News Release

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, Tuesday, February 28, 2017
BEA 17-07

Gross Domestic Product, 4th quarter and annual 2016 (second estimate)

Real gross domestic product (GDP) increased at an annual rate of 1.9 percent in the fourth quarter of
2016 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the
third quarter, real GDP increased 3.5 percent.

The GDP estimate released today is based on more complete source data than were available for the
"advance" estimate issued last month.  In the advance estimate, the increase in real GDP was also 1.9
percent. With the second estimate for the fourth quarter, the general picture of economic growth
remains the same; the increase in personal consumption expenditures was larger and increases in state
and local government spending and in nonresidential fixed investment were smaller than previously
estimated (see "Updates to GDP" on page 2).

Real GDP: Percent Change from Preceding Quarter

The increase in real GDP in the fourth quarter reflected positive contributions from personal
consumption expenditures (PCE), private inventory investment, residential fixed investment,
nonresidential fixed investment, and state and local government spending. These increases were partly
offset by negative contributions from exports and federal government spending. Imports, which are a
subtraction in the calculation of GDP, increased (table 2).

The deceleration in real GDP in the fourth quarter primarily reflected a downturn in exports, an
acceleration in imports, and a downturn in federal government spending that were partly offset by an
upturn in residential fixed investment, an acceleration in private inventory investment, and an upturn in
state and local government spending.

Current-dollar GDP increased 3.9 percent, or $180.2 billion, in the fourth quarter to a level of $18,855.5
billion. In the third quarter, current-dollar GDP increased 5.0 percent, or $225.2 billion (table 1 and table
3).

The price index for gross domestic purchases increased 1.9 percent in the fourth quarter, compared
with an increase of 1.5 percent in the third quarter (table 4). The PCE price index increased 1.9 percent,
compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index
increased 1.2 percent, compared with an increase of 1.7 percent (appendix table A).


Updates to GDP

The percent change in real GDP was the same as previously estimated. An upward revision to PCE was
offset by downward revisions to state and local government spending and to nonresidential fixed
investment. For more information, see the Technical Note. For information on updates to GDP, see the
“Additional Information” section that follows.


                                         Advance Estimate  Second Estimate

                                      (Percent change from preceding quarter)
Real GDP                                       1.9              1.9
Current-dollar GDP                             4.0              3.9
Gross domestic purchases price index           2.0              1.9
PCE price index                                2.2              1.9


2016 GDP

Real GDP increased 1.6 percent in 2016 (that is, from the 2015 annual level to the 2016 annual level),
compared with an increase of 2.6 percent in 2015 (table 1). Revisions to 2016 real GDP from the
advance estimate did not affect the 1.6 percent rate of increase.

The increase in real GDP in 2016 reflected positive contributions from PCE, residential fixed investment,
state and local government spending, exports, and federal government spending that were partly offset
by negative contributions from private inventory investment and nonresidential fixed investment.
Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The deceleration in real GDP from 2015 to 2016 reflected downturns in private inventory investment
and in nonresidential fixed investment and decelerations in PCE, in residential fixed investment and in
state and local government spending that were partly offset by a deceleration in imports and
accelerations in federal government spending and in exports.

Current-dollar GDP increased 2.9 percent, or $529.0 billion, in 2016 to a level of $18,565.6 billion,
compared with an increase of 3.7 percent, or $643.5 billion, in 2015 (table 1 and table 3).

The price index for gross domestic purchases increased 1.0 percent in 2016, compared with an increase
of 0.4 percent in 2015 (table 4).

During 2016 (that is, measured from the fourth quarter of 2015 to the fourth quarter of 2016), real GDP
increased 1.9 percent, the same rate as during 2015.  The price index for gross domestic purchases
increased 1.4 percent during 2016, compared with an increase of 0.4 percent during 2015 (table 7).



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                          Next release:  March 30, 2017 at 8:30 A.M. EDT
             Gross Domestic Product:  Fourth Quarter and Annual 2016 (Third Estimate)
                        Corporate Profits:  Fourth Quarter and Annual 2016

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