EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Thursday, July 30, 2015
BEA 15—35


* 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
Jeannine Aversa: (202) 606-2649 (News Media)  
Nicole Mayerhauser: (202) 606-9715 (Revision)  
Brent Moulton: (202) 606-9606  
National Income and Product Accounts
Gross Domestic Product: Second Quarter 2015 (Advance Estimate); Includes Historical Revisions
      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 2.3 percent in the second quarter of
2015, according to the "advance" estimate released by the Bureau of Economic Analysis.  In the first
quarter, real GDP increased 0.6 percent (revised).

      The Bureau emphasized that the second-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 10).  The "second" estimate for the second quarter,
based on more complete data, will be released on August 27, 2015.

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

_____Box.

                     Annual Revision of the National Income and Product Accounts

      The estimates released today reflect the results of the annual revision of the national income and
product accounts (NIPAs) in conjunction with the "advance" estimate of GDP for the second quarter of
2015.  In addition to the regular revision of the estimates for the most recent 3 years and for the first
quarter of 2015, some series are revised back further (see the Technical Note).  More information is
available in "Preview of the 2015 Annual Revision of the NIPAs" in the June Survey of Current Business
and on BEA's Web site. The August Survey will contain an article that describes the results.
_____

_____NOTE.  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.
_____

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

      The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.4 percent in the second quarter, in contrast to a decrease of 1.6 percent in the first.
Excluding food and energy prices, the price index for gross domestic purchases increased 1.1 percent,
compared with an increase of 0.2 percent.

      Real personal consumption expenditures increased 2.9 percent in the second quarter, compared
with an increase of 1.8 percent in the first.  Durable goods increased 7.3 percent, compared with an
increase of 2.0 percent.  Nondurable goods increased 3.6 percent, compared with an increase of 0.7
percent.  Services increased 2.1 percent, the same increase as in the first quarter.

      Real nonresidential fixed investment decreased 0.6 percent in the second quarter, in contrast to
an increase of 1.6 percent in the first.  Investment in nonresidential structures decreased 1.6 percent,
compared with a decrease of 7.4 percent.  Investment in equipment decreased 4.1 percent, in contrast to
an increase of 2.3 percent.  Investment in intellectual property products increased 5.5 percent, compared
with an increase of 7.4 percent.  Real residential fixed investment increased 6.6 percent, compared with
an increase of 10.1 percent.

      Real exports of goods and services increased 5.3 percent in the second quarter, in contrast to a
decrease of 6.0 percent in the first.  Real imports of goods and services increased 3.5 percent, compared
with an increase of 7.1 percent.

      Real federal government consumption expenditures and gross investment decreased 1.1 percent
in the second quarter, in contrast to an increase of 1.1 percent in the first.  National defense decreased
1.5 percent, in contrast to an increase of 1.0 percent.  Nondefense decreased 0.5 percent, in contrast to an
increase of 1.2 percent.  Real state and local government consumption expenditures and gross
investment increased 2.0 percent, in contrast to a decrease of 0.8 percent.

      The change in real private inventories subtracted 0.08 percentage point from the second-quarter
change in real GDP after adding 0.87 percentage point to the first-quarter change.  Private businesses
increased inventories $110.0 billion in the second quarter, following increases of $112.8 billion in the
first quarter and $78.2 billion in the fourth.

      Real final sales of domestic product -- GDP less change in private inventories -- increased 2.4
percent in the second quarter, in contrast to a decrease of 0.2 percent in the first.


Gross domestic purchases

      Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 2.1 percent in the second quarter, compared with an increase of 2.5 percent in the
first.


Disposition of personal income

      Current-dollar personal income increased $145.0 billion in the second quarter, compared with an
increase of $118.9 billion in the first.  The acceleration in personal income primarily reflected upturns in
personal interest income and in farm proprietors' income that were partly offset by decelerations in
government social benefits and in personal dividend income.

      Personal current taxes increased $26.3 billion in the second quarter, compared with an increase
of $60.2 billion in the first.

      Disposable personal income increased $118.6 billion, or 3.7 percent, in the second quarter,
compared with an increase of $58.7 billion, or 1.8 percent, in the first.  Real disposable personal income
increased 1.5 percent, compared with an increase of 3.8 percent.

      Personal outlays increased $161.9 billion in the second quarter, in contrast to a decrease of $10.3
billion in the first.

      Personal saving -- disposable personal income less personal outlays -- was $640.1 billion in the
second quarter, compared with $683.3 billion in the first.

