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Technical Note

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                              Technical Note
                          Gross Domestic Product
                   First Quarter of 2007 (Preliminary)
                               May 31, 2007

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 first 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 Real GDP
     
The real GDP growth rate in the first quarter was revised from 1.3 percent to 0.6 percent 
(annual rate).
 
    .   Inventory investment was revised down, reflecting newly available Census
        Bureau inventory data for March and revised data for February.

    .   Imports were revised up, reflecting newly available Census goods data for
        March.


Corporate Profits

Profits from current production increased $20.3 billion, or 1.2 percent (quarterly rate), in 
the first quarter, after decreasing $4.9 billion, or 0.3 percent, in the fourth.


Revisions to Wages and Salaries and Disposable Personal Income

In addition to presenting preliminary estimates for the first quarter, today's news release
also presents revised estimates of fourth-quarter wages and salaries, personal taxes, 
and contributions for government social insurance.  Wage and salary disbursements are 
now estimated to have increased $118.0 billion in the fourth quarter, an upward revision 
of $33.3 billion.   These estimates reflect newly available wage-and-salary tabulations for 
the fourth quarter from the Bureau of Labor Statistics quarterly census of employment 
and wages.  These data are more comprehensive than the monthly employment and 
earnings data that were used for the earlier estimates--they include the pay of
supervisors and irregular pay, such as bonuses and gains from the exercise of stock 
options. 

In addition to the BLS source data, BEA's estimates of fourth-quarter wage and salary
accruals (a component of national income) and first-quarter wage and salary 
disbursements (a component of personal income) continue to reflect an adjustment of 
about $50 billion for irregular pay such as bonus payments that was accrued in the 
fourth quarter and disbursed in the first.  This is a one-quarter adjustment that will not be 
carried forward in the estimates of wage and salary disbursements for the second 
quarter.

Real disposable personal income is now estimated to have increased 6.4 percent in the 
fourth quarter and to have increased 4.7 percent in the first.  (By comparison, the 
estimates that were available last month showed an increase of 5.3 percent in the fourth 
quarter and an increase of 4.5 percent in the first.)


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


                      Table A.--SOURCE DATA FOR THE ADVANCE AND PRELIMINARY
                         ESTIMATES OF GDP FOR THE FIRST QUARTER OF 2007

This table shows the actual data used for the preliminary estimate of GDP for the first quarter of
"2007.  For these key series, actual data for March were not available in time for inclusion in the"
"advance GDP estimate released on April 27, 2007, and BEA made assumptions for these source"
data.  The numbers in brackets show the March values that had been assumed for the advance
"estimate.  For most series, the data incorporated for February and, in some cases, for January, were"
"preliminary, and the numbers shown in brackets are the values used last month."

"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                      2007
                                                  Oct.     Nov.     Dec.     Jan.     Feb.     Mar.

Private fixed investment:
   Nonresidential structures:
1     Value of new nonresidential
          construction put in place...........    307.5    312.0    315.6    314.5    323.9    331.5
                                                                            {314.6}  {322.0}  {325.2}
   Equipment and software:
2     Manufacturers' shipments of
          complete aircraft...................     34.4     34.2     33.5     47.1     42.1     38.2
                                                                                      {42.1}   {34.1}
   Residential structures:
      Value of new residential
         construction put in place:
3       Single family.........................    375.1    361.5    354.6    343.6    332.8    333.1
                                                                            {341.4}  {331.4}  {329.5}

4       Multifamily...........................     59.0     58.6     57.4     56.8     57.1     57.2
                                                                             {56.7}   {56.7}   {56.4}
Change in private inventories:
5   Change in inventories for nondurable          -21.6      1.6     -9.8    -15.9     -0.3      4.7
        manufacturing.........................    {-8.6}    {0.8}   {-7.2}  {-14.7}   {-2.7}   {12.1}

5a  Change in inventories for merchant
        wholesale and retail industries other
        than motor vehicles and equipment.....     22.2     47.1     27.0     23.5     57.9     -7.6
                                                                                      {65.2}   {45.0}
Net exports:
   Exports of goods:
"6     U.S. exports of goods,"
          international-transactions-
          accounts basis......................   1058.9   1068.1   1072.5   1092.6   1060.9   1082.1
                                                                                    {1061.3} {1084.9}
6a     Excluding gold.........................   1049.6   1059.9   1063.0   1085.4   1053.6   1065.0
                                                                                    {1053.9} {1066.4}
   Imports of goods:
"7     U.S. imports of goods,"
          international-transactions-
          accounts basis......................   1840.3   1845.4   1889.1   1874.6   1830.7   1924.0
                                                                                    {1835.0} {1871.2}
7a      Excluding gold........................   1834.8   1840.6   1884.0   1870.0   1827.0   1908.8
                                                                                    {1831.1} {1856.7}

8   Net exports of goods......................   -781.4   -777.3   -816.7   -782.0   -769.8   -841.9
                                                                                    {-773.7} {-786.3}
8a      Excluding gold........................   -785.2   -780.7   -821.0   -784.7   -773.4   -843.7
                                                                                    {-777.2} {-790.3}
Government:
   State and local:
      Structures:
9       Value of new construction put
            in place..........................    253.4    256.7    261.0    268.2    267.8    269.7
                                                                            {265.0}  {266.6}  {265.8}