain property acquired during 2009 and other business tax incentives.
3
Payments to recipients of Social Security, Supplemental Security Income, veterans' benefits, and railroad retirement benefits.
4
Includes outlays associated with the Making Work Pay, American Opportunity, and other refundable tax credits as well as an expansion of the earned income and child tax
5
Includes funding for COBRA premium assistance payments and veterans' benefits, and payments to cover digital converter box redemptions.
6
Includes grants to fund programs related to national defense, public safety, economic affairs, housing and community services, income security, and unemployment.
7
Includes grants to fund "Making Work Pay" tax credits in the territories.
8
Includes funding to supplement Section 8 housing subsidies and to promote the use of efficient and renewable energy.
9
Includes grants for highway and public transit infrastructure construction and restoration.
10
Includes home buyer tax credits and grants for specified energy properties.
Further information, including estimates of the effects of ARRA for 2009, is available at http://www.bea.gov/recovery/index.htm
@FedFRASER