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 0.6 percent in the fourth quarter of 2007,
according to final estimates released by the Bureau of Economic Analysis.  In the third quarter, real
GDP increased 4.9 percent.

 	The GDP estimates released today are based on more complete source data than were available for
the preliminary estimates issued last month.  In the preliminary estimates, the increase in real GDP was
also 0.6 percent (see "Revisions" on page 3).

          The increase in real GDP in the fourth quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), exports, nonresidential structures, state and local government
spending, and equipment and software that were largely offset by negative contributions from private
inventory investment and residential fixed investment.  Imports, which are a subtraction in the
calculation of GDP, decreased.

          The deceleration in real GDP growth in the fourth quarter primarily reflected a downturn in
inventory investment and decelerations in exports, in federal government spending, and in PCE that
were partly offset by a downturn in imports.

	Final sales of computers contributed 0.16 percentage point to the fourth-quarter growth in real
GDP after contributing 0.28 percentage point to the third-quarter growth.  Motor vehicle output
subtracted 0.86 percentage point from the fourth-quarter growth in real GDP after contributing 0.36
percentage point to the third-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 along with the Technical Note and Highlights related to
this release.


	The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 3.7 percent in the fourth quarter, 0.2 percentage point less than the preliminary estimate; this
index increased 1.8 percent in the third quarter.  Excluding food and energy prices, the price index for
gross domestic purchases increased 2.3 percent in the fourth quarter, compared with an increase of 1.9
percent in the third.

	Real personal consumption expenditures increased 2.3 percent in the fourth quarter, compared
with an increase of 2.8 percent in the third.  Real nonresidential fixed investment increased 6.0 percent,
compared with an increase of 9.3 percent.  Nonresidential structures increased 12.4 percent, compared
with an increase of 16.4 percent.  Equipment and software increased 3.1 percent, compared with an
increase of 6.2 percent.  Real residential fixed investment decreased 25.2 percent, compared with a
decrease of 20.5 percent.

	Real exports of goods and services increased 6.5 percent in the fourth quarter, compared with an
increase of 19.1 percent in the third.  Real imports of goods and services decreased 1.4 percent, in
contrast to an increase of 4.4 percent.

	Real federal government consumption expenditures and gross investment increased 0.5 percent in
the fourth quarter, compared with an increase of 7.1 percent in the third.  National defense decreased 0.5
percent, in contrast to an increase of 10.1 percent.  Nondefense increased 2.8 percent, compared with an
increase of 1.1 percent.  Real state and local government consumption expenditures and gross
investment increased 2.8 percent, compared with an increase of 1.9 percent.

	The real change in private inventories subtracted 1.79 percentage points from the fourth-quarter
change in real GDP, after adding 0.89 percentage point to the third-quarter change.  Private businesses
decreased inventories $18.3 billion in the fourth quarter, following increases of $30.6 billion in the third
quarter and $5.8 billion in the second.

	Real final sales of domestic product -- GDP less change in private inventories -- increased 2.4
percent in the fourth quarter, compared with an increase of 4.0 percent in the third.


Gross domestic purchases

	Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- decreased 0.4 percent in the fourth quarter, in contrast to an increase of 3.3 percent in the
third.


Gross national product

	Real gross national product -- the goods and services produced by the labor and property supplied
by U.S. residents -- increased 1.9 percent in the fourth quarter, compared with an increase of 5.8 percent
in the third.  GNP includes, and GDP excludes, net receipts of income from the rest of the world, which
increased $37.6 billion in the fourth quarter after increasing $25.9 billion in the third; in the fourth
quarter, receipts decreased $12.9 billion, and payments decreased $50.5 billion.


Current-dollar GDP

	Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
3.0 percent, or $103.7 billion, in the fourth quarter to a level of $14,074.2 billion.  In the third quarter,
current-dollar GDP increased 6.0 percent, or $201.7 billion.


Revisions

	The final estimate of the fourth-quarter increase in real GDP is the same as the preliminary
estimate issued last month, primarily reflecting a downward revision to inventory investment and
smaller downward revisions to several other GDP components that were largely offset by upward
revisions to personal consumption expenditures and to exports.


