Home > News Release: Gross Domestic Product (GDP) and Corporate Profits
EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, THURSDAY, SEPTEMBER 29, 2011
BEA 11-49


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Lisa S. Mataloni: (202) 606-5304 (GDP) gdpniwd@bea.gov
Greg Key: (202) 606-5564 (Profits) cpniwd@bea.gov
Recorded message: (202) 606-5306    
Ralph Stewart: (202) 606-2649 (News Media)  
Thomas Dail: (202) 606-2649 (News Media)  
National Income and Product Accounts
Gross Domestic Product, 2nd quarter 2011 (third estimate)
Corporate Profits, 2nd quarter 2011 (revised estimate)
Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 1.3 percent in the second quarter of 2011,
(that is, from the first quarter to the second quarter), according to the "third" estimate released by the
Bureau of Economic Analysis.  In the first quarter, real GDP increased 0.4 percent.

      The GDP estimate released today is based on more complete source data than were available for
the "second" estimate issued last month.  In the second estimate, the increase in real GDP was 1.0
percent (see "Revisions" on page 3).

      The increase in real GDP in the second quarter primarily reflected positive contributions from
nonresidential fixed investment, personal consumption expenditures (PCE), exports, and federal
government spending that were partly offset by negative contributions from state and local government
spending and private inventory investment.  Imports, which are a subtraction in the calculation of GDP,
increased.

      The acceleration in real GDP in the second quarter primarily reflected a deceleration in imports,
an upturn in federal government spending, and an acceleration in nonresidential fixed investment that
were partly offset by a deceleration in PCE, a downturn in private inventory investment, and a
deceleration in exports.

      Final sales of computers added 0.07 percentage point to the second-quarter change in real GDP
after adding 0.08 percentage point to the first-quarter change.  Motor vehicle output subtracted 0.10
percentage point from the second-quarter change in real GDP after adding 1.08 percentage points to the
first-quarter change.
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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 (2005) 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,
increased 3.3 percent in the second quarter, the same increase as in the second estimate; this index
increased 4.0 percent in the first quarter.  Excluding food and energy prices, the price index for gross
domestic purchases increased 2.7 percent in the second quarter, compared with an increase of 2.4
percent in the first.

      Real personal consumption expenditures increased 0.7 percent in the second quarter, compared
with an increase of 2.1 percent in the first.  Durable goods decreased 5.3 percent, in contrast to an
increase of 11.7 percent.  Nondurable goods increased 0.2 percent, compared with an increase of 1.6
percent.  Services increased 1.9 percent, compared with an increase of 0.8 in the first.

       Real nonresidential fixed investment increased 10.3 percent, compared with an increase of 2.1
percent.  Nonresidential structures increased 22.6 percent, in contrast to a decrease of 14.3 percent.
Equipment and software increased 6.2 percent, compared with an increase of 8.7 percent.  Real
residential fixed investment increased 4.2 percent, in contrast to a decrease of 2.4 percent.

      Real exports of goods and services increased 3.6 percent in the second quarter, compared with an
increase of 7.9 percent in the first.  Real imports of goods and services increased 1.4 percent, compared
with an increase of 8.3 percent.

      Real federal government consumption expenditures and gross investment increased 1.9 percent
in the second quarter, in contrast to a decrease of 9.4 percent in the first.  National defense increased 7.0
percent, in contrast to a decrease of 12.6 percent.  Nondefense decreased 7.6 percent, compared with a
decrease of 2.7 percent.  Real state and local government consumption expenditures and gross
investment decreased 2.8 percent, compared with a decrease of 3.4 percent.

      The change in real private inventories subtracted 0.28 percentage point from the second-quarter
change in real GDP, after adding 0.32 percentage point to the first-quarter change.  Private businesses
increased inventories $39.1 billion in the second quarter, following increases of $49.1 billion in the first
quarter and $38.3 billion in the fourth.

      Real final sales of domestic product -- GDP less change in private inventories -- increased 1.6
percent in the second quarter, after increasing less than 0.1 percent.


Gross domestic purchases

      Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 1.0 percent in the second quarter, compared with an increase of 0.7 percent in the
first.


Gross national product

      Real gross national product -- the goods and services produced by the labor and property
supplied by U.S. residents -- increased 2.2 percent in the second quarter, compared with an increase of
1.5 percent in the first.  GNP includes, and GDP excludes, net receipts of income from the rest of the
world, which increased $28.0 billion in the second quarter after increasing $36.6 billion in the first; in
the second quarter, receipts increased $39.4 billion, and payments increased $11.4 billion.
Current-dollar GDP

      Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
4.0 percent, or $145.0 billion, in the second quarter to a level of $15,012.8 billion.  In the first quarter,
current-dollar GDP increased 3.1 percent, or $112.8 billion.


Revisions

      The third estimate of the second-quarter increase in real GDP is 0.3 percentage point, or $11.3
billion, higher than the second estimate issued last month, primarily reflecting an upward revision to
personal consumption expenditures, a downward revision to imports, and an upward revision to exports.

                                               Advance Estimate   Second Estimate    Third Estimate
                                                       (Percent change from preceding quarter)

Real GDP..........................................    1.3               1.0               1.3
Current-dollar GDP................................    3.7               3.5               4.0
Gross domestic purchases price index..............    3.2               3.3               3.3




                                           Corporate Profits

      Profits from current production (corporate profits with inventory valuation and capital
consumption adjustments) increased $61.2 billion in the second quarter, compared with an increase of
$19.0 billion in the first quarter.  Current-production cash flow (net cash flow with inventory valuation
adjustment) -- the internal funds available to corporations for investment -- increased $86.2 billion in the
second quarter, compared with an increase of $21.1 billion in the first.

      Taxes on corporate income decreased $1.8 billion in the second quarter, in contrast to an increase
of $17.6 billion in the first.  Profits after tax with inventory valuation and capital consumption
adjustments increased $63.0 billion in the second quarter, compared with an increase of $1.4 billion in
the first.  Dividends increased $13.6 billion, compared with an increase of $19.0 billion; current-
production undistributed profits increased $49.3 billion, in contrast to a decrease of $17.6 billion.

      Domestic profits of financial corporations decreased $54.2 billion in the second quarter,
compared with a decrease of $38.7 billion in the first.  Domestic profits of nonfinancial corporations
increased $80.8 billion in the second quarter, compared with an increase of $19.7 billion in the first.  In
the second quarter, real gross value added of nonfinancial corporations increased, and profits per unit of
real value added increased.  The increase in unit profits reflected an increase in unit prices and decreases
in both the unit labor and nonlabor costs that corporations incurred.


      The rest-of-the-world component of profits increased $34.6 billion in the second quarter,
compared with an increase of $37.9 billion in the first.  This measure is calculated as (1) receipts by U.S.
residents of earnings from their foreign affiliates plus dividends received by U.S. residents from
unaffiliated foreign corporations minus (2) payments by U.S. affiliates of earnings to their foreign
parents plus dividends paid by U.S. corporations to unaffiliated foreign residents.  The second-quarter
increase was accounted for by a larger increase in receipts than in payments.

      Profits before tax with inventory valuation adjustment is the best available measure of industry
profits because estimates of the capital consumption adjustment by industry do not exist.  This measure
reflects depreciation-accounting practices used for federal income tax returns.  According to this
measure, domestic profits of financial corporations decreased while domestic profits of nonfinancial
corporations increased.  The increase in profits of nonfinancial corporations reflected increases in all the
major subaggregates shown, except for retail trade.  Within manufacturing, the largest increase in profits
was for petroleum and coal products.

      Profits before tax increased $13.5 billion in the second quarter, compared with an increase of
$134.6 billion in the first.  The before-tax measure of profits does not reflect, as does profits from
current production, the capital consumption and inventory valuation adjustments.  These adjustments
convert depreciation of fixed assets and inventory withdrawals reported on a tax-return, historical-cost
basis to the current-cost measures used in the national income and product accounts.  The capital
consumption adjustment decreased $8.1 billion in the second quarter (from $115.4 billion to $107.3
billion), compared with a decrease of $89.8 billion in the first.  The inventory valuation adjustment
increased $55.6 billion (from -$116.0 billion to -$60.4 billion), in contrast to a decrease of $25.7 billion.


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                           Next release -- October 27, 2011, at 8:30 A.M. EDT for:
                       Gross Domestic Product:  Third Quarter 2011 (Advance Estimate)