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 Economy").

GDP Deceleration

Real GDP increased 0.6 percent (annual rate) in the fourth quarter, compared
with an increase of 4.9 percent in the third quarter.  The deceleration in real GDP
growth reflected the following factors:

   .  Inventory investment turned down, subtracting 1.25 percentage points
      from GDP growth in the fourth quarter, after adding 0.89 percentage point
      in the third.  The downturn was mostly in motor vehicle inventories.
   .  The contribution of net exports to GDP growth was smaller in the fourth
      quarter (0.41 percentage point) than in the third (1.38 percentage points).
      The effects of a deceleration in exports were partly offset by a
      deceleration in imports.
   .  Consumer spending slowed, contributing 1.37 percentage points to fourth
      quarter growth after contributing 2.01 percentage points in the third.

Housing investment continued to be a drag, subtracting 1.18 percentage points
from GDP growth in the fourth quarter after subtracting 1.08 percentage points in
the third.


Source Data for the Advance Estimate

The advance GDP estimate for the fourth quarter of 2007 is based on source
data that are incomplete and subject to revision.  Three months of source data
were available for consumer spending on goods; shipments of capital equipment
other than aircraft; motor vehicle sales and inventories; manufacturing durables
inventories; federal government outlays; and consumer, producer, and
international prices.  Only two months of data were available for most other key
data sources; BEA's assumptions for the third month are shown in table A.
Among those assumptions are the following:

   .  An increase in nondurable manufacturing inventories,
   .  an increase in non-motor-vehicle merchant wholesale and retail
      inventories,
   .  an increase in exports of goods, excluding gold, and
   .  a small decrease in imports of goods, excluding gold.

Prices

The price index for gross domestic purchases increased 3.8 percent in the fourth
quarter, compared with increases of 1.8 percent in the third quarter and 3.8
percent in both the first and second quarters.  This pattern of price change
largely reflected movements in energy prices.  Excluding food and energy prices,
the price index for gross domestic purchases increased 2.5 percent in the fourth
quarter, after increasing 1.9 percent in the third.


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

• Entire Note and Table
  (PDF • 40KB) 
• Entire Note and Table (Text)
  (Text • 7KB) 
• Table Only
  (Excel • 25KB)

• Interactive Tables