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
Economy").

Sources of Revision to Real GDP

Real GDP growth in the second quarter (that is, from the first quarter to the second) was
2.8 percent (annual rate), which was 0.5 percentage point less than the preliminary
estimate.  Downward revisions to consumer spending, to business investment in
equipment and software, and to exports were partly offset by an upward revision to
business investment in nonresidential structures:

*       The downward revision to consumer spending was mostly to services-
        specifically, electricity services-reflecting the incorporation of newly
        available Energy Information Administration electricity usage and unit value
        data for April and May.
*       The largest contributors to the downward revision to business investment
        in equipment and software were prepackaged and custom software, reflecting the
        incorporation of Census Bureau quarterly services survey data.
*       The downward revision to exports was mostly to exports of services and
        reflected the incorporation of quarterly international transactions accounts data.
*       The largest contributor to the upward
        revision to nonresidential structures was manufacturing structures, based on
        the incorporation of Census Bureau value of construction spending data for May
        and June.

The price index for gross domestic purchases-the prices paid by U.S.
residents for goods and services, wherever produced-increased 4.2 percent in
the second quarter, the same as in the preliminary estimate.  The price index
for GDP, which includes exports and excludes imports, increased 1.1 percent in
the second quarter, a downward revision of 0.1 percentage point.  The
difference in these two measures primarily reflected import prices, which
increased 28.8 percent in the second quarter, with petroleum prices accounting
for much of the increase.  For more information, see the FAQ, "Why are some of
the GDP statistics telling such a different story for the first half of 2008
than some other statistics such as employment and the CPI?"

Corporate Profits


Profits from current production decreased $60.2 billion, or 3.8 percent (quarterly rate), in
the second quarter, compared with a decrease of $37.8 billion in the preliminary
estimate.  Domestic profits decreased $35.3 billion, and rest-of-the-world profits
decreased $25.0 billion in the second quarter.  The revision to profits reflected new and
revised source data, which include preliminary tabulations of Census quarterly financial
reports, regulatory agency reports, and compilations of publicly available corporate
financial statements.


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

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