News Release
These data have been superseded. Please see our latest releases for current estimates and contact information.
FOR WIRE TRANSMISSION: 8:30 A.M. EDT, THURSDAY, AUGUST 27, 1998
BEA 98-26
Gross Domestic Product, 2nd quarter 1998 (preliminary); Corporate Profits, 2nd quarter 1998 (preliminary)
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Full Release & Tables (Text)
Technical Notes These technical notes provide background information about the data sources and estimating methods used to produce the estimates presented in the GDP news release of August 27; these notes also provide some perspective on the estimates. Additional material will become available in the days and weeks ahead; much of it will be posted to BEA's web site <http://www.bea.gov>. In mid-September, the estimates will be published in BEA's journal, the Survey of Current Business, along with a more detailed analysis of the estimates ("The Business Situation"). GDP, GNP, and Corporate Profits Real GDP (revised): Real GDP is now estimated to have increased 1.6 percent in the second quarter of 1998, 0.2 percentage point more than the advance estimate of 1.4 percent. Real GDP increased 5.5 percent in the first quarter. As in the advance estimate, the preliminary estimate of the second-quarter increase in real GDP reflects increases in consumer spending and in business expenditures for equipment and an increase in imports. The sharp slowdown in GDP growth from the first quarter to the second primarily reflects a sharp downturn in inventory investment, a deceleration in expenditure for equipment, and a larger second-quarter decrease in exports. The price index for gross domestic purchases is estimated to have increased 0.4 percent in the second quarter, the same as in the advance estimate. The price index decreased 0.2 percent in the first quarter. Excluding food and energy prices, which are more volatile than many other prices, prices increased 0.6 percent in the second quarter after increasing 0.7 percent. Real GNP: Real GNP increased 1.6 percent in the second quarter, the same increase as in real GDP, GNP increased 5.8 percent in the first quarter. GNP equals GDP plus incomes, mainly on investments, earned abroad by U.S. residents less similar incomes earned in the United States by foreign residents. Corporate Profits: Profits from current production decreased 1.1 percent (at a quarterly rate) in the second quarter, after increasing 1.0 percent in the first. Compared with current-production profits in the second quarter of 1997, profits in the second quarter of 1998 increased 0.5 percent. The current-production measure differs profits as they are usually reported in corporate financial statements. First, the current-production measure excludes non-operating items, such as special charges and capital gains net of losses. Second, the current-production measure is based on replacement-cost estimates of inventory withdrawals and depreciation rather than on historical-cost values. Sources of Revision The 0.2-percentage point upward revision to second-quarter real GDP growth is smaller than the 0.5-percentage point average revision--without regard to sign--between the advance and preliminary estimates over the past 20 years. (See the summary of revisions to real GDP estimates below.) The less-than-average second-quarter revision primarily reflects a downward revision to imports and an upward revision to exports that were largely offset by a downward revision to nonfarm inventory investment. The revisions to imports and to exports mainly reflected the replacement of BEA assumptions for June with newly available Bureau of the Census data on international trade in goods; the revision to nonfarm inventories mainly reflected the replacement of BEA assumptions for June with newly available Bureau of the Census data on inventories. The attached table shows both the BEA assumptions used for the advance estimate and newly available and revised source data for selected key series. Summary of revisions to real GDP estimates, 1978-97 (percent changes at annual rate) ___________________________________________________________________________________________ Range Average _______________________________________ Quarterly estimates without Two-thirds Nine-tenths compared regard of of to sign revisions revisions ___________________________________________________________________________________________ Current-dollar GDP __________________________________________________________ Advance to preliminary....... 0.6 -0.5 to 0.8 -1.1 to 1.4 Advance to final................ .7 - .6 to 1.0 -1.0 to 1.6 Preliminary to final............ .3 - .3 to .4 - .6 to .7 Real GDP __________________________________________________________ Advance to preliminary........ 0.5 -0.5 to 0.7 -0.9 to 1.4 Advance to final................. .6 - .6 to .9 -1.0 to 1.3 Preliminary to final............. .3 - .4 to .4 - .5 to .7 ___________________________________________________________________________________________ Robert P. Parker Chief Statistician Bureau of Economic Analysis 202-606-9607 August 27, 1998 Attachment Table A.--SOURCE DATA FOR THE ADVANCE AND PRELIMINARY ESTIMATES OF GDP FOR THE SECOND QUARTER OF 1998 This table shows the actual data used for the preliminary estimate of GDP for the second quarter of 1998. For these key series, actual data for June were not available in time for inclusion in the advance GDP estimate released on July 31, 1998, and BEA made assumptions for these source data. The numbers in brackets show the June values that had been assumed for the advance estimate. For most series, the data incorporated for May and, in some cases, for April 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. 1998 Jan. Feb. Mar. Apr. May. Jun. Private fixed investment: Nonresidential structures: Buildings: 1 Value of new nonresidential construction put in place........ 167.6 167.0 165.4 169.4 164.8 168.4 {168.1} {165.3} {167.8} Producers' durable equipment: 2 Manufacturers' shipments of complete aircraft..................... 59.2 50.3 34.8 38.7 48.2 43.1 {43.8} {43.6} Residential structures: Value of new residential construction put in place: 3 1-unit structures...................... 172.1 175.2 178.8 182.3 181.3 184.2 {181.3} {180.5} {181.8} 4 2-or-more-unit structures.......... 25.1 25.4 24.8 24.8 23.2 22.9 {24.9} {23.2} {24.0} Change in business inventories, nonfarm: 5 Change in inventories for manufacturing and trade (except nonmerchant wholesalers) for industries other than motor vehicles and equipment in trade..... 98.3 86.1 47.5 36.6 23.9 45.7 {17.7} {54.3} Net exports: Exports of goods: 6 U.S. exports of goods, balance-of-payments basis........ 694.8 676.2 686.6 664.0 656.6 655.3 {652.3} {655.7} 6a Excluding gold....................... 687.6 672.4 681.7 660.5 652.2 650.6 {647.9} {650.6} Imports of goods: 7 U.S. imports of goods, balance-of-payments basis....... 899.7 893.6 932.7 920.0 927.6 906.3 {925.9} {922.4} 7a Excluding gold....................... 892.0 889.2 924.8 914.8 922.0 900.7 {920.2} {917.1} 8 Net exports of goods.................... -204.9 -217.4 -246.1 -256.0 -271.0 -251.0 {-273.6} {-266.7} 8a Excluding gold....................... -204.4 -216.8 -243.1 -254.3 -269.8 -250.1 {-272.3} {-266.5} Government: State and local: Structures: 9 Value of new construction put in place......................... 132.7 132.2 130.9 131.9 126.2 129.4 {131.9} {126.9} {133.7}