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Technical Note
Gross Domestic Product
Third Quarter of 2011 (Third Estimate)
December 22, 2011
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
Real GDP increased 1.8 percent (annual rate) in the third quarter, which was 0.2
percentage point less than in last month’s estimate. The downward revision to
GDP primarily reflected a downward revision to personal consumption
expenditures (PCE) that was partly offset by an upward revision to inventory
investment.
•
The downward revision to PCE was more than accounted for by a
downward revision to PCE for services. Within PCE for services, the
largest contributor to the revision was health care—mainly, nonprofit
hospital services. The revision reflected newly available quarterly services
survey data for the third quarter from the Census Bureau.
•
The upward revision to inventory investment was primarily accounted for
by farm inventories and reflected a newly available 2011 Farm Income
Forecast from the U.S. Department of Agriculture.
The price index for gross domestic purchases—the prices paid by U.S. residents
for goods and services wherever produced—increased 2.0 percent in the third
quarter, 0.1 percentage point more than in last month’s estimate.
Corporate Profits and Gross Domestic Income
Profits from current production increased $32.5 billion, or 1.7 percent (quarterly
rate), in the third quarter. Domestic profits of financial corporations increased
$9.2 billion, domestic profits of nonfinancial corporations increased $17.9 billion,
and rest-of-the-world profits increased $5.4 billion.
Effective with today’s release, the estimates of real gross value added of
nonfinancial corporate business were revised beginning with 1929, to reflect the
use of a revised deflator for nonfinancial industries from the annual revision of
BEA’s industry accounts that was released earlier this month. Revisions to
percent changes before the first quarter of 2003 are small.
Real gross domestic income (GDI) increased 0.2 percent in the third quarter, 0.2
percentage point less than in last month’s estimate. GDI measures output as the
costs incurred and the incomes earned in the production of GDP. In theory, GDP
should equal GDI, but in practice, they can differ because they are estimated
using largely independent and less-than-perfect source data.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606