Technical Note

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                                  Technical Note
                              Gross Domestic Product
                          Third Quarter of 2006 (Advance)
                                  October 27, 2006


This technical note provides background information about the source data and 
estimating methods used to produce the estimates presented in the GDP news release. 
The complete set of estimates for the third quarter is available on BEA's Web site at 
www.bea.gov; a brief summary of "highlights" is also posted on the Web site.  In a few 
weeks, the estimates will be published in BEA's monthly journal, the Survey of Current 
Business, along with a more detailed analysis of the estimates ("GDP and the 
Economy").  

Source Data for the Advance Estimate
     
The advance GDP estimate for the third quarter of 2006 is based on source data that are 
incomplete and subject to revision.  Three months of source data were available for 
consumer spending on goods; shipments of capital equipment other than aircraft; motor 
vehicle sales and inventories; manufacturing durables inventories; federal government 
outlays; and consumer, producer, and international prices.  Only two months of data 
were available for most other key data sources; BEA?s assumptions for the third month 
are shown in table A.  Among those assumptions are the following:

    *   an increase in nondurable manufacturing inventory investment,
    *   an increase in non-motor-vehicle merchant retail and wholesale inventory
        investment,
    *   an increase in exports of goods, excluding gold, and
    *   a decrease in imports of goods, excluding gold.

Prices

The price index for gross domestic purchases increased 2.0 percent in the third quarter 
after increasing 4.0 percent in the second.  Excluding food and energy prices, the price 
index for gross domestic purchases increased 1.9 percent after increasing 2.9 percent.


Brent R. Moulton  
Associate Director for National Economic Accounts
Bureau of Economic Analysis  
(202) 606-9606
	
                    Table A. KEY ASSUMPTIONS FOR THE ADVANCE ESTIMATE OF GDP						
                                  FOR THE THIRD QUARTER OF 2006						

For many of the key series used to prepare the advance estimate of GDP, including retail sales,						
unit automobile and truck sales and inventories, manufacturers' shipments of nondefense						
capital goods (other than aircraft), manufacturers' inventories of durable goods, federal defense						
spending, and consumer, producer, and international price indexes, actual data are available for all 						
months of the quarter.						

For the key series shown in this table, actual data for the third month of the quarter usually are not						
available in time for inclusion in the advance GDP estimate.  BEA makes assumptions for the source						
data that are not yet available; assumptions for September 2006 are shown in the last column of the						
table.  For most series shown, the data for August are preliminary and subject to further revision.						
Occasionally, the data for earlier months are also subject to revision."						

All series shown in the table are in billions of dollars, seasonally adjusted at annual rates, and are						
published by the Bureau of the Census.						

                                                                             2006
                                                      Apr.      May      Jun.      Jul.    Aug.     Sep.*
						
Private fixed investment:						
   Nonresidential structures:						
1     Value of new nonresidential						
       construction put in place.........            290.7     292.0     297.8     301.7   312.0    309.9
						
   Equipment and software:						
2   Manufacturers' shipments of
      complete aircraft..................             27.0      34.0      37.7      30.6    34.8     34.7
						
   Residential structures:						
      Value of new residential						
        construction put in place:
3       Single family....................	     446.5     435.5     424.2	   411.5   400.3    394.5
						
4       Multifamily......................	      56.1	55.0	  54.7	    55.5    55.7     54.9
						
Change in private inventories:						
5   Change in inventories for nondurable						
        manufacturing....................	      14.3	16.1	  23.4	     7.5    12.3      6.4
						
5a  Change in inventories for merchant						
        wholesale and retail industries other						
        than motor vehicles and equipment..	      48.2	76.5      57.6	    49.8    76.7     34.5
						
Net exports:						
   Exports of goods:						
6     U.S. exports of goods,
       international-transactions-
       accounts basis.....................           982.0    1008.7    1043.5    1025.5  1055.7   1069.2
						
6a     Excluding gold.....................           975.1     999.3    1033.2    1017.8  1045.4   1060.2
						
   Imports of goods:						
7     U.S. imports of goods,						
       international-transactions-
       accounts basis.....................          1816.8    1860.9    1883.6    1906.9  1962.2   1915.1
						
7a      Excluding gold....................          1811.4    1853.9    1877.5    1900.9  1957.2   1909.6
						
8   Net exports of goods..................          -834.8    -852.2    -840.2    -881.4  -906.5   -845.8
						
8a      Excluding gold....................          -836.4    -854.6    -844.3    -883.1  -911.9   -849.4
						
Government:						
   State and local:						
      Structures:						
9       Value of new construction put						
            in place......................           247.6     252.3     254.8     251.1   254.7    252.9
____________						
*Assumption.