EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Friday, March 25, 2016
BEA 16—16


* See the navigation bar at the right side of the news release text for links to data tables,
contact personnel and their telephone numbers, and supplementary materials.


Lisa Mataloni: (202) 606-5304 (GDP) gdpniwd@bea.gov
Kate Pinard: (202) 606-5564 (Profits) cpniwd@bea.gov
Jeannine Aversa: (202) 606-2649 (News Media)  
National Income and Product Accounts
Gross Domestic Product: Fourth Quarter and Annual 2015 (Third Estimate)
Corporate Profits: Fourth Quarter and Annual 2015
      Real gross domestic product -- the value of the goods and services produced by the nation's
economy less the value of the goods and services used up in production, adjusted for price
changes -- increased at an annual rate of 1.4 percent in the fourth quarter of 2015, according to the
"third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased
2.0 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. With this third estimate for the fourth quarter, the general picture of economic growth remains
largely the same; personal consumption expenditures (PCE) increased more than previously estimated
(see "Revisions" on page 2).

      The increase in real GDP in the fourth quarter reflected positive contributions from PCE,
residential fixed investment, and federal government spending that were partly offset by negative
contributions from nonresidential fixed investment, exports, private inventory investment, and state and
local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

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

      Real gross domestic income (GDI), which measures the value of the production of goods and
services in the United States as the costs incurred and the incomes earned in production, increased 0.9
percent in the fourth quarter, compared with an increase of 2.0 percent in the third. The average of real
GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and
GDI, increased 1.1 percent in the fourth quarter, compared with an increase of 2.0 percent in the third.

_____
FOOTNOTE. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
specified. Percent changes are calculated from unrounded data and are annualized. "Real" estimates are
in chained (2009) dollars. Price indexes are chain-type measures.

This news release is available on BEA's Web site.
_____

      Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced --
increased 1.5 percent in the fourth quarter, compared with an increase of 2.2 percent in the third.

      The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 0.4 percent in the fourth quarter, compared with an increase of 1.3 percent in the third.
Excluding food and energy prices, the price index for gross domestic purchases increased 1.0 percent,
compared with an increase of 1.3 percent.

      Current-dollar GDP -- the market value of the goods and services produced by the nation's
economy less the value of the goods and services used up in production -- increased 2.3 percent, or
$104.6 billion, in the fourth quarter to a level of $18,164.8 billion. In the third quarter, current-dollar
GDP increased 3.3 percent, or $146.5 billion.


Revisions

      The upward revision to the percent change in real GDP primarily reflected upward revisions to
personal consumption expenditures (PCE) and to exports that were partly offset by a downward revision
to private inventory investment. For more information, see the Technical Note. For information on
revisions, see "The Revisions to GDP, GDI, and Their Major Components."




                                             Advance Estimate     Second Estimate     Third Estimate
					             (Percent change from preceding quarter)
Real GDP...............................            0.7                 1.0                 1.4
Current-dollar GDP.....................            1.5                 2.0                 2.3
Real GDI...............................            --                  --                  0.9
Average of Real GDP and Real GDI.......            --                  --                  1.1
Gross domestic purchases price index...            0.2                 0.4                 0.4



2015 GDP

      Real GDP increased 2.4 percent in 2015 (that is, from the 2014 annual level to the 2015 annual
level), the same rate as in 2014.

      The increase in real GDP in 2015 primarily reflected positive contributions from PCE,
nonresidential fixed investment, residential fixed investment, private inventory investment, exports, and
state and local government spending. Imports, which are a subtraction in the calculation of GDP,
increased.

      Comparing real GDP growth in 2015 with growth in 2014, real GDP increased 2.4 percent in
both years, though there were offsetting movements in the components. Decelerations in nonresidential
fixed investment and in exports and an acceleration in imports were offset by accelerations in PCE and
in residential fixed investment, a smaller decrease in federal government spending, and accelerations in
private inventory investment and in state and local government spending.

      The price index for gross domestic purchases increased 0.4 percent in 2015, compared with an
increase of 1.5 percent in 2014.

      Current-dollar GDP increased 3.5 percent, or $598.9 billion, in 2015 to a level of $17,947.0
billion, compared with an increase of 4.1 percent, or $684.9 billion, in 2014.

