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Technical Note
Second Quarter 2007 GDP (Advance)
2004 through First Quarter 2007 (Revised)
July 27, 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 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").
Source Data for the Advance Estimate
The advance GDP estimate for the second quarter of 2007 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,
an increase in exports of goods, excluding gold, and
an increase in imports of goods, excluding gold.
Annual Revision
Today’s GDP news release presents results from the regular annual revision of the
national income and product accounts. This year’s revision covers the estimates for the
most recent three years—from 2004 to 2006—and the first quarter of 2007. The revision
incorporates source data that are more complete, more detailed, and otherwise more
reliable than those previously available. A detailed discussion of the results will be
published in the August issue of the Survey.
GDP growth rates were revised down for all three years. For 2003-2006, real GDP grew
at an average annual rate of 3.2 percent, compared with the previously published
estimate of 3.5 percent. The revision to GDP growth for 2003-2006 was based on the
following revisions to components:
•
Real personal consumption expenditures grew at an average annual rate of 3.3
percent, compared with the previously published estimate of 3.5 percent.
Spending for goods was revised down, reflecting data from the Census Bureau’s
Annual Retail Trade Survey for 2005.
•
Real nonresidential fixed investment increased at an average annual rate of 6.5
percent, compared with the previously published estimate of 6.7 percent. The
downward revisions were mainly to structures, reflecting revised Census Bureau
value-of-construction-put-in-place data.
•
Real residential fixed investment increased at an average annual rate of 3.8
percent, compared with the previously published estimate of 4.6 percent. The
downward revision was primarily to single-family structures, reflecting revised
Census Bureau value-of-construction-put-in-place data and a revised Census
Bureau deflator for single-family houses under construction.
•
Real inventory investment increased $26.0 billion, compared with the previously
published estimate of $28.9 billion.
•
Real exports increased at an average annual rate of 8.3 percent, the same as the
previously published estimate. Real imports increased at an average annual rate
of 7.7 percent, compared with the previously published estimate of 7.5 percent.
The revisions to exports and imports reflected the annual revision of BEA’s
international transactions accounts that was released in June.
•
Real government consumption expenditures and gross investment increased at
an average annual rate of 1.3 percent, compared with the previously published
estimate of 1.6 percent. The revisions were primarily to state and local spending
and reflected Census Bureau Government Finances data for FY 2004 and FY
2005.
From the cyclical trough of GDP in the third quarter of 2001 to the first quarter of 2007,
the revised estimates show that real GDP increased at an average annual rate of 2.7
percent; the previously published estimates showed an average increase of 2.9 percent.
The revisions to the quarterly growth rates of GDP were generally small.
For 2003-2006, the average annual rate of increase in the price index for gross domestic
purchases was revised up, from 3.2 percent to 3.3 percent.
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 SECOND QUARTER OF 2007
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 June 2007 are shown in the last column of the
table. For most series shown, the data for May 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.
2007
Jan.
Feb.
Mar.
Apr.
May
Jun.*
316.9
326.7
331.2
333.6
343.1
338.4
Equipment and software:
Manufacturers' shipments of
complete aircraft…………………..
54.7
34.8
37.0
39.8
39.1
38.4
Residential structures:
Value of new residential
construction put in place:
3
Single family………………………..
344.3
333.1
330.9
327.5
323.6
319.1
4
53.9
53.1
52.7
52.1
51.9
51.2
Change in private inventories:
5 Change in inventories for nondurable
manufacturing………………………..
-15.9
-0.3
8.5
13.1
19.8
6.5
5a Change in inventories for merchant
wholesale and retail industries other
than motor vehicles and equipment…
23.5
57.9
6.1
50.8
46.0
12.3
Net exports:
Exports of goods:
6 U.S. exports of goods,
international-transactionsaccounts basis……………………
1085.9
1062.8
1092.7
1091.2
1119.6
1124.9
6a
1078.6
1055.5
1075.6
1073.4
1105.7
1115.0
1861.4
1848.8
1941.6
1899.4
1947.6
1970.1
Excluding gold……………………..
1856.8
1845.1
1926.4
1886.7
1936.6
1963.8
8 Net exports of goods………………….
-775.5
-786.0
-848.9
-808.1
-828.0
-845.2
8a
-778.2
-789.6
-850.7
-813.3
-830.8
-848.9
255.9
253.8
258.4
260.5
265.8
263.1
Private fixed investment:
Nonresidential structures:
1 Value of new nonresidential
construction put in place………..
2
7
Multifamily…………………………..
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.
@FedFRASER