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Technical Note

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                            Technical Note
                        Gross Domestic Product
                  Fourth Quarter of 2006 (Preliminary)
                           February 28, 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 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 

Sources of Revision to Real GDP
The real GDP growth rate in the fourth quarter was revised from 3.5 percent to 2.2 
percent (annual rate).  This month's GDP revision is relatively large.  The average
revision (without regard to sign) between the "advance" and "preliminary" estimates is
0.5 percentage point, and a revision of 1.3 percentage points or larger has occurred only 
seven times in 30 years.  This month, most of the major components of GDP were 
revised down.  Typically, revisions to the components tend to offset each other.

   .   Inventory investment was revised down, reflecting newly available Census
       Bureau inventory data for December and revised data for November.
   .   Consumer spending for goods was revised down, reflecting revised Census retail
       sales data for November and December and newly available motor vehicle
       registration data for December.
   .   Imports were revised up, reflecting newly available Census goods data for

Revisions to Wages and Salaries and Disposable Personal Income

Wage-and-salary accruals for the fourth quarter are now estimated to have increased 
$134.2 billion, an upward revision of $43.4 billion.  The revision to fourth-quarter accrued 
wages and salaries mostly reflected irregular pay such as bonus payments and gains on 
the exercise of stock options (types of pay not included in the usual monthly source 
data), which added about $50 billion to the fourth quarter.  The adjustment to fourth-
quarter wage-and-salary accruals is based on data from state governments and other 
sources.  The disbursement of these accrued wages and salaries will be reflected in the 
personal income estimates for the first quarter of 2007.

In addition to presenting preliminary estimates for the fourth quarter, today?s news 
release also presents revised estimates of third-quarter wages and salaries, personal 
taxes, and contributions for government social insurance.  Wage-and-salary accruals are 
now estimated to have increased $46.7 billion in the third quarter, a downward revision 
of $26.9 billion.   These estimates reflect newly available wage-and-salary tabulations for 
the third 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 

Real disposable personal income is now estimated to have increased 3.2 percent in the 
third quarter and to have increased 5.3 percent in the fourth.  (By comparison, the 
estimates that were available last month showed an increase of 4.1 percent in the third 
quarter and an increase of 5.4 percent in the fourth.)

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 FOURTH QUARTER OF 2006					 	

This table shows the actual data used for the preliminary estimate of GDP for the fourth quarter of						
2006.  For these key series, actual data for December were not available in time for inclusion in the						
advance GDP estimate released on January 31, 2007, and BEA made assumptions for these source						
data.  The numbers in brackets show the December values that had been assumed for the advance						
estimate.  For most series, the data incorporated for November and, in some cases, for October, 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.						

	                                         Jul.    Aug.    Sep.    Oct.    Nov.    Dec.
Private fixed investment:						
   Nonresidential structures:						
1     Value of new nonresidential						
          construction put in place.......	303.0	312.1	310.5	307.5	311.8	314.5
				                                       {312.0} {316.5} {314.2}
   Equipment and software:						
2     Manufacturers' shipments of						
          complete aircraft...............       30.6	 34.8	 38.8    34.4    34.2	 33.5
				 	                                        {34.2}	{33.5}
   Residential structures:						
      Value of new residential						
         construction put in place:						
3       Single family....................       411.3	400.1	388.7	375.1	363.9	355.8
				                                       {374.0} {362.5} {356.0}
4       Multifamily.....................         55.4	 56.4	 57.3    59.0    59.1	 57.8
				                                        {59.4}	{60.1}	{59.0}
Change in private inventories:						
5   Change in inventories for nondurable	  7.5     9.3    -4.4    -8.6     0.8	 -8.8
        manufacturing...................				         {4.6}   {5.0}
5a  Change in inventories for merchant						
        wholesale and retail industries other						
        than motor vehicles and equipment....    49.8	 84.0    30.3	 24.0	 56.6	 12.3
					                                        {68.5}	{71.1}
Net exports:						
   Exports of goods:						
6     U.S. exports of goods,"						
          accounts basis....................   1022.3  1053.1  1059.9	1058.9	1068.1	1073.0
6a     Excluding gold.......................   1014.7  1042.8  1049.1	1049.6	1059.9	1063.5
   Imports of goods:						
7     U.S. imports of goods,"						
          accounts basis....................   1904.8   1952.6  1904.5	1840.3	1845.4	1891.2
7a      Excluding gold......................   1898.9   1947.7  1898.8	1934.8	1840.6	1886.1
8   Net exports of goods....................   -882.5   -899.5  -844.6	-781.4	-777.2	-818.2
8a      Excluding gold......................   -884.2   -904.9  -849.7	-785.2	-780.7	-822.7
   State and local:						
9       Value of new construction put						
            in place........................    252.2    252.3    253.0	 253.4	 258.7	 261.8
				                                        {255.9}	{258.7}	{257.3}