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 1.3 percent in the second quarter of 2011,
(that is, from the first quarter to the second quarter), according to the "advance" estimate released by the
Bureau of Economic Analysis. In the first quarter, real GDP increased 0.4 percent.
The Bureau emphasized that the second-quarter advance estimate released today is based on
source data that are incomplete or subject to further revision by the source agency (see the box on page
3). The "second" estimate for the second quarter, based on more complete data, will be released on
August 26, 2011.
The estimates released today reflect the annual revision of the national income and product
accounts (NIPAs). In addition to the regular revision of estimates for the most recent 3 years and the
first quarter of 2011, current-dollar GDP and some components are revised back to the first quarter of
2003. In cases for which the estimates for the reference year (2005) are revised, this results in revisions
to the levels of the related index numbers and chained-dollar estimates for the entire historical period;
revisions to percent changes before the first quarter of 2003 are small. Annual revisions, which are
usually released in July, incorporate source data that are more complete, more detailed, and otherwise
more reliable than those previously available. This release includes the revised quarterly estimates of
GDP, corporate profits, and personal income and provides an overview of the results of the revision.
The August 2011 Survey of Current Business will contain NIPA tables and an article describing
the revisions. The complete set of revised estimates will be available on BEAs Web site at
www.bea.gov.
________________
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 (2005)
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 increase in real GDP in the second quarter primarily reflected positive contributions from
exports, nonresidential fixed investment, private inventory investment, and federal government spending
that were partly offset by a negative contribution from state and local government spending. Imports,
which are a subtraction in the calculation of GDP, increased.
The acceleration in real GDP in the second quarter primarily reflected a deceleration in imports,
an upturn in federal government spending, and an acceleration in nonresidential fixed investment that
were partly offset by a sharp deceleration in personal consumption expenditures.
Final sales of computers added 0.15 percentage point to the second-quarter change in real GDP
after adding 0.08 percentage point to the first-quarter change. Motor vehicle output subtracted 0.12
percentage point from the second-quarter change in real GDP after adding 1.08 percentage points to the
first-quarter change.
The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 3.2 percent in the second quarter, compared with an increase of 4.0 percent in the first.
Excluding food and energy prices, the price index for gross domestic purchases increased 2.6 percent in
the second quarter, compared with an increase of 2.4 percent in the first.
Real personal consumption expenditures increased 0.1 percent in the second quarter, compared
with an increase of 2.1 percent in the first. Durable goods decreased 4.4 percent, in contrast to an
increase of 11.7 percent. Nondurable goods increased 0.1 percent, compared with an increase of 1.6
percent. Services increased 0.8 percent, the same increase as in the first.
Real nonresidential fixed investment increased 6.3 percent in the second quarter, compared with
an increase of 2.1 percent in the first. Nonresidential structures increased 8.1 percent, in contrast to a
decrease of 14.3 percent. Equipment and software increased 5.7 percent, compared with an increase of
8.7 percent. Real residential fixed investment increased 3.8 percent, in contrast to a decrease of 2.4
percent.
Real exports of goods and services increased 6.0 percent in the second quarter, compared with an
increase of 7.9 percent in the first. Real imports of goods and services increased 1.3 percent, compared
with an increase of 8.3 percent.
Real federal government consumption expenditures and gross investment increased 2.2 percent
in the second quarter, in contrast to a decrease of 9.4 percent in the first. National defense increased 7.3
percent, in contrast to a decrease of 12.6 percent. Nondefense decreased 7.3 percent, compared with a
decrease of 2.7 percent. Real state and local government consumption expenditures and gross
investment decreased 3.4 percent, the same decrease as in the first.
The change in real private inventories added 0.18 percentage point to the second-quarter change
in real GDP after adding 0.32 percentage point to the first-quarter change. Private businesses increased
inventories $49.6 billion in the second quarter, following increases of $49.1 billion in the first quarter
and $38.3 billion in the fourth.
Real final sales of domestic product -- GDP less change in private inventories -- increased 1.1
percent in the second quarter, after increasing less than 0.1 percent.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 0.7 percent in the second quarter, the same increase as in the first.
Disposition of personal income
Current-dollar personal income increased $132.5 billion (4.2 percent) in the second quarter,
compared with an increase of $251.9 billion (8.3 percent) in the first.
Personal current taxes increased $22.6 billion in the second quarter, compared with an increase
of $122.3 billion in the first.
Disposable personal income increased $109.9 billion (3.9 percent) in the second quarter,
compared with an increase of $129.6 billion (4.7 percent) in the first. Real disposable personal income
increased 0.7 percent, the same increase as in the first quarter.