      The personal saving rate -- personal saving as a percentage of disposable personal income -- was
4.8 percent in the second quarter, compared with 5.2 percent in the first.  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 4.4 percent, or $191.2 billion, in the second quarter to a level of $17,840.5 billion.  In
the first quarter, current-dollar GDP increased 0.8 percent, or $33.3 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".


Revisions for the first quarter of 2015

      For the first quarter of 2015, real GDP is now estimated to have increased 0.6 percent; in the
previously published estimates, first-quarter GDP was estimated to have decreased 0.2 percent. The 0.8-
percentage point upward revision to the percent change in first-quarter real GDP primarily reflected
upward revisions to nonresidential fixed investment, to private inventory investment, to residential fixed
investment, and to federal government spending that were partly offset by a downward revision to PCE.


                                             Previous Estimate                    Revised

Real GDP...............................            -0.2                             0.6
Current-dollar GDP.....................            -0.2                             0.8
Real GDI...............................             1.9                             0.3
Gross domestic purchases price index...            -1.6                            -1.6


      A new aggregate, the average of GDP and GDI, is a supplemental measure of U.S. economic
activity.  In real, or inflation-adjusted, terms this measure increased 0.5 percent in the first quarter of
2015; estimates for the second quarter will be available next month along with the estimate of second-
quarter GDI.


                       Annual Revision of the National Income and Product Accounts


      The revised estimates reflect the results of the annual revision of the national income and product
accounts (NIPAs).  These revisions, usually made each July, incorporate newly available and more
comprehensive source data, as well as improved estimation methodologies.  For this annual revision, the
notable revisions primarily reflect the incorporation of newly available and revised source data.

      The timespan of the revisions is the first quarter of 2012 through the first quarter of 2015 with
two exceptions.  First, a new treatment of federal refundable tax credits revised some series, including
personal income, personal current taxes, government current receipts, and government current
expenditures, back to 1976.  Second, an updated presentation of the transfer and tax flows between the
United States and the rest of the world resulted in revisions to the foreign transactions estimates back to
1999.  The reference year remains 2009.  None of the changes affected the current reference year for
price and quantity measures; revisions to GDP and its components are limited to 2012 and later.

      Because of the additional data shown, tables 3, 11, and 12 of this release are each divided into
two separate tables -- 3A and 3B, 11A and 11B, and 12A and 12B.  There are also a number of special
tables that compare the revised and previously published statistics for select periods:

*	Table 1A shows the percent change in real GDP and related measures and table 1B shows
        revisions to current-dollar GDP, to national income, and to personal income.

*	Table 2A shows contributions to the percent change in real GDP.

*	Table 4A shows the percent change in the chain-type price indexes for GDP and related
        measures.

*	Table 12C shows revisions to corporate profits by industry.

      With the release of the annual revision, statistics for select NIPA tables will be available on
BEA's Web site.  Shortly after the GDP release, BEA will post a table on its Web site
showing the major current-dollar revisions and their sources for each component of GDP, national
income, and personal income.  Additionally, the August 2015 Survey of Current Business will contain an
article describing these revisions.


Revisions to real GDP

      The revisions largely reflect the incorporation of newly available and revised source data (see the
box below) and improvements to estimating methodologies.

*	From 2011 to 2014, real GDP increased at an average annual rate of 2.0 percent; in the
        previously published estimates, real GDP had increased at an average annual rate of 2.3 percent.
        From the fourth quarter of 2011 to the first quarter of 2015, real GDP increased at an average
        annual rate of 2.0 percent; in the previously published estimates, real GDP had increased at an
        average annual rate of 2.2 percent during this period.

*	The percent change in real GDP was revised down 0.1 percentage point for 2012, was revised
        down 0.7 percentage point for 2013, and was unrevised for 2014.

   o    For 2012, downward revisions to personal consumption expenditures (PCE) and to state
        and local government spending were partly offset by an upward revision to nonresidential
        fixed investment.
   o    For 2013, the largest contributors to the downward revision were downward revisions to
        PCE, to state and local government spending, and to residential fixed investment.
   o    For 2014, an upward revision to PCE was offset by downward revisions to state and local
        government spending, to federal government spending, and to inventory investment.

