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Gross Domestic Product, 3rd quarter 2013 (second estimate);
Corporate Profits, 3rd quarter 2013 (preliminary estimate)
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 3.6 percent in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.5 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 2.8 percent (see "Revisions" on page 3). With this second estimate for the third quarter, the increase in private inventory investment was larger than previously estimated. The increase in real GDP in the third quarter primarily reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), exports, nonresidential fixed investment, residential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP growth in the third quarter primarily reflected an acceleration in private inventory investment, a deceleration in imports, and an acceleration in state and local government spending that were partly offset by decelerations in exports, in PCE, and in nonresidential fixed investment. _________ 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 (2009) 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. For information on revisions, see "Revisions to GDP, GDI, and Their Major Components". _________ The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.8 percent in the third quarter, the same increase as in the advance estimate; this index increased 0.2 percent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.5 percent in the third quarter, compared with an increase of 0.8 percent in the second. Real personal consumption expenditures increased 1.4 percent in the third quarter, compared with an increase of 1.8 percent in the second. Durable goods increased 7.7 percent, compared with an increase of 6.2 percent. Nondurable goods increased 2.4 percent, compared with an increase of 1.6 percent. Services was unchanged in the third quarter; in the second quarter, services increased 1.2 percent. Real nonresidential fixed investment increased 3.5 percent in the third quarter, compared with an increase of 4.7 percent in the second. Nonresidential structures increased 13.8 percent, compared with an increase of 17.6 percent. Equipment was unchanged in the third quarter; in the second quarter, equipment increased 3.3 percent. Intellectual property products increased 1.7 percent, in contrast to a decrease of 1.5 percent. Real residential fixed investment increased 13.0 percent, compared with an increase of 14.2 percent. Real exports of goods and services increased 3.7 percent in the third quarter, compared with an increase of 8.0 percent in the second. Real imports of goods and services increased 2.7 percent, compared with an increase of 6.9 percent. Real federal government consumption expenditures and gross investment decreased 1.4 percent in the third quarter, compared with a decrease of 1.6 percent in the second. National defense decreased 0.3 percent, compared with a decrease of 0.6 percent. Nondefense decreased 3.1 percent, the same decrease as in the second quarter. Real state and local government consumption expenditures and gross investment increased 1.7 percent, compared with an increase of 0.4 percent. The change in real private inventories added 1.68 percentage points to the third-quarter change in real GDP, after adding 0.41 percentage point to the second-quarter change. Private businesses increased inventories $116.5 billion in the third quarter, following increases of $56.6 billion in the second quarter and $42.2 billion in the first. Real final sales of domestic product -- GDP less change in private inventories -- increased 1.9 percent in the third quarter, compared with an increase of 2.1 percent in the second. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 3.4 percent in the third quarter, compared with an increase of 2.5 percent in the second. Gross national product Real gross national product -- the goods and services produced by the labor and property supplied by U.S. residents -- increased 3.9 percent in the third quarter, compared with an increase of 2.7 percent in the second. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $13.7 billion in the third quarter after increasing $7.7 billion in the second; in the third quarter, receipts increased $1.7 billion, and payments decreased $12.1billion. Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 5.6 percent, or $229.8 billion, in the third quarter to a level of $16,890.8 billion. In the second quarter, current-dollar GDP increased 3.1 percent, or $125.7 billion. Gross domestic income Real gross domestic income (GDI), which measures the output of the economy as the costs incurred and the incomes earned in the production of GDP, increased 1.4 percent in the third quarter, compared with an increase of 3.2 percent (revised) in the second. For a given quarter, the estimates of GDP and GDI may differ for a variety of reasons, including the incorporation of largely independent source data. However, over longer time spans, the estimates of GDP and GDI tend to follow similar patterns of change. Revisions The upward revision to the percent change in real GDP primarily reflected upward revisions to private inventory investment and to nonresidential fixed investment that were partly offset by an upward revision to imports and a downward revision to exports. Advance Estimate Second Estimate (Percent change from preceding quarter) Real GDP................................................ 2.8 3.6 Current-dollar GDP...................................... 4.8 5.6 Gross domestic purchases price index.................... 1.8 1.8 Corporate Profits Profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) increased $38.3 billion in the third quarter, compared with an increase of $66.8 billion in the second. Taxes on corporate income decreased $4.8 billion, in contrast to an increase of $10.0 billion. Profits after tax with IVA and CCAdj increased $43.0 billion, compared with an increase of $56.9 billion. Dividends decreased $179.7 billion in the third quarter, in contrast to an increase of $273.5 billion in the second. The large third-quarter decrease primarily reflected dividends paid by Fannie Mae to the federal government in the second quarter. Undistributed profits increased $222.8 billion, in contrast to a decrease of $216.6 billion. Net cash flow with IVA -- the internal funds available to corporations for investment -- increased $234.5 billion, in contrast to a decrease of $205.3 billion. _________ BOX. Profits from current production reflect the depreciation of fixed assets valued at current cost using consistent depreciation profiles. These profiles are based on used-asset prices and do not depend on the depreciation-accounting practices used for federal income tax returns. The IVA and CCAdj are adjustments that convert inventory withdrawals and depreciation of fixed assets reported on a tax-return, historical-cost basis to the current-cost economic measures used in the national income and product accounts. _________ Corporate profits by industry Domestic profits of financial corporations increased $8.6 billion in the third quarter, compared to an increase of $24.5 billion in the second. Domestic profits of nonfinancial corporations increased $13.0 billion, compared to an increase of $37.8 billion. The rest-of-the-world component of profits increased $16.7 billion in the third quarter, compared with an increase of $4.6 billion in the second. This measure is calculated as the difference between receipts from rest of the world and payments to rest of the world. Gross value added of nonfinancial domestic corporate business In the third quarter, real gross value added of nonfinancial corporations increased, and profits per unit of real value added increased. The increase in unit profits reflected an increase in unit prices that was partly offset by increases in both unit labor costs and nonlabor costs incurred by corporations. * * * 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 -- December 20, 2013, at 8:30 A.M. EST for: Gross Domestic Product: Third Quarter 2013 (Third Estimate) Corporate Profits: Third Quarter (Revised Estimate) * * *