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Gross Domestic Product
Second Quarter of 2016 (Advance Estimate)
July 29, 2016
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 Survey of Current Business, BEA’s online monthly
journal, will publish a more detailed analysis of the estimates ("GDP and the Economy").
Real GDP
Real GDP increased 1.2 percent (annual rate) in the second quarter of 2016, following an increase of 0.8
percent (revised) in the first quarter of 2016. The acceleration in real GDP in the second quarter
reflected an acceleration in consumer spending, an upturn in exports, and smaller decreases in
nonresidential fixed investment and in federal government spending that were partly offset by a larger
decrease in inventory investment and downturns in residential fixed investment and in state and local
government spending.
Source Data for the Advance Estimate
The advance GDP estimate for the second quarter of 2016 is based on source data that are incomplete
and subject to updating. Three months of source data were available for consumer spending on goods;
shipments of capital equipment; motor vehicle sales and inventories; durable goods manufacturing
inventories; wholesale and retail trade inventories; exports and imports of goods; federal government
outlays; and consumer, producer, and international prices. For major source data series for which only
two months of data are available, BEA’s key assumptions for the third month are shown in table A1.
Advance Economic Indicators Report
On July 28, the Census Bureau released for the first time economic indicator data for wholesale and
retail trade inventories as part of its "Advance Economic Indicators Report." Today’s advance GDP
estimates reflect these advance inventories statistics for June 2016 (table A2). Thus, for the first time,
BEA’s advance GDP estimates incorporate Census data on wholesale and retail trade inventories for all
three months of the quarter. (Previously, the advance GDP estimates were based on Census data for
two months and BEA assumptions for the third month.) We anticipate that the availability of these
earlier inventory data will improve the accuracy of BEA’s initial estimates of inventory investment.
Prices
The price index for personal consumption expenditures (PCE) increased 1.9 percent in the second
quarter, following an increase of 0.3 percent (revised) in the first quarter. Excluding food and energy
prices, the PCE price index increased 1.7 percent after increasing 2.1 percent (revised).
Disposable Personal Income
Real disposable personal income increased 1.2 percent in the second quarter, following an increase of
2.2 percent (revised) in the first. The personal saving rate was 5.5 percent in the second quarter,
compared with 6.1 percent (revised) in the first.
Annual Update
Today’s GDP news release presents results from the regular annual update of the national income and
product accounts. This year’s revision includes revised estimates for the period from the first quarter of
2013 through the first quarter of 2016. The update incorporates source data that are more complete
and reliable than those previously available. Shortly after the GDP release, BEA will post a table on its
Web site, www.bea.gov, showing the major source data for the revisions. A detailed discussion of the
results will be published in the August issue of the Survey of Current Business.
From the fourth quarter of 2012 to the first quarter of 2016, real GDP increased at an average annual
rate of 2.2 percent, the same as previously published. Over the same span, real GDI increased at an
average annual rate of 2.1 percent; in the previously published estimates, real GDI had increased at an
average annual rate of 2.2 percent.
Revisions to GDP and GDI for 2016QI
For the first quarter of 2016, real GDP is now estimated to have increased 0.8 percent; in the previously
published estimates, first-quarter GDP was estimated to have increased 1.1 percent. The 0.3
percentage-point downward revision to real GDP growth primarily reflected downward revisions to
residential fixed investment, to inventory investment, and to exports that were partly offset by upward
revisions to nonresidential fixed investment and to consumer spending. The revisions largely reflect
revised seasonal adjustments and the incorporation of revised Census construction spending data.
For the first quarter of 2016, real GDI is now estimated to have increased 0.9 percent, a downward
revision of 2.0 percentage points. The main source of revision was a downward revision to wages and
salaries for the first quarter, based on the incorporation of preliminary quarterly census of employment
and wages data from the Bureau of Labor Statistics.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(301) 278-9606
-2-
Table A1. KEY ASSUMPTIONS FOR THE ADVANCE
ESTIMATE OF GDP FOR THE SECOND QUARTER OF 2016
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,
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 assumptions 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 2016 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. (State and local government structures are no longer available
in this table because of changes in BEA seasonal adjustment methodology.)
All series shown in the table are in billions of dollars, seasonally adjusted at annual rates, and are
published by the Census Bureau.
2016
Jan.
Feb.
Mar.
Apr.
May
Jun.
Private fixed investment:
Nonresidential structures:
1 Value of new nonresidential
construction put in place…………..
399.7
402.4
410.6
410.1
407.4
408.8
Residential structures:
Value of new residential
construction put in place:
2
Single family…………………….......
248.1
248.9
246.8
242.3
239.2
242.3
58.3
58.3
61.5
60.3
61.4
62.2
2.9
4.1
5.2
19.3
3
Multifamily…………………………....
Change in private inventories:
NOTE: Historical (Jan.–Apr.) data reflect concurrent seasonal factors.
4 Change in inventories for nondurable
manufacturing…………………………
07/29/2016 8:30 AM
-11.4
-10.7
Table A2. ADVANCE ECONOMIC INDICATORS REPORT DATA FOR THE ADVANCE
ESTIMATE OF GDP FOR THE SECOND QUARTER OF 2016
For the key data shown in this table, advance data for the third month of the quarter are available from the Census
Bureau's Advance Economic Indicators Report for inclusion in the advance GDP estimate. For series shown, the
data for June are preliminary and subject to further revision.
All series shown in the table are in billions of dollars and seasonally adjusted at annual rates.
Apr.
Change in private inventories:
1 Merchant wholesalers………………….
2 Retail…………………..…………………
Net exports of goods:
3 U.S. exports of goods, Census basis…
4 U.S. imports of goods, Census basis…
7/29/2016 8:30 AM
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119.5
176.9
2016
May
Jun.
589.1
601.2
589.3
604.2
119.1
180.2
120.2
183.5