      During 2015 (that is, measured from the fourth quarter of 2014 to the fourth quarter of 2015),
real GDP increased 2.0 percent, compared with an increase of 2.5 percent during 2014. The price index
for gross domestic purchases increased 0.4 percent during 2015, compared with an increase of 1.2
percent during 2014.



                                              Corporate Profits

Profits from current production

      Profits from current production (corporate profits with inventory valuation adjustment (IVA) and
capital consumption adjustment (CCAdj)) decreased $159.6 billion in the fourth quarter, compared with
a decrease of $33.0 billion in the third.

      Profits of domestic financial corporations decreased $24.0 billion in the fourth quarter, in
contrast to an increase of $1.8 billion in the third. Profits of domestic nonfinancial corporations
decreased $129.2 billion, compared with a decrease of $11.8 billion. The rest-of-the-world component
of profits decreased $6.5 billion, compared with a decrease of $23.1 billion. This measure is calculated
as the difference between receipts from the rest of the world and payments to the rest of the world. In the
fourth quarter, receipts decreased $22.4 billion, and payments decreased $16.0 billion.

      Taxes on corporate income decreased $32.2 billion in the fourth quarter, compared with a
decrease of $6.9 billion in the third. Profits after tax with IVA and CCAdj decreased $127.4 billion,
compared with a decrease of $26.2 billion.

      Dividends decreased $15.1 billion in the fourth quarter, in contrast to an increase of $26.0 billion
in the third. Undistributed profits decreased $112.2 billion, compared with a decrease of $52.2 billion.
Net cash flow with IVA -- the internal funds available to corporations for investment -- decreased
$101.6 billion, compared with a decrease of $35.1 billion.

      The IVA and CCAdj are adjustments that convert inventory withdrawals and depreciation of
fixed assets reported on a tax-return, historical-cost basis to the current-cost economic measures used in
the national income and product accounts. The IVA increased $13.3 billion in the fourth quarter,
compared with an increase of $35.9 billion in the third. The CCAdj increased $3.6 billion, in contrast to
a decrease of $1.3 billion.

      For the year 2015, profits from current production decreased $64.0 billion, in contrast to an
increase of $35.6 billion in 2014. Profits of domestic financial corporations decreased $2.3 billion and
profits of domestic nonfinancial corporations decreased $32.6 billion. The rest-of-the-world component
of profits decreased $29.1 billion in 2015.

      For the year 2015, taxes on corporate income increased $15.9 billion, compared with an increase
of $45.0 billion in 2014. Profits after tax with IVA and CCAdj decreased $79.9 billion, compared with a
decrease of $9.4 billion. Dividends increased $28.5 billion, in contrast to a decrease of $64.0 billion.
Undistributed profits decreased $108.4 billion, in contrast to an increase of $54.6 billion.


Corporate profits with IVA

      Profits of domestic financial corporations decreased $24.0 billion in the fourth quarter, in
contrast to an increase of $2.5 billion in the third. Profits of domestic nonfinancial corporations
decreased $132.7 billion, compared with a decrease of $11.1 billion. The fourth-quarter decrease in
profits of nonfinancial corporations primarily reflected a decrease in manufacturing of nondurable
goods, specifically petroleum and coal products.

      For the year 2015, profits of domestic financial corporations increased $19.4 billion, in contrast
to a decrease of $0.2 billion in 2014. Profits of domestic nonfinancial corporations increased $146.8
billion in 2015, compared with an increase of $36.8 billion. The 2015 increase in profits of domestic
nonfinancial corporations was widespread across most industries. Notable offsets include decreases in
manufacturing of petroleum and coal products and in utilities.


Gross value added of nonfinancial domestic corporate business

      Real gross value added of nonfinancial corporations increased in the fourth quarter. Units profits
from current production (profits per unit of real gross value added) decreased, reflecting increases in unit
labor and nonlabor costs; unit prices were unchanged in the fourth quarter.

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                           Next release -- April 28, 2016 at 8:30 A.M. EDT for:
                     Gross Domestic Product:  First Quarter 2016 (Advance Estimate)