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Technical Note

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                           Technical Note
                       Gross Domestic Product
                   Second Quarter of 2007 (Preliminary)
                          August 30, 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 second 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 

Sources of Revision to Real GDP
The real GDP growth rate in the second quarter was revised from 3.4 percent to 4.0 
percent (annual rate).
     .  Exports were revised up and imports were revised down, reflecting newly
        available Census goods data for June.
     .  Business investment in nonresidential structures was revised up, reflecting newly
        available Census Bureau data on construction spending for June and revised
        data for April and May.

Corporate Profits

Profits from current production increased $98.3 billion, or 6.4 percent (quarterly rate), in 
the second quarter, after increasing $16.5 billion, or 1.1 percent, in the first.

Revisions to Wages and Salaries and Disposable Personal Income

In addition to presenting preliminary estimates for the second quarter, today's news 
release also presents revised estimates of first-quarter wages and salaries, personal 
taxes, and contributions for government social insurance.  Wage and salary 
disbursements are now estimated to have increased $141.4 billion in the first quarter, a 
downward revision of $17.0 billion.  These estimates reflect newly available wage and 
salary tabulations for the first 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. 

Also reflecting the newly available BLS source data, wage and salary accruals (a 
component of national income) are now estimated to have increased $91.4 billion in the 
first quarter, an upward revision of $33.0 billion.  The difference between the revisions to 
wage accruals and to wage disbursements reflects a BEA adjustment of about $25 
billion (revised down from the previous adjustment of about $50 billion) for bonus 
payments that accrued in the fourth quarter of 2006 and were disbursed in the first 
quarter of 2007.  (Because the estimates for the fourth quarter of 2006 will not be 
revised until the next annual revision in July 2008, the estimate for first-quarter wage and 
salary accruals was based on the best quarter-to-quarter change.)

Real disposable personal income is now estimated to have increased 5.4 percent in the 
first quarter and to have increased 0.1 percent in the second.  (By comparison, the 
estimates that were available last month showed an increase of 5.9 percent in the first 
quarter and a decrease of 0.8 percent in the second.)

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

                         ESTIMATES OF GDP FOR THE SECOND QUARTER OF 2007

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

                                                    Jan       Feb       Mar      Apr.       May      Jun.

Private fixed investment:
   Nonresidential structures:
1     Value of new nonresidential
          construction put in place...........     316.9     326.7     331.2     336.3     345.6     346.6
                                                                                {333.6}   {343.1}   {338.4}
   Equipment and software:
2     Manufacturers' shipments of
          complete aircraft...................      54.7      34.8      37.0      39.8      39.1      39.1
                                                                                           {39.1}    {38.4}
   Residential structures:
      Value of new residential
         construction put in place:
3       Single family.........................     344.3     333.1     330.9     326.9     321.3     316.8
                                                                                {327.5}   {323.6}   {319.1}

4       Multifamily...........................      53.9      53.1      52.7      51.1      51.3      51.6
                                                                                 {52.1}    {51.9}    {51.2}
Change in private inventories:
5   Change in inventories for nondurable           -15.9      -0.3       8.5      13.1      22.0      13.5
        manufacturing.........................                                             {19.8}     {6.5}

5a  Change in inventories for merchant
        wholesale and retail industries other
        than motor vehicles and equipment.....      23.5      57.9       6.1      50.8      44.9      26.8
                                                                                           {46.0}    {12.3}
Net exports:
   Exports of goods:
"6     U.S. exports of goods,"
          accounts basis......................    1085.9    1062.8    1092.7    1091.2    1121.3    1142.2
                                                                                         {1119.6}  {1124.9}
6a     Excluding gold.........................    1078.6    1055.5    1075.6    1073.4    1107.4    1124.5
                                                                                         {1105.7}  {1115.0}
   Imports of goods:
"7     U.S. imports of goods,"
          accounts basis......................    1861.4    1848.8    1941.6    1899.4    1943.1    1952.1
                                                                                         {1947.6}  {1970.1}
7a      Excluding gold........................    1856.8    1845.1    1926.4    1886.7    1932.0    1947.0
                                                                                         {1936.6}  {1963.8}

8   Net exports of goods......................    -775.5    -786.0    -848.9    -808.1    -821.8    -809.9
                                                                                         {-828.0}  {-845.2}
8a      Excluding gold........................    -778.2    -789.6    -850.7    -813.3    -824.6    -822.5
                                                                                         {-830.8}  {-848.9}
   State and local:
9       Value of new construction put
            in place..........................     255.9     253.8     258.4     260.3     266.0     266.3
                                                                                {260.5}   {265.8}   {263.1}