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Technical Note

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                             Technical Note
                         Gross Domestic Product
                      Fourth Quarter of 2005 (Final)
                             March 30, 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 fourth 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").  

Sources of Revision to Components of Real GDP
     
Real GDP growth in the fourth quarter was 1.7 percent, which was 0.1 percentage point 
more than that in the preliminary estimate.  The small upward revision to real GDP 
reflected an upward revision to inventories that was partly offset by a downward revision 
to personal consumption expenditures (PCE) for services:

    *  Inventory investment was revised up, reflecting revised Census Bureau data for
       December on manufacturing and trade inventories and newly available Energy
       Information Administration (EIA) data for November and December on utility
       inventories.
    *  PCE services were revised down, reflecting newly available EIA data for
       December on electricity sales and newly available Securities and Exchange
       Commission data for the fourth quarter on brokerage commissions.

The price index for gross domestic purchases increased 3.7 percent in the fourth 
quarter, 0.1 percentage point more than in the preliminary estimate.  The price index for 
PCE services was revised up, primarily reflecting revisions by the Bureau of Labor 
Statistics to the October producer price indexes for hospitals.


Corporate Profits

Profits from current production increased $185.8 billion, or 14.4 percent, in the fourth 
quarter, compared with a decrease of $54.4 billion, or 4.0 percent, in the third.  Fourth-
quarter profits were reduced by $22.9 billion (at an annual rate) because of Hurricane 
Wilma, reflecting the net benefits paid by domestic insurance companies and the 
uninsured losses of corporate property.  Third-quarter profits were reduced by $165.3 
billion (at an annual rate) because of Hurricanes Katrina and Rita.  For further 
information on the treatment of the hurricanes in the national accounts, see the FAQs 
available on BEA?s Web site, www.bea.gov.

Brent R. Moulton  
Associate Director for National Economic Accounts
Bureau of Economic Analysis  
(202) 606-9606