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Technical Note
Gross Domestic Product
First Quarter of 2009 (Preliminary)
May 29, 2009

*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 first
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 5.7 percent (annual rate) in the first quarter (that is, from the fourth quarter to
the first).  This estimate is an upward revision from the advance estimate that was released last month,
which showed a decrease of 6.1 percent.

*     Inventory investment was revised up, reflecting newly available Census Bureau inventory data for
      March and revised data for January and February.
*     Exports were revised up, reflecting Census goods data and BEA services data, which were newly
      available for March and revised for February, and revised BLS export price indexes.
*     Consumer spending was revised down, reflecting revised Census retail sales data for February and
      March and the incorporation of the 2007 Annual Retail Trade Survey on a best-change basis.

The price index for gross domestic purchases decreased 1.0 percent in the first quarter, the same as the
advance estimate.

Corporate Profits

Profits from current production increased $42.6 billion, or 3.4 percent (quarterly rate), in the first
quarter, after decreasing $250.3 billion, or 16.5 percent, in the fourth.

Revisions to Wages and Salaries and Disposable Personal Income

In addition to presenting preliminary estimates for the first quarter, today's release also presents revised
estimates of fourth-quarter wages and salaries, personal taxes, and contributions for government social
insurance.  Wage and salary disbursements are now estimated to have decreased $21.0 billion in the fourth
quarter, a downward revision of $8.6 billion.  These estimates reflect newly available wage and salary
tabulations for the fourth 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 2.9 percent in the fourth quarter and
to have increased 6.5 percent in the first.  (By comparison, the estimates that were available last month
showed an increase of 2.7 percent in the fourth quarter and an increase of 6.2 percent in the first.)

Comprehensive NIPA Revision Scheduled for July 31

On July 31, 2009, BEA will present the results of its comprehensive revision of the national income and
product accounts (NIPAs).  A series of articles in the Survey of Current Business discusses the revision
in detail; these articles and other information about the revision are available on the BEA Web site at
http://www.bea.gov/national/an1.htm.

The comprehensive revision will incorporate the results of the 2002 Benchmark Input-Output Accounts, as
well as other improvements to the definitions, classifications, and methodologies used in the accounts.

For the upcoming comprehensive revision, BEA is planning a number of major improvements, including the
following:

*     A new classification system will be introduced for personal consumption expenditures (PCE).  It will
      provide more information on consumer spending for major categories such as financial services and
      recreation and will separately identify spending by households and by nonprofit institutions.
*     BEA will change its treatment of disasters, such as hurricanes and earthquakes, to better distinguish
      current spending from transactions that are primarily used for capital investment, such as rebuilding
      activities.
*     The estimates of PCE for consumer electronics will be improved by using retail point-of-sale scanner
      data to track the composition of spending.
*     The estimates of wages and salaries will incorporate new information on employee contributions to
      “cafeteria plans,” which allow employees to use a portion of their salaries on a pretax basis to pay
      for health insurance, medical care, or dependent care.
*     The estimates of proprietors’ income will incorporate improved adjustments for misreporting using the
      results of the IRS National Research Program.

The reference year for chain-type quantity and price indexes and chained-dollar
estimates will be updated from 2000 to 2005.


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