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 first quarter of 2008,
according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real
GDP also increased 0.6 percent.
The Bureau emphasized that the first-quarter "advance" estimates are based on source data that
are incomplete or subject to further revision by the source agency (see the box on page 3). The first-
quarter "preliminary" estimates, based on more comprehensive data, will be released on May 29, 2008.
The increase in real GDP in the first quarter primarily reflected positive contributions from
personal consumption expenditures (PCE) for services, private inventory investment, exports of goods
and services, and federal government spending that were partly offset by negative contributions from
residential fixed investment and PCE for durable goods. Imports, which are a subtraction in the
calculation of GDP, increased.
The increase in real GDP is the same as in the fourth quarter, reflecting an upturn in inventory
investment that was offset by an upturn in imports, and downturns in nonresidential structures, in PCE
for durable goods, and in PCE for nondurable goods.
Final sales of computers contributed 0.12 percentage point to the first-quarter growth in real GDP
after contributing 0.16 percentage point to the fourth-quarter growth. Motor vehicle output subtracted
0.30 percentage point from the first-quarter growth in real GDP after subtracting 0.86 percentage point
from the fourth-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 3.5 percent in the first quarter, compared with an increase of 3.7 percent in the fourth.
Excluding food and energy prices, the price index for gross domestic purchases increased 2.2 percent in
the first quarter, compared with an increase of 2.3 percent in the fourth. About 0.3 percentage point of
the first-quarter increase in the index was accounted for by the pay raise for federal civilian and military
personnel, which is treated as an increase in the prices of employee services purchased by the federal
government.
Real personal consumption expenditures increased 1.0 percent in the first quarter, compared with
an increase of 2.3 percent in the fourth. Durable goods decreased 6.1 percent, in contrast to an increase
of 2.0 percent. Nondurable goods decreased 1.3 percent, in contrast to an increase of 1.2 percent.
Services increased 3.4 percent, compared with an increase of 2.8 percent.
Real nonresidential fixed investment decreased 2.5 percent in the first quarter, in contrast to an
increase of 6.0 percent in the fourth. Nonresidential structures decreased 6.2 percent, in contrast to an
increase of 12.4 percent. Equipment and software decreased 0.7 percent, in contrast to an increase of 3.1
percent. Real residential fixed investment decreased 26.7 percent, compared with a decrease of 25.2
percent.
Real exports of goods and services increased 5.5 percent in the first quarter, compared with an
increase of 6.5 percent in the fourth. Real imports of goods and services increased 2.5 percent, in
contrast to a decrease of 1.4 percent.
Real federal government consumption expenditures and gross investment increased 4.6 percent in
the first quarter, compared with an increase of 0.5 percent in the fourth. National defense increased 6.0
percent, in contrast to a decrease of 0.5 percent. Nondefense increased 1.8 percent, compared with an
increase of 2.8 percent. Real state and local government consumption expenditures and gross
investment increased 0.5 percent, compared with an increase of 2.8 percent.
The real change in private inventories added 0.81 percentage point to the first-quarter change in
real GDP after subtracting 1.79 percentage points from the fourth-quarter change. Private businesses
increased inventories $1.8 billion in the first quarter, following a decrease of $18.3 billion in the fourth
and an increase of $30.6 billion in the third.
Real final sales of domestic product -- GDP less change in private inventories -- decreased 0.2
percent in the first quarter, in contrast to an increase of 2.4 percent in the fourth.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 0.4 percent in the first quarter, in contrast to a decrease of 0.4 percent in the
fourth.
Disposition of personal income
Current-dollar personal income increased $129.6 billion (4.4 percent) in the first quarter,
compared with an increase of $121.6 billion (4.2 percent) in the fourth.
Personal current taxes increased $2.3 billion in the first quarter, compared with an increase of
$18.2 billion in the fourth.
Disposable personal income increased $127.3 billion (5.0 percent) in the first quarter, compared
with an increase of $103.4 billion (4.1 percent) in the fourth. Real disposable personal income increased
1.4 percent, compared with an increase of 0.1 percent.
Personal outlays increased $106.8 billion (4.2 percent) in the first quarter, compared with an
increase of $148.0 billion (5.9 percent) in the fourth. Personal saving -- disposable personal income less
personal outlays -- was $20.2 billion in the first quarter, in contrast to a negative $0.3 billion in the
fourth. The personal saving rate -- saving as a percentage of disposable personal income -- was 0.2
percent in the first quarter; in the fourth quarter, the personal saving rate was 0.0 percent. Saving from
current income may be near zero or negative when outlays are financed by borrowing (including
borrowing financed through credit cards or home equity loans), by selling investments or other assets, or
by using savings from previous periods. For more information, see the FAQs on "Personal Saving" on
BEA's Web site. For a comparison of personal saving in BEA's national income and product accounts
with personal saving in the Federal Reserve Board's flow of funds accounts and data on changes in net
worth (which helps finance negative saving), go to /bea/dn/nipaweb/Nipa-Frb.asp.
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
3.2 percent, or $111.0 billion, in the first quarter to a level of $14,185.2 billion. In the fourth quarter,
current-dollar GDP increased 3.0 percent, or $103.7 billion.
BOX
Information on the assumptions used for unavailable source data is provided in a technical note
that is posted with the news release on BEA's Web site. Within a few days after the release, a detailed
"Key Source Data and Assumptions" file is posted on the Web site. In the middle of each month, an
analysis of the current quarterly estimates of GDP and related series is made available on the Web site;
click on Survey of Current Business, "GDP and the Economy."
* * *
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 -- May 29, 2008, at 8:30 A.M. EDT for:
Gross Domestic Product: First Quarter 2008 (Preliminary)
Corporate Profits: First Quarter 2008
Comparisons of Revisions to GDP
Quarterly estimates of GDP are released on the following schedule: "Advance" estimates, based on source data
that are incomplete or subject to further revision by the source agency, are released near the end of the first month
after the end of the quarter; as more detailed and more comprehensive data become available, "preliminary" and
"final" estimates are released near the end of the second and third months, respectively. The "latest" estimates reflect
the results of both annual and comprehensive revisions.
Annual revisions, which cover the quarters of the 3 most recent calendar years, are usually carried out each
summer and incorporate newly available major annual source data. Comprehensive (or benchmark) revisions
are carried out at about 5-year intervals and incorporate major periodic source data, as well as improvements in
concepts and methods that update the accounts to portray more accurately the evolving U.S. economy.
The table below shows comparisons of the revisions between quarterly percent changes of current-dollar and
real GDP for the different vintages of the estimates. From the advance estimate to the preliminary estimate (one
month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while from the advance
estimate to the final estimate (two months later), it is 0.6 percentage point. From the advance estimate to the latest
estimate, the average revision without regard to sign is 1.2 percentage points. The average revision (with regard to
sign) from the advance estimate to the latest estimate is 0.3 percentage point, which is larger than the average
revisions from the advance estimate to the preliminary or to the final estimates. The larger average revisions to the
latest estimate reflect the fact that comprehensive revisions include major improvements such as the introduction of
chain indexes and the capitalization of software. The current quarterly estimates correctly indicate the direction of change of
real GDP 98 percent of the time, correctly indicate whether it is accelerating or decelerating 74 percent of the time,
and correctly indicate whether real GDP growth is above, near, or below trend growth more than three-fifths of the
time.
Revisions Between Quarterly Percent Changes of GDP: Vintage Comparisons
[Annual rates]
Vintages Average Average without Standard deviation of
compared regard to sign revisions without regard
to sign
Current-dollar GDP
Advance to preliminary.......... 0.2 0.5 0.4
Advance to final................ .2 .7 .4
Preliminary to final............ .0 .3 .2
Advance to latest............... .4 1.1 .9
Real GDP
Advance to preliminary.......... 0.1 0.5 0.4
Advance to final................ .1 .6 .4
Preliminary to final............ .0 .3 .2
Advance to latest............... .3 1.2 1.0
NOTE.--These comparisons are based on the period from 1983 through 2004.
