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National Income and Product Accounts
Gross Domestic Product, Third Quarter 2014 (Advance Estimate)
Gross Domestic Product, Third Quarter 2014 (Advance Estimate)
Real gross domestic product -- the value of the production of goods and services in the United States, adjusted for price changes -- increased at an annual rate of 3.5 percent in the third quarter of 2014, according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.6 percent. The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and "Comparisons of Revisions to GDP" on page 5). The "second" estimate for the third quarter, based on more complete data, will be released on November 25, 2014. The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending that were partly offset by a negative contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased. The deceleration in the percent change in real GDP reflected a downturn in private inventory investment and decelerations in PCE, in nonresidential fixed investment, in exports, in state and local government spending, and in residential fixed investment that were partly offset by a downturn in imports and an upturn in federal government spending. The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.3 percent in the third quarter, compared with an increase of 2.0 percent in the second. Excluding food and energy prices, the price index for gross domestic purchases increased 1.5 percent, compared with an increase of 1.7 percent. _________ 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 (2009) 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. _________ Real personal consumption expenditures increased 1.8 percent in the third quarter, compared with an increase of 2.5 percent in the second. Durable goods increased 7.2 percent, compared with an increase of 14.1 percent. Nondurable goods increased 1.1 percent, compared with an increase of 2.2 percent. Services increased 1.1 percent, compared with an increase of 0.9 percent. Real nonresidential fixed investment increased 5.5 percent in the third quarter, compared with an increase of 9.7 percent in the second. Investment in nonresidential structures increased 3.8 percent, compared with an increase of 12.6 percent. Investment in equipment increased 7.2 percent, compared with an increase of 11.2 percent. Investment in intellectual property products increased 4.2 percent, compared with an increase of 5.5 percent. Real residential fixed investment increased 1.8 percent, compared with an increase of 8.8 percent. Real exports of goods and services increased 7.8 percent in the third quarter, compared with an increase of 11.1 percent in the second. Real imports of goods and services decreased 1.7 percent, in contrast to an increase of 11.3 percent. Real federal government consumption expenditures and gross investment increased 10.0 percent in the third quarter, in contrast to a decrease of 0.9 percent in the second. National defense increased 16.0 percent, compared with an increase of 0.9 percent. Nondefense increased 0.5 percent, in contrast to a decrease of 3.8 percent. Real state and local government consumption expenditures and gross investment increased 1.3 percent, compared with an increase of 3.4 percent. The change in real private inventories subtracted 0.57 percentage point from the third-quarter change in real GDP after adding 1.42 percentage points to the second-quarter change. Private businesses increased inventories $62.8 billion in the third quarter, following increases of $84.8 billion in the second quarter and $35.2 billion in the first. Real final sales of domestic product -- GDP less change in private inventories -- increased 4.2 percent in the third quarter, compared with an increase of 3.2 percent in the second. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 2.1 percent in the third quarter, compared with an increase of 4.8 percent in the second. Disposition of personal income Current-dollar personal income increased $152.9 billion in the third quarter, compared with an increase of $223.0 billion in the second. The deceleration in personal income primarily reflected a deceleration in wages and salaries, a downturn in farm proprietorsí income, a deceleration in personal dividend income, and a downturn in personal interest income. Personal current taxes increased $26.4 billion in the third quarter, compared with an increase of $11.2 billion in the second. Disposable personal income increased $126.4 billion, or 4.0 percent, in the third quarter, compared with an increase of $211.8 billion, or 6.8 percent, in the second. Real disposable personal income increased 2.7 percent in the third quarter, compared with an increase of 4.4 percent in the second. Personal outlays increased $100.8 billion in the third quarter, compared with an increase of $142.7 billion in the second. Personal saving -- disposable personal income less personal outlays -- was $720.7 billion in the third quarter, compared with $695.1 billion in the second. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 5.5 percent in the third quarter, compared with 5.4 percent in the second. For a comparison of personal saving in BEA's national income and product accounts with personal saving in the Federal Reserve Board's financial accounts of the United States and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp. Current-dollar GDP Current-dollar GDP -- the market value of the production of goods and services in the United States -- increased 4.9 percent, or $207.2 billion, in the third quarter to a level of $17,535.4 billion. In the second quarter, current-dollar GDP increased 6.8 percent, or $284.2 billion. ________ BOX Information on the assumptions used for unavailable source data is provided in a technical note that is posted with the news release on BEA's Web site. Within a few days after the release, a detailed "Key Source Data and Assumptions" file is posted on the Web site. In the middle of each month, an analysis of the current quarterly estimate of GDP and related series is made available on the Web site; click on Survey of Current Business, "GDP and the Economy." For information on revisions, see "Revisions to GDP, GDI, and Their Major Components." ________ 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 -- November 25, 2014 at 8:30 A.M. EST for: Gross Domestic Product: Third Quarter 2014 (Second Estimate) Corporate Profits: Third Quarter 2014 (Preliminary Estimate) Release dates in 2015 Gross Domestic Product 2014: IV and 2014 annual 2015: I 2015: II 2015: III Advance.... January 30 April 29 July 30 October 29 Second..... February 27 May 29 August 27 November 24 Third...... March 27 June 24 September 25 December 22 Corporate Profits Preliminary... .. May 29 August 27 November 24 Revised....... March 27 June 24 September 25 December 22 Comparisons of Revisions to GDP Quarterly estimates of GDP are released on the following schedule: "Advance" estimates, based on source data that are incomplete or subject to further revision by the source agency, are released near the end of the first month following the end of the quarter; as more detailed and more comprehensive data become available, "second" and "third" estimates are released near the end of the second and third months, respectively. The "latest" estimates reflect the results of both annual and comprehensive revisions, which are typically released in late July. Annual revisions generally cover at least the 3 most recent calendar years (and the associated quarters) and incorporate newly available major annual source data. Comprehensive (or benchmark) revisions are carried out at about 5-year intervals and incorporate major periodic source data, as well as improvements in concepts and methods that update the accounts to portray more accurately the evolving U.S. economy. The table below presents the average revisions to the quarterly percent changes in real and current-dollar GDP for the different estimate vintages. From the advance estimate to the second estimate (1 month later), the average revision to real GDP growth without regard to sign is 0.5 percentage point, while from the advance estimate to the third estimate (2 months later), it is 0.6 percentage point. From the advance estimate to the latest estimate, the average revision without regard to sign is 1.2 percentage points. Larger average revisions for the latest estimates reflect the fact that comprehensive revisions include major improvements to the accounts, such as the incorporation of BEA's latest benchmark input-output accounts. The quarterly estimates correctly indicate the direction of change in real GDP 96 percent of the time, correctly indicate whether GDP is accelerating or decelerating about 75 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend growth about 83 percent of the time. Revisions Between Quarterly Percent Changes of GDP: Vintage Comparisons [Annual rates] Vintages Average Average without Standard deviation of compared regard to sign revisions without regard to sign ________________________________________________________Real GDP_____________________________________________________ Advance to second.................... 0.1 0.5 0.4 Advance to third..................... 0.1 0.6 0.4 Second to third...................... 0.0 0.2 0.2 Advance to latest.................... -0.1 1.2 1.0 ____________________________________________________Current-dollar GDP_______________________________________________ Advance to second.................... 0.2 0.5 0.4 Advance to third..................... 0.2 0.6 0.4 Second to third...................... 0.1 0.3 0.2 Advance to latest.................... 0.1 1.3 1.0 _____________________________________________________________________________________________________________________ NOTE. These comparisons are based on the period from 1993 through 2013.