Technical Note
Gross Domestic Product and Corporate Profits
Third Quarter of 2008 (Preliminary)
November 25, 2008

*See the navigation bar at the right side of the technical note text for supplementary materials.


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 third 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 decreased 0.5 percent (annual rate) in the third quarter (that is, from the
second quarter to the third).  This estimate is a downward revision from the advance
estimate that was released last month, which showed a decrease of 0.3 percent.

*       Consumer spending was revised down, reflecting revised Census Bureau
        retail sales data for August and September, newly available Energy Information
        Administration data on gasoline, electricity, and natural gas, and a wide variety of
        source data for services.

*       Exports and imports were revised down, reflecting newly available
        Census goods data for September and revised goods data for August.

*       Inventory investment was revised up, reflecting newly available Census
        inventory data for September and newly available BLS producer price indexes
        for October.

The price index for gross domestic purchases increased 4.7 percent in the third quarter,
which was 0.1 percentage point less than the preliminary estimate.  The
revision primarily reflected a downward revision to the implicit price for
banking services that was based on newly available Federal Reserve Board
tabulations of Call Report data for the third quarter.  The “market-based” PCE
price index, which excludes most imputed expenditures, increased 5.7 percent
in the third quarter.  For more information, see the FAQ on the BEA Web site,
“What is the ‘market-based’ PCE price index?”

Corporate Profits

Profits from current production decreased $14.6 billion, or 0.9 percent (quarterly rate), in
the third quarter, after decreasing $60.2 billion, or 3.8 percent, in the second.

Third-quarter profits from current production were reduced by $46.2 billion because of
Hurricane Ike, reflecting the net benefits paid by domestic insurance companies and
uninsured losses of corporate property.

Revisions to Wages and Salaries and Disposable Personal Income

In addition to presenting preliminary estimates for the third quarter, today's release also
presents revised estimates of second-quarter wages and salaries, personal taxes, and
contributions for government social insurance.  Wage and salary disbursements are now
estimated to have increased $13.3 billion in the second quarter, a downward revision of
$37.3 billion.  These estimates reflect newly available wage and salary tabulations for
the second 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.

Real disposable personal income is now estimated to have increased 10.7 percent in the
second quarter and to have decreased 9.2 percent in the third.  (By comparison, the
estimates that were available last month showed an increase of 11.9 percent in the
second quarter and a decrease of 8.7 percent in the third.)  The quarterly pattern of DPI
reflects the rebate payments to individuals from the Economic Stimulus Act of 2008,
which added $311.6 billion (annual rate) to second quarter current-dollar DPI.


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 THIRD QUARTER OF 2008

This table shows the actual data used for the preliminary estimate of GDP for the third quarter of
2008.  For these key series, actual data for September were not available in time for inclusion in the
advance GDP estimate released on October 30, 2008, and BEA made assumptions for these source
data.  The numbers in brackets show the September values that had been assumed for the advance
estimate.  For most series, the data incorporated for August and, in some cases, for July, 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.

                                                                                2008
                                                         Apr.      May       Jun.      Jul.      Aug.     Sept.

Private fixed investment:
   Nonresidential structures:
1     Value of new nonresidential
          construction put in place...............      400.2     412.8     424.0     417.0     410.3     415.2
                                                                                     {419.3}   {416.0}   {415.6}
   Equipment and software:
2     Manufacturers' shipments of
          complete aircraft.......................       41.6      45.9      41.9      41.9      47.9      24.6
                                                                                                {47.9}    {14.0}
   Residential structures:
      Value of new residential
         construction put in place:
3       Single family.............................      203.6     198.2     191.4     185.1     177.7     169.3
                                                                                     {184.7}   {176.9}   {168.4}

4       Multifamily...............................       44.3      45.8      45.7      47.1      44.0      45.2
                                                                                      {46.6}    {44.6}    {42.4}
Change in private inventories:
5   Change in inventories for nondurable
    manufacturing.................................       -24.0     20.1      49.2       4.6      10.4     -63.8
                                                                                                {10.3}   {-42.0}

5a  Change in inventories for merchant
        wholesale and retail industries other
        than motor vehicles and equipment.........       80.0      39.8      54.6      91.3      20.5      14.3
                                                                                                {31.7}    {-8.2}
Net exports:
   Exports of goods:
"6     U.S. exports of goods,"
          international-transactions-
          accounts basis..........................     1320.7    1332.0    1395.1    1450.0    1414.6    1296.9
                                                                                              {1411.7}  {1331.7}
6a     Excluding gold.............................     1296.1    1312.7    1381.8    1427.8    1403.3    1277.2
                                                                                              {1400.4}  {1309.5}
   Imports of goods:
"7     U.S. imports of goods,"
          international-transactions-
          accounts basis..........................     2196.1    2197.3    2250.3    2339.4    2267.3    2132.1
                                                                                              {2262.5}  {2167.9}
7a      Excluding gold............................     2177.3    2187.7    2240.8    2325.9    2260.3    2114.4
                                                                                              {2255.6}  {2151.9}

8   Net exports of goods..........................     -875.4    -865.3    -855.2    -889.4    -852.7    -835.2
                                                                                              {-850.8}  {-836.2}
8a      Excluding gold............................     -881.2    -875.0    -859.0    -898.1    -856.9    -837.1
                                                                                              {-855.1}  {-842.5}
Government:
   State and local:
      Structures:
9       Value of new construction put
            in place..............................      278.9     281.5     283.3     284.6     287.9     285.7
                                                                                     {286.2}   {288.5}   {287.3}