News Release
These data have been superseded. Please see our latest releases for current estimates and contact information.
Gross Domestic Product and Corporate Profits: Third Quarter 2007 "preliminary" estimates
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.9 percent in the third quarter of 2007, according to preliminary estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent. The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the increase in real GDP was 3.9 percent (see "Revisions" on page 3). The increase in real GDP in the third quarter primarily reflected positive contributions from exports, personal consumption expenditures (PCE), private inventory investment, equipment and software, federal government spending, nonresidential structures, and state and local government spending that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP growth in the third quarter primarily reflected accelerations in exports, in PCE, and in private inventory investment that were partly offset by an upturn in imports, a larger decrease in residential fixed investment, and a deceleration in nonresidential structures. Final sales of computers contributed 0.27 percentage point to the third-quarter growth in real GDP after contributing 0.21 percentage point to the second-quarter growth. Motor vehicle output contributed 0.43 percentage point to the third-quarter growth in real GDP after contributing 0.03 percentage point to the second-quarter growth. FOOTNOTE.--Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized. "Real" estimates are in chained (2000) dollars. Price indexes are chain-type measures. This news release is available on BEA's Web site at www.bea.gov/newsreleases/rels.htm. The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.6 percent in the third quarter, the same as in the advance estimate; this index increased 3.8 percent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent in the third quarter, compared with an increase of 1.5 percent in the second. Real personal consumption expenditures increased 2.7 percent in the third quarter, compared with an increase of 1.4 percent in the second. Real nonresidential fixed investment increased 9.4 percent, compared with an increase of 11.0 percent. Nonresidential structures increased 14.3 percent, compared with an increase of 26.2 percent. Equipment and software increased 7.2 percent, compared with an increase of 4.7 percent. Real residential fixed investment decreased 19.7 percent, compared with a decrease of 11.8 percent. Real exports of goods and services increased 18.9 percent in the third quarter, compared with an increase of 7.5 percent in the second. Real imports of goods and services increased 4.3 percent, in contrast to a decrease of 2.7 percent. Real federal government consumption expenditures and gross investment increased 7.0 percent in the third quarter, compared with an increase of 6.0 percent in the second. National defense increased 10.1 percent, compared with an increase of 8.5 percent. Nondefense increased 0.9 percent, the same increase as in the second. Real state and local government consumption expenditures and gross investment increased 2.1 percent, compared with an increase of 3.0 percent. The real change in private inventories added 0.98 percentage point to the third-quarter change in real GDP, after adding 0.22 percentage point to the second-quarter change. Private businesses increased inventories $32.9 billion in the third quarter, following an increase of $5.8 billion in the second quarter and an increase of $0.1 billion in the first. Real final sales of domestic product -- GDP less change in private inventories -- increased 3.9 percent in the third quarter, compared with an increase of 3.6 percent in the second. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 3.4 percent in the third quarter, compared with an increase of 2.4 percent in the second. Gross national product Real gross national product -- the goods and services produced by the labor and property supplied by U.S. residents -- increased 5.6 percent in the third quarter, compared with an increase of 4.0 percent in the second. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $20.6 billion in the third quarter after increasing $5.8 billion in the second; in the third quarter, receipts increased $29.1 billion, and payments increased $8.5 billion. Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 5.9 percent, or $198.5 billion, in the third quarter to a level of $13,967.3 billion. In the second quarter, current-dollar GDP increased 6.6 percent, or $216.9 billion. Revisions The preliminary estimate of the third-quarter increase in real GDP is 1.0 percentage point, or $28.6 billion, more than the advance estimate issued last month. The upward revision to the percentage change in real GDP primarily reflected upward revisions to private inventory investment and to exports and a downward revision to imports that were partly offset by a downward revision to personal consumption expenditures. Advance Preliminary (Percent change from preceding quarter) Real GDP............................... 3.9 4.9 Current-dollar GDP..................... 4.7 5.9 Gross domestic purchases price index... 1.6 1.6 Corporate Profits Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $19.3 billion in the third quarter, in contrast to an increase of $94.7 billion in the second quarter. Current-production cash flow (net cash flow with inventory valuation and capital consumption adjustments) -- the internal funds available to corporations for investment -- decreased $22.1 billion in the third quarter, in contrast to an increase of $37.4 billion in the second. Taxes on corporate income decreased $19.1 billion in the third quarter, in contrast to an increase of $37.6 billion in the second. Profits after tax with inventory valuation and capital consumption adjustments decreased $0.1 billion in the third quarter, in contrast to an increase of $57.0 billion in the second. Dividends increased $23.5 billion compared with an increase of $24.8 billion; current- production undistributed profits decreased $23.6 billion, in contrast to an increase of $32.2 billion. Domestic profits of financial corporations decreased $29.1 billion in the third quarter, in contrast to an increase of $52.7 billion in the second. Domestic profits of nonfinancial corporations decreased $12.1 billion in the third quarter, in contrast to an increase of $25.3 billion in the second. In the third quarter, real gross corporate value added increased, and profits per unit of real value added decreased, primarily reflecting a decrease in unit prices. The rest-of-the-world component of profits increased $21.9 billion in the third quarter, compared with an increase of $16.7 billion in the second. This measure is calculated as (1) receipts by U.S. residents of earnings from their foreign affiliates plus dividends received by U.S. residents from unaffiliated foreign corporations minus (2) payments by U.S. affiliates of earnings to their foreign parents plus dividends paid by U.S. corporations to unaffiliated foreign residents. The third-quarter increase was accounted for by a larger increase in receipts than in payments. Profits before tax decreased $52.0 billion in the third quarter, in contrast to an increase of $115.7 billion in the second. The before-tax measure of profits does not reflect, as does profits from current production, the capital consumption and inventory valuation adjustments. These adjustments convert depreciation of fixed assets and inventory withdrawals reported on a tax-return, historical-cost basis to the current-cost measures used in the national income and product accounts. The capital consumption adjustment decreased $2.4 billion in the third quarter (from -$234.4 billion to -$236.8 billion), compared with a decrease of $6.5 billion in the second. The inventory valuation adjustment increased $35.1 billion (from -$54.7 billion to -$19.6 billion), in contrast to a decrease of $14.5 billion. * * * BEA's national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. * * * Next release -- December 20, 2007 at 8:30 A.M. EST for: Gross Domestic Product: Third Quarter 2007 (Final) Corporate Profits: Third Quarter 2007 (Final) Release dates in 2008 Gross domestic product 2007: IV and 2007 annual 2008: I 2008: II 2008: III Advance...... January 30 April 30 July 31 October 30 Preliminary.. February 28 May 29 August 28 November 25 Final........ March 27 June 26 September 26 December 23 Corporate Profits Preliminary.. .... May 29 August 28 November 25 Final........ March 27 June 26 September 26 December 23