*	The revisions to the annual estimates typically reflect partly offsetting revisions to the quarters
within the year.

   o   For 2012, the annual rate of change in GDP was revised down 2.0 percentage points for
       the third quarter, while the rate of change for the first and second quarters were revised
       up 0.4 percentage point and 0.3 percentage point, respectively; the growth rate for the
       fourth quarter was unrevised.
   o   For 2013, downward revisions of 0.8 percentage point for the first quarter, 0.7 percentage
       point for the second quarter, and 1.5 percentage points for the third quarter were partly
       offset by an upward revision of 0.3 percentage point for the fourth quarter.
   o   For 2014, an upward revision of 1.2 percentage points for the first quarter was offset by
       downward revisions of 0.7 percentage point for the third quarter and 0.1 percentage point
       for the fourth quarter; the second quarter was unrevised.

*	For the first quarter of 2012 through the first quarter of 2015, the average revision (without
        regard to sign) to the percent change in real GDP was 0.7 percentage point.  The revisions
        changed the direction of growth in real GDP for only one of the quarters: the first quarter of
        2015.

*	For the expansion from the second quarter of 2009 to the first quarter of 2015, real GDP
        increased at an average annual rate of 2.1 percent, 0.1 percentage point less than in the
        previously published estimates.

*	Current-dollar GDP was revised down for all 3 years:  $7.9 billion, or less than 0.1 percent, for
        2012; $104.9 billion, or 0.6 percent, for 2013; and $70.9 billion, or 0.4 percent, for 2014.


Gross domestic income (GDI) and the statistical discrepancy

*	From 2011 to 2014, real GDI increased at an average annual rate of 2.4 percent; in the previously
        published estimates, real GDI had increased at an average annual rate of 2.6 percent.  From the
        fourth quarter of 2011 to the first quarter of 2015, real GDI increased at an average annual rate of
        2.3 percent; in the previously published estimates, real GDI had increased at an average annual
        rate of 2.7 percent.

*	The statistical discrepancy is current-dollar GDP less current-dollar GDI.  GDP measures final
        expenditures -- the sum of consumer spending, private investment, net exports, and government
        spending.  GDI measures the incomes earned in the production of GDP.  In concept, GDP is
        equal to GDI.  In practice, they differ because they are estimated using different source data and
        different methods.

*	As a result of the annual revision, the statistical discrepancy as a percentage of GDP was
        unrevised (-1.3 percent) for 2012, was revised up from -1.3 percent to -1.1 percent for 2013, and
        was revised down from -1.0 percent to -1.2 percent for 2014.

*	The average of GDP and GDI is a supplemental measure of U.S. economic activity.  In real, or
        inflation-adjusted, terms this measure increased at an average annual rate of 2.2 percent from
        2011 to 2014.

Revisions to price measures

*	Gross domestic purchases -- From the fourth quarter of 2011 to the first quarter of 2015, the
        average annual rate of increase in the price index for gross domestic purchases was revised up
        from 1.1 percent to 1.2 percent.

*	Personal consumption expenditures -- From the fourth quarter of 2011 to the first quarter of
        2015, the average annual rate of increase in the price index for PCE was 1.1 percent, 0.1
        percentage point higher than in the previously published estimates; the increase in the "core"
        PCE price index (which excludes food and energy) was also revised up 0.1 percentage point,
        from 1.4 percent to 1.5 percent.


Revisions to income and saving measures

*	National income was revised down $7.6 billion, or 0.1 percent, for 2012, was revised down
        $118.7 billion, or 0.8 percent, for 2013, and was unrevised for 2014.

   o    For 2012, downward revisions to corporate profits and to proprietors' income were partly
        offset by an upward revision to net interest.
   o    For 2013, downward revisions to corporate profits, to proprietors' income, and to rental
        income of persons were partly offset by upward revisions to taxes on production and
        imports, to net interest, and to current surplus of government enterprises.
   o    For 2014, offsetting revisions of note include downward revisions to proprietors' income,
        to rental income of persons, and to corporate profits and upward revisions to net interest,
        to wages and salaries, and to current surplus of government enterprises.

*	Corporate profits was revised down $24.6 billion, or 1.2 percent, for 2012, was revised down
        $69.5 billion, or 3.3 percent, for 2013, and was revised down $16.9 billion, or 0.8 percent, for
        2014.

*	Personal income was revised up $27.4 billion, or 0.2 percent, for 2012, was revised down $98.5
        billion, or 0.7 percent, for 2013, and was revised down $39.7 billion, or 0.3 percent, for 2014.

*	From 2011 to 2014, the average annual rate of growth of real disposable personal income was
        revised down 0.3 percentage point from 1.8 percent to 1.5 percent.

*	The personal saving rate (personal saving as a percentage of disposable personal income) was
        revised up from 7.2 percent to 7.6 percent for 2012, was revised down from 4.9 percent to 4.8
        percent for 2013, and was revised down from 4.9 percent to 4.8 percent for 2014.


New and revised source data

      This annual revision incorporated data from the following major federal statistical sources:


Agency                        Data                                                 Years Covered and Vintage

Census Bureau                 Annual survey of wholesale trade                     2012 (revised) and 2013 (new)

                              Annual survey of retail trade                        2012 (revised) and 2013 (new)

                              Annual survey of manufactures                        2013 (new)

                              Economic census                                      2012 (new)

                              Monthly surveys of manufactures, merchant
                              wholesale trade, and retail trade                    2012-2014 (revised)

                              Service annual survey                                2012 and 2013 (revised), 2014 (new)

                              Annual surveys of state and                          Fiscal years 2012 (revised)
                              local government finances                            and 2013 (new)

                              Monthly survey of construction spending
                              (value put in place)                                 2013 and 2014 (revised)

                              Quarterly services survey                            2012-2014 (revised)

                              Current population survey/housing vacancy survey     2012 and 2013 (revised), 2014 (new)

Office of Management          Federal Budget                                       Fiscal years 2014 and 2015
and Budget

Internal Revenue Service      Tabulations of tax returns for corporations          2012 (revised) and 2013 (new)

                              Tabulations of tax returns for sole                  2012 (revised) and 2013 (new)
                              proprietorships and partnerships

BLS                           Quarterly census of employment and wages             2012-2014 ( revised)

Department of Agriculture     Farm statistics                                      2012-2014 (revised)

BEA                           International transactions accounts                  2012-2014 (revised)



Changes in methodology and presentation

      The annual revision also incorporated improvements to estimating methodologies and to the
presentation of the NIPA estimates, including the following:

*	Two new statistics that facilitate the analysis of macroeconomic trends in the U.S. economy are
        now presented in BEA's current quarterly GDP news release and data tables. "The average of
        GDP and GDI" provides a supplemental measure of U.S. production that reflects timing and
        measurement variations between GDP and GDI. "Final sales to private domestic purchasers"
        provides a measure of private demand in the U.S. economy. It reflects consumer spending and
        investment spending by private businesses and excludes spending by governments, net exports,
        and private inventory investment.

*	BEA introduced new seasonal adjustments and refinements to existing seasonal adjustment
        methods for a number of GDP and GDI components, including federal defense spending,
        consumer spending on services, net interest, and corporate profits.

*	BEA used Bureau of Labor Statistics producer price indexes for portfolio management services,
        for investment advice services, and for commercial bank trust services to deflate consumer
        spending on these financial services. These new price indexes replaced the use of input cost
        indexes and better reflect the prices charged by providers of these financial services.

*	BEA reclassified federal government refundable tax credits as government social benefits and no
        longer records the portion of these tax credits that reduce a person's tax liability as reductions in
        the income taxes paid by persons. This new treatment allows users to see the full costs and
        benefits of these tax policies to the government and to recipients. This reclassification had
        offsetting impacts to personal income and to personal current taxes beginning with 1976; the
        personal saving rate was not impacted by this change.

*	For more information about these changes, see "Preview of the 2015 Annual Revision of the NIPAs"
	in the June Survey of Current Business.


                                            *          *          *


      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 -- August 27, 2015 at 8:30 A.M. EDT for:
                         Gross Domestic Product:  Second Quarter 2015 (Second Estimate)
                         Corporate Profits:  Second Quarter 2015 (Preliminary Estimate)


                                       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, the "second" and "third" estimates are released near the end of the second and
third months, respectively. The "latest"” estimate reflects the results of both annual and comprehensive
revisions, which are typically released in late July.

     Annual revisions, cover at a minimum the quarters of the 3 most recent calendar years, 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 shows comparisons of the revisions between quarterly percent changes of real and current-
dollar GDP for the different vintages of the estimates.  From the advance estimate to the second estimate
(one month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while
from the advance estimate to the third estimate (two 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, such as the incorporation of BEA’s latest benchmark input-output accounts.  The average revision
(with regard to sign) from the advance estimate to the latest estimate is 0.3 percentage point, which is
larger than the average revisions from the advance estimate to the second or to the third estimates.  The
larger average revisions to the   The quarterly estimates correctly indicate the direction