Personal outlays increased $83.5 billion (3.1 percent) in the second quarter, compared with an
increase of $153.5 billion (5.8 percent) in the first. Personal saving -- disposable personal income less
personal outlays -- was $590.6 billion in the second quarter, compared with $564.3 billion in the first.
The personal saving rate -- saving as a percentage of disposable personal income -- was 5.1 percent in
the second quarter, compared with 4.9 percent in the first. For a comparison of personal saving in
BEAs national income and product accounts with personal saving in the Federal Reserve Boards flow
of funds accounts and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp.
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
3.7 percent, or $136.0 billion, in the second quarter to a level of $15,003.8 billion. In the first quarter,
current-dollar GDP increased 3.1 percent, or $112.8 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 estimate of GDP and related series is made available on the Web site;
click on Survey of Current Business, "GDP and the Economy."
___________________
Revision of the National Income and Product Accounts
The revised estimates reflect the results of the annual revision of the national income and product
accounts (NIPAs). In addition to the regular revision of estimates for the most recent 3 years and the
first quarter of 2011, this flexible annual revision results in revisions to current-dollar GDP and some
components back to the first quarter of 2003. The reference year remains 2005. In cases for which the
estimates for the reference year (2005) are revised, this results in revisions to the levels of the related
index numbers and chained-dollar estimates for the entire historical period; revisions to percent changes
before the first quarter of 2003 are small.
Annual revisions, usually made each July, incorporate newly available and more comprehensive
source data, as well as improved estimating methodologies. In this annual revision, the notable revisions
primarily reflect the incorporation of newly available and revised source data. For example, the revised
estimates of profits reflect newly available Internal Revenue Service tabulations of tax returns for
corporations for 2009 and revised tabulations for 2008.
With the release of the annual revision, statistics for selected NIPA tables will be available on
BEAs Web site (www.bea.gov). Shortly after the GDP release, BEA will post a table on its Web site
showing the major current-dollar revisions and their sources for each component of GDP, national
income, and personal income. The August 2011 Survey of Current Business will contain NIPA tables
and an article describing the revisions. That issue will also contain an analysis of the current quarterly
estimate of GDP and related series (GDP and the Economy).
Because of the additional data shown, tables 3, 11, and 12 of this release are each divided into
two separate tables -- 3A and 3B, 11A and 11B, and 12A and 12B. There are also a number of special
tables that compare the revised and previously published estimates for selected periods:
* Table 1A shows the percent change in real GDP and related measures; table 1B shows revisions
to current-dollar GDP, to national income, and to disposition of personal income; table 2A shows
contributions to the percent change in real GDP; and table 4A shows the percent change in the
chain-type price indexes for GDP and related measures.
* Tables 7A, 7B, and 7C show annual levels, percent changes, and revisions to percent changes for
current-dollar GDP, for real (chained-dollar) GDP, and for chain-type price indexes for GDP,
respectively.
* Table 12C shows revisions to corporate profits by industry.
This section of the release discusses the highlights of the revisions and describes their sources.
Summary of revisions
For this annual revision, the most notable revisions are generally limited to the period from 2008
to the first quarter of 2011. The revisions for earlier periods tend to be small.
* For 2007-2010, real GDP decreased at an average annual rate of 0.3 percent; in the previously
published estimates, real GDP had increased at an average annual rate of less than 0.1 percent.
From the fourth quarter of 2007 to the first quarter of 2011, real GDP decreased at an average
annual rate of 0.2 percent; in the previously published estimates, real GDP had increased at an
average annual rate of 0.2 percent.
* The percent change in real GDP was revised down 0.3 percentage point for 2008, was revised
down 0.9 percentage point for 2009, and was revised up 0.1 percentage point for 2010.
* The revisions to the annual estimates for 2008 and 2010 reflect partly offsetting revisions to the
quarters within the year. For example, for 2010, the annual rate of change in GDP was revised
up 0.2 percentage point for the first quarter and was revised up 2.1 percentage points for the
second quarter, while the growth rates for the third and fourth quarters were revised down 0.1
and 0.8 percentage point, respectively. The downward revision to the change in real GDP for
2009 reflects downward revisions to the first and fourth quarters.
* For the 13 quarters from the fourth quarter of 2007 to the first quarter of 2011, the average
revision (without regard to sign) was 0.9 percentage point. The revisions did not change the
direction of the change in real GDP (increase or decrease) for any of the quarters.
* For 2007-2010, the average annual rate of growth of real disposable personal income was revised
down 0.6 percentage point from 1.2 percent to 0.6 percent.
* From the fourth quarter of 2007 to the first quarter of 2011, the average annual rate of increase in
the price index for gross domestic purchases was revised up from 1.4 percent to 1.6 percent. The
average annual rate of increase in the price index for personal consumption expenditures (PCE)
was revised up from 1.6 percent to 1.7 percent, and the increase in the core PCE price index
(which excludes food and energy) was revised up from 1.5 percent to 1.6 percent.
* National income was revised up 0.4 percent for 2008, was revised down 0.6 percent for 2009,
and was revised up 0.1 percent for 2010.
* Corporate profits was revised down 1.1 percent for 2008, was revised up 8.3 percent for 2009,
and was revised up 10.8 percent for 2010.
Revisions to the 2008-2010 estimates
The percent change from the preceding year in real GDP was revised down from a decrease of
less than 0.1 percent to a decrease of 0.3 percent for 2008, was revised down from a decrease of 2.6
percent to a decrease of 3.5 percent for 2009, and was revised up from an increase of 2.9 to an increase
of 3.0 percent for 2010.
For 2008, the largest contributors to the downward revision to the change in real GDP were
downward revisions to PCE, to nonresidential fixed investment, and to state and local government
spending. For 2009, the largest contributors to the downward revision were downward revisions to
PCE, to inventory investment, and to nonresidential fixed investment, and an upward revision to
imports. For 2010, the largest contributors to the upward revision were upward revisions to inventory
investment and to PCE; these revisions were partly offset by downward revisions to nonresidential fixed
investment, to state and local government spending, to residential fixed investment, and to exports.
The percent change from fourth quarter to fourth quarter in real GDP was revised down from a
decrease of 2.8 percent to a decrease of 3.3 percent for 2008, was revised down from an increase of 0.2
percent to a decrease of 0.5 percent for 2009, and was revised up from an increase of 2.8 percent to an
increase of 3.1 percent for 2010.
For the period of contraction from the fourth quarter of 2007 to the second quarter of 2009, real
GDP decreased at an average annual rate of 3.5 percent; in the previously published estimates, it had
decreased 2.8 percent.
For the period of expansion from the second quarter of 2009 to the first quarter of 2011, real
GDP increased at an average annual rate of 2.6 percent; in the previously published estimates, it had
increased 2.8 percent.
The percent change from the preceding year in real gross domestic income (GDI) was revised up
from a decrease of 0.8 percent to a decrease of 0.4 percent for 2008, was revised down from a decrease
of 2.9 percent to a decrease of 4.0 percent for 2009, and was revised up from an increase of 3.1 percent
to an increase of 3.6 percent for 2010.
The percent change from the preceding year in the price index for gross domestic purchases was
unrevised at 3.2 percent for 2008, was revised up from a decrease of 0.2 percent to a decrease of 0.1
percent for 2009, and was revised up from an increase of 1.3 percent to an increase of 1.5 percent for
2010. For the quarters of 2008 to 2010, the percent change in the price index was revised down for one
quarter, was revised up for seven quarters, and was unrevised for four quarters; the largest upward
revision was 0.4 percentage point (for both the fourth quarter of 2008 and the second quarter of 2010).
Current-dollar GDP was revised down for all 3 years: $77.6 billion, or 0.5 percent, for 2008;
$180.0 billion, or 1.3 percent, for 2009; and $133.9 billion, or 0.9 percent, for 2010. The percent change
from the preceding year was revised down from an increase of 2.2 percent to an increase of 1.9 percent
for 2008; was revised down from a decrease of 1.7 percent to a decrease of 2.5 percent for 2009; and
was revised up from an increase of 3.8 percent to an increase of 4.2 percent for 2010. Current-dollar
gross national product (GNP) (GDP plus net receipts of income from the rest of the world) was revised
down for all 3 years: $82.9 billion, or 0.6 percent, for 2008; $174.1 billion, or 1.2 percent, for 2009; and
$132.8 billion, or 0.9 percent, for 2010. Net receipts of income was revised down $5.3 billion for 2008,
was revised up $6.1 billion for 2009, and was revised up $1.1 billion for 2010. The revisions to net
receipts of income -- which affect GNP, national income, corporate profits, net interest and
miscellaneous payments, and personal income receipts on assets -- resulted from the revisions to BEA's
international transactions accounts (ITAs) that were released in June. Although the revisions to the
ITAs extended back to 1999, the revisions prior to 2008 were not incorporated into the NIPAs except for
the estimates of petroleum imports, which were revised back to 2007. (An article describing the
revisions to the ITAs was published in the July 2011 issue of the Survey of Current Business.)
Current-dollar GDP was also revised down for all 4 years from 2004-2007: $14.5 billion for
2004, $15.4 billion for 2005, $21.7 billion for 2006, and $33.1 billion for 2007. For 2003, GDP was
revised up by less than $1 billion. For 2003-2007, the revisions to current-dollar GDP were mainly
accounted for by revisions to PCE.
National income was revised up $51.3 billion, or 0.4 percent, for 2008; was revised down $77.4
billion, or 0.6 percent, for 2009; and was revised up $18.5 billion, or 0.1 percent, for 2010. For 2008,
upward revisions to net interest, to supplements to wages and salaries, and to rental income of persons
were partly offset by downward revisions to corporate profits and to wages and salaries. For 2009,
downward revisions to net interest and to nonfarm proprietors income were partly offset by upward
revisions to corporate profits, to rental income of persons, and to farm proprietors income. For 2010,
upward revisions to corporate profits, to rental income of persons, and to wages and salaries were partly
offset by downward revisions to net interest, to nonfarm proprietors income, and to supplements to
wages and salaries.
Corporate profits from current production -- profits before tax with inventory valuation and
capital consumption adjustments -- was revised down $14.4 billion, or 1.1 percent, for 2008; was revised
up $104.0 billion, or 8.3 percent, for 2009; and was revised up $175.3 billion, or 10.8 percent, for 2010.
For 2008, downward revisions to profits of domestic financial corporations and to profits from
the rest of the world were partly offset by an upward revision to profits of domestic nonfinancial
corporations. For 2009, upward revisions to profits of domestic financial corporations and to profits
from the rest of the world were partly offset by a downward revision to profits of domestic nonfinancial
corporations. For 2010, upward revisions to profits of domestic financial and to profits of nonfinancial
corporations were partly offset by a small downward revision to profits from the rest of the world.
Profits before tax was revised up for all 3 years: $26.7 billion for 2008, $139.0 billion for 2009,
and $18.4 billion for 2010. 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 was revised down $40.8 billion for 2008, was revised down $23.7 billion for
2009, and was revised up $151.1 billion for 2010. The inventory valuation adjustment was revised
down 0.4 billion for 2008, was revised down $11.3 billion for 2009, and was revised up $5.8 billion for
2010.
Personal income was revised up $69.1 billion, or 0.6 percent, for 2008; was revised down $244.7
billion, or 2.0 percent, for 2009; and was revised down $167.5 billion, or 1.3 percent, for 2010. For
2008, upward revisions to personal interest income, to supplements to wages and salaries, and to rental
income of persons were partly offset by downward revisions to personal dividend income, to wages and
salaries, and to nonfarm proprietors income. For 2009, downward revisions to personal interest
income, to personal dividend income, and to nonfarm proprietors income were partly offset by upward
revisions to rental income of persons and to farm proprietors income. For 2010, downward revisions to
personal interest income, to nonfarm proprietors income, to supplements to wages and salaries, and to
personal current transfer receipts were partly offset by upward revisions to rental income of persons, to
wages and salaries, and to farm proprietors income.
Disposable personal income (DPI) (personal income less personal current taxes) was revised up
$71.6 billion, or 0.7 percent, for 2008; was revised down $246.1 billion, or 2.2 percent, for 2009; and
was revised down $195.0 billion, or 1.7 percent, for 2010. Personal current taxes was revised down $2.5
billion for 2008, was revised up $1.4 billion for 2009, and was revised up $27.6 billion for 2010. The
percent change from the preceding year in real DPI was revised up from 1.7 percent to 2.4 percent for
2008, was revised down from an increase of 0.6 percent to a decrease of 2.3 percent for 2009, and was
revised up from an increase of 1.4 percent to an increase of 1.8 percent for 2010.
Personal outlays -- PCE, personal interest payments, and personal current transfer payments --
was revised down for all 3 years: $72.8 billion for 2008, $143.3 billion for 2009, and $133.8 billion for
2010. For all 3 years, downward revisions to PCE accounted for most of the revisions to personal
outlays. The personal saving rate (personal saving as a percentage of DPI) was revised up from 4.1
percent to 5.4 percent for 2008, was revised down from 5.9 percent to 5.1 percent for 2009, and was
revised down from 5.7 percent to 5.3 percent for 2010.
PCE was revised down for all 4 years from 2004-2007: $14.5 billion for 2004, $15.5 billion for
2005, $21.7 billion for 2006, and $34.0 billion for 2007. The personal saving rate was revised up from
3.4 percent to 3.6 percent for 2004, was revised up from 1.4 percent to 1.5 percent for 2005, was revised
up from 2.4 percent to 2.6 percent for 2006, and was revised up from 2.1 percent to 2.4 percent for 2007.
(For 2003, PCE was revised up by less than $1 billion, and the personal saving rate was unrevised.)
The statistical discrepancy is current-dollar GDP less current-dollar gross domestic income
(GDI). It arises because most components of GDP and of GDI are estimated independently. GDP
measures final expenditures -- the sum of consumer spending, private investment, net exports, and
government spending. GDI measures the incomes earned in the production of GDP. In concept, GDP is
equal to GDI. In practice, they differ because they are estimated using different source data and
different methods.
As a result of the annual revision, the statistical discrepancy as a percentage of GDP was revised
down from 1.0 percent to less than 0.1 percent for 2008, was revised down from 1.3 percent to 0.6
percent for 2009, and was revised down from 1.1 percent to less than 0.1 percent for 2010. For 2008
and 2010, the revisions to the discrepancy reflected downward revisions to GDP and upward revisions to
GDI. For 2009, the revision to the discrepancy reflected a downward revision to GDP that was larger
than the downward revision to GDI.
New source data
In this annual revision, personal consumption expenditures (PCE) is revised back to 2003 to
incorporate source data from the 2007 Economic Census (specifically, final data on merchandise lines)
and data from the Census annual and monthly retail trade and food services surveys and from the Census
service annual survey that have been benchmarked to the economic census.
In addition, the annual revision incorporated data from the following major federal statistical
sources: Census Bureau annual survey of manufactures for 2008 (revised) and 2009 (preliminary);
Census Bureau annual surveys of merchant wholesale trade and of retail trade for 2008 (revised) and for
2009 (preliminary); Census Bureau revised monthly indicators of manufactures, of merchant wholesale
trade, and of retail trade for 2008-2010; Census Bureau annual surveys of services for 2008 (revised),
2009 (revised), and 2010 (preliminary), and of state and local government finances for fiscal years 2007
(revised), 2008 (revised), and 2009 (preliminary); Census Bureau monthly survey of construction
spending (value put in place) for 2008-2010 (revised); Census Bureau quarterly services survey for
2008-2010 (revised); Census Bureau current population survey/housing vacancy survey for 2010;
federal government budget data for fiscal years 2010 and 2011; Internal Revenue Service tabulations of
tax returns for corporations for 2008 (revised) and 2009 (preliminary) and for sole proprietorships and
partnerships for 2009; Bureau of Labor Statistics quarterly census of employment and wages for 2008-
2010 (revised); Department of Agriculture farm statistics for 2008-2010 (revised); and BEA's ITAs for
2008-2010 (revised).
Changes in methodology
The annual revision also incorporated improvements to estimating methodologies, including the
following:
* Personal consumption expenditures (PCE) are revised back to 2003 to incorporate source data
from the 2007 Economic Census (specifically, final data on merchandise lines) and data from the
Census Bureau annual and monthly retail trade and food services surveys and from the Census
Bureau service annual survey that have been benchmarked to the economic census. In addition,
for 2008 forward, improved price indexes are used for deflating PCE for property and casualty
insurance.
* Starting with the first quarter of 2011, the quarterly and monthly estimates of PCE for portfolio
management and investment advice services reflect the incorporation of newly available Census
Bureau quarterly services survey data on other financial investment activities.
* The estimates of petroleum imports are revised back to 2007 to incorporate improvements in the
seasonal adjustment methodology for real petroleum imports, which are now derived by directly
adjusting the petroleum imports quantity data; previously, BEA seasonally adjusted the
petroleum price index and calculated seasonally adjusted real petroleum imports by deflation.
* The estimates of private fixed investment, exports, and imports of communication equipment are
revised back to 2003 to incorporate quality-adjusted price indexes from the Federal Reserve
Board (FRB). (During the 2010 NIPA annual revision, the FRB price indexes were incorporated
only back to 2007.)
* The estimates of rental income of persons are revised back to 2008 to reflect an improved
methodology for calculating the effective rate of interest on mortgage debt outstanding, which is
used to derive the estimates of mortgage interest paid, the largest expense deducted in the
calculation of rental income. The new method is based on the incorporation of up-to-date
monthly mortgage servicing data on actual loans and their characteristics, and provides a more
accurate picture of loan performance in the mortgage market. This change in the methodology
for deriving mortgage interest paid is also reflected in the estimates of net interest and personal
interest income.
* In the personal income and outlays tables, the presentation of government social benefits is
modified to focus on the largest and most significant programs.
* * *
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 -- August 26, 2011, at 8:30 A.M. EDT for:
Gross Domestic Product: Second Quarter 2011 (Second Estimate)
Corporate Profits: Second Quarter 2011 (Preliminary Estimate)
