Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- decreased at an annual rate of 6.2 percent in the fourth quarter of 2008,
(that is, from the third quarter to the fourth quarter), according to preliminary estimates released by the
Bureau of Economic Analysis. In the third quarter, real GDP decreased 0.5 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 decrease in real GDP was 3.8
percent (see "Revisions" on page 3).
The decrease in real GDP in the fourth quarter primarily reflected negative contributions from
exports, personal consumption expenditures, equipment and software, and residential fixed investment
that were partly offset by a positive contribution from federal government spending. Imports, which are
a subtraction in the calculation of GDP, decreased.
Most of the major components contributed to the much larger decrease in real GDP in the fourth
quarter than in the third. The largest contributors were a downturn in exports and a much larger
decrease in equipment and software. The most notable offset was a much larger decrease in imports.
Final sales of computers subtracted 0.01 percentage point from the fourth-quarter change in real
GDP, the same contribution as in the third quarter. Motor vehicle output subtracted 2.04 percentage
points from the fourth-quarter change in real GDP after adding 0.16 percentage point to the third-quarter
change.
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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 BEAs 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,
decreased 4.1 percent in the fourth quarter, 0.5 percentage point less of a decrease than in the advance
estimate; this index increased 4.5 percent in the third quarter. Excluding food and energy prices, the
price index for gross domestic purchases increased 1.1 percent in the fourth quarter, compared with an
increase of 2.8 percent in the third.
Real personal consumption expenditures decreased 4.3 percent in the fourth quarter, compared
with a decrease of 3.8 percent in the third. Real nonresidential fixed investment decreased 21.1 percent,
compared with a decrease of 1.7 percent. Nonresidential structures decreased 5.9 percent, in contrast to
an increase of 9.7 percent. Equipment and software decreased 28.8 percent, compared with a decrease
of 7.5 percent. Real residential fixed investment decreased 22.2 percent, compared with a decrease of
16.0 percent.
Real exports of goods and services decreased 23.6 percent in the fourth quarter, in contrast to an
increase of 3.0 percent in the third. Real imports of goods and services decreased 16.0 percent,
compared with a decrease of 3.5 percent.
Real federal government consumption expenditures and gross investment increased 6.7 percent in
the fourth quarter, compared with an increase of 13.8 percent in the third. National defense increased
3.1 percent, compared with an increase of 18.0 percent. Nondefense increased 15.1 percent, compared
with an increase of 5.1 percent. Real state and local government consumption expenditures and gross
investment decreased 1.4 percent, in contrast to an increase of 1.3 percent.
The real change in private inventories added 0.16 percentage point to the fourth-quarter change in
real GDP, after adding 0.84 percentage point to the third-quarter change. Private businesses decreased
inventories $19.9 billion in the fourth quarter, following a decrease of $29.6 billion in the third quarter
and a decrease of $50.6 billion in the second.
Real final sales of domestic product -- GDP less change in private inventories -- decreased 6.4
percent in the fourth quarter, compared with a decrease of 1.3 percent in the third.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- decreased 5.6 percent in the fourth quarter, compared with a decrease of 1.5 percent in the
third.
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- decreased
5.8 percent, or $212.5 billion, in the fourth quarter to a level of $14,200.3 billion. In the third quarter,
current-dollar GDP increased 3.4 percent, or $118.3 billion.
Revisions
The preliminary estimate of the fourth-quarter change in real GDP is 2.4 percentage points, or
$74.4 billion, lower than the advance estimate issued last month. The downward revision to the percent
change in real GDP was widespread; the largest contributors were downward revisions to private
inventory investment, to exports, and to personal consumption expenditures for nondurable goods.
Advance Preliminary
(Percent change from preceding quarter)
Real GDP........................................ -3.8 -6.2
Current-dollar GDP.............................. -4.1 -5.8
Gross domestic purchases price index............ -4.6 -4.1
2008 GDP
Real GDP increased 1.1 percent in 2008 (that is, from the 2007 annual level to the 2008 annual
level), compared with an increase of 2.0 percent in 2007.
The major contributors to the increase in real GDP in 2008 were exports, personal consumption
expenditures (PCE) for services, federal government spending, nonresidential structures, and state and
local government spending. These were partly offset by negative contributions from residential fixed
investment, PCE for goods, private inventory investment, and equipment and software. Imports, which
are a subtraction in the calculation of GDP, decreased.
The slowdown in real GDP in 2008 primarily reflected a sharp deceleration in PCE, a downturn in
equipment and software, and decelerations in exports and in state and local government spending that
were partly offset by a sharp downturn in imports, an acceleration in federal government spending, and a
smaller decrease in private inventory investment.
The price index for gross domestic purchases increased 3.2 percent in 2008, compared with an
increase of 2.8 percent in 2007.
Current-dollar GDP increased 3.3 percent, or $457.0 billion, in 2008. Current-dollar GDP
increased 4.8 percent, or $629.2 billion, in 2007.
During 2008 (that is, measured from the fourth quarter of 2007 to the fourth quarter 2008), real
GDP decreased 0.8 percent. Real GDP increased 2.3 percent during 2007. The price index for gross
domestic purchases increased 2.0 percent during 2008, compared with an increase of 3.3 percent during
2007.
* * *
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 -- March 26, 2009, at 8:30 A.M. EDT for:
Gross Domestic Product: Fourth Quarter 2008 (Final)
Corporate Profits: Fourth Quarter 2008