                                                 Advance          Preliminary             Final
                                                     (Percent change from preceding quarter)

Real GDP...............................            0.6                 0.6                 0.6
Current-dollar GDP.....................            3.2                 3.3                 3.0
Gross domestic purchases price index...            3.8                 3.9                 3.7




                                           Corporate Profits

	Profits from current production (corporate profits with inventory valuation and capital
consumption adjustments) decreased $52.9 billion in the fourth quarter, compared with a decrease of
$20.5 billion in the third quarter.  The fourth-quarter profits estimates reflect large adjustments that
raised profits in the national income and product accounts (NIPAs) relative to profits as reported in
corporate financial source data in order to account for differences in the treatment of asset write-downs
and loan-loss provisions, which are not expensed in current-production profits in the NIPAs (see
Technical Note).

	Current-production cash flow (net cash flow with inventory valuation and capital consumption
adjustments) -- the internal funds available to corporations for investment -- decreased $55.7 billion in
the fourth quarter, compared with a decrease of $21.1 billion in the third.

	Taxes on corporate income decreased $15.0 billion in the fourth quarter, compared with a
decrease of $20.7 billion in the third.  Profits after tax with inventory valuation and capital consumption
adjustments decreased $37.9 billion in the fourth quarter, in contrast to an increase of $0.3 billion in the
third.  Dividends increased $21.7 billion, compared with an increase of $23.5 billion; current-production
undistributed profits decreased $59.5 billion, compared with a decrease of $23.3 billion.

	Domestic profits of financial corporations decreased $74.4 billion in the fourth quarter, compared
with a decrease of $32.5 billion in the third.  Domestic profits of nonfinancial corporations decreased
$34.3 billion in the fourth quarter, compared with a decrease of $14.4 billion in the third.  In the fourth
quarter, real gross value added of nonfinancial corporations increased, and profits per unit of real
product decreased.  The decrease in unit profits reflected increases in both the unit labor and nonlabor
costs corporations incurred that were partly offset by an increase in unit prices.

	The rest-of-the-world component of profits increased $55.8 billion in the fourth quarter, compared
with an increase of $26.4 billion in the third.  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 fourth-quarter increase was
accounted for by an increase in receipts and a decrease in payments.

	Profits before tax with inventory valuation adjustment is the best available measure of industry
profits because estimates of the capital consumption adjustment by industry do not exist.  This measure
reflects depreciation-accounting practices used for federal income tax returns.  According to this
measure, domestic profits of financial and nonfinancial corporations decreased in the fourth quarter.
The decrease in  nonfinancial corporations reflected decreases in wholesale trade, in manufacturing, and
in transportation and warehousing that were partly offset by increases in information and in utilities.
Within manufacturing, the decrease was more than accounted for by petroleum.

	Profits before tax increased $0.2 billion in the fourth quarter, in contrast to a decrease of $51.8
billion in the third.  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 $4.1 billion in the fourth quarter (from -$237.4 billion to -$241.5 billion),
compared with a decrease of $3.0 billion in the third.  The inventory valuation adjustment decreased
$49.1 billion (from -$20.3 billion to -$69.4 billion), in contrast to an increase of $34.4 billion.

         Effective with this release, chained-dollar gross value added of nonfinancial corporate business
was revised beginning with 2004.  The current-dollar gross value added is deflated by a revised chain-
type price index calculated using the gross value added chain-type index for nonfinancial industries from
the annual revision of the GDP-by-industry accounts that were released in January 2008.


Corporate profits in 2007

          Profits from current production increased 2.7 percent in 2007, compared with an increase of 13.2
percent in 2006.  Domestic profits decreased 3.0 percent, in contrast to an increase of 12.3 percent.  The
rest-of-the-world component of profits increased 31.2 percent, compared with an increase of 17.9
percent.

         Taxes on corporate income increased 2.8 percent in 2007, compared with an increase of 15.5
percent in 2006.  Profits after tax with inventory valuation and capital consumption adjustments
increased 2.6 percent, compared with an increase of 12.2 percent.  Dividends increased 13.8 percent,
compared with an increase of 16.2 percent; current-production undistributed profits decreased 16.8
percent, in contrast to an increase of 5.9 percent.

      According to the measure of profits before tax with inventory valuation adjustment, domestic profits
of financial and nonfinancial corporations decreased in 2007.  The decrease in nonfinancial corporations
reflected a decrease in "other" nonfinancial that was partly offset by increases in information, in
retail trade, in manufacturing, in utilities, in transportation and warehousing, and in wholesale trade.
Within manufacturing, increases in most industries shown were partly offset by a decrease in petroleum.



                                                 *          *          *



        BEA's major 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 -- April 30, 2008 at 8:30 A.M. EDT for:
                                 Gross Domestic Product:  First Quarter 2008 (Advance)