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GROSS DOMESTIC PRODUCT: FOURTH QUARTER 2008 (PRELIMINARY)
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 6.2 percent in the fourth quarter of 2008, (that is, from the third quarter to the fourth quarter), according to preliminary estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP decreased 0.5 percent. The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the decrease in real GDP was 3.8 percent (see "Revisions" on page 3). The decrease in real GDP in the fourth quarter primarily reflected negative contributions from exports, personal consumption expenditures, equipment and software, and residential fixed investment that were partly offset by a positive contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, decreased. Most of the major components contributed to the much larger decrease in real GDP in the fourth quarter than in the third. The largest contributors were a downturn in exports and a much larger decrease in equipment and software. The most notable offset was a much larger decrease in imports. Final sales of computers subtracted 0.01 percentage point from the fourth-quarter change in real GDP, the same contribution as in the third quarter. Motor vehicle output subtracted 2.04 percentage points from the fourth-quarter change in real GDP after adding 0.16 percentage point to the third-quarter change. _________________________________________ FOOTNOTE.--Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized. “Real” estimates are in chained (2000) dollars. Price indexes are chain-type measures. This news release is available on BEA’s Web site along with the Technical Note and Highlights related to this release. __________________________________________ The price index for gross domestic purchases, which measures prices paid by U.S. residents, decreased 4.1 percent in the fourth quarter, 0.5 percentage point less of a decrease than in the advance estimate; this index increased 4.5 percent in the third quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.1 percent in the fourth quarter, compared with an increase of 2.8 percent in the third. Real personal consumption expenditures decreased 4.3 percent in the fourth quarter, compared with a decrease of 3.8 percent in the third. Real nonresidential fixed investment decreased 21.1 percent, compared with a decrease of 1.7 percent. Nonresidential structures decreased 5.9 percent, in contrast to an increase of 9.7 percent. Equipment and software decreased 28.8 percent, compared with a decrease of 7.5 percent. Real residential fixed investment decreased 22.2 percent, compared with a decrease of 16.0 percent. Real exports of goods and services decreased 23.6 percent in the fourth quarter, in contrast to an increase of 3.0 percent in the third. Real imports of goods and services decreased 16.0 percent, compared with a decrease of 3.5 percent. Real federal government consumption expenditures and gross investment increased 6.7 percent in the fourth quarter, compared with an increase of 13.8 percent in the third. National defense increased 3.1 percent, compared with an increase of 18.0 percent. Nondefense increased 15.1 percent, compared with an increase of 5.1 percent. Real state and local government consumption expenditures and gross investment decreased 1.4 percent, in contrast to an increase of 1.3 percent. The real change in private inventories added 0.16 percentage point to the fourth-quarter change in real GDP, after adding 0.84 percentage point to the third-quarter change. Private businesses decreased inventories $19.9 billion in the fourth quarter, following a decrease of $29.6 billion in the third quarter and a decrease of $50.6 billion in the second. Real final sales of domestic product -- GDP less change in private inventories -- decreased 6.4 percent in the fourth quarter, compared with a decrease of 1.3 percent in the third. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- decreased 5.6 percent in the fourth quarter, compared with a decrease of 1.5 percent in the third. Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services -- decreased 5.8 percent, or $212.5 billion, in the fourth quarter to a level of $14,200.3 billion. In the third quarter, current-dollar GDP increased 3.4 percent, or $118.3 billion. Revisions The preliminary estimate of the fourth-quarter change in real GDP is 2.4 percentage points, or $74.4 billion, lower than the advance estimate issued last month. The downward revision to the percent change in real GDP was widespread; the largest contributors were downward revisions to private inventory investment, to exports, and to personal consumption expenditures for nondurable goods. Advance Preliminary (Percent change from preceding quarter) Real GDP........................................ -3.8 -6.2 Current-dollar GDP.............................. -4.1 -5.8 Gross domestic purchases price index............ -4.6 -4.1 2008 GDP Real GDP increased 1.1 percent in 2008 (that is, from the 2007 annual level to the 2008 annual level), compared with an increase of 2.0 percent in 2007. The major contributors to the increase in real GDP in 2008 were exports, personal consumption expenditures (PCE) for services, federal government spending, nonresidential structures, and state and local government spending. These were partly offset by negative contributions from residential fixed investment, PCE for goods, private inventory investment, and equipment and software. Imports, which are a subtraction in the calculation of GDP, decreased. The slowdown in real GDP in 2008 primarily reflected a sharp deceleration in PCE, a downturn in equipment and software, and decelerations in exports and in state and local government spending that were partly offset by a sharp downturn in imports, an acceleration in federal government spending, and a smaller decrease in private inventory investment. The price index for gross domestic purchases increased 3.2 percent in 2008, compared with an increase of 2.8 percent in 2007. Current-dollar GDP increased 3.3 percent, or $457.0 billion, in 2008. Current-dollar GDP increased 4.8 percent, or $629.2 billion, in 2007. During 2008 (that is, measured from the fourth quarter of 2007 to the fourth quarter 2008), real GDP decreased 0.8 percent. Real GDP increased 2.3 percent during 2007. The price index for gross domestic purchases increased 2.0 percent during 2008, compared with an increase of 3.3 percent during 2007. * * * BEA's national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. * * * Next release -- March 26, 2009, at 8:30 A.M. EDT for: Gross Domestic Product: Fourth Quarter 2008 (Final) Corporate Profits: Fourth Quarter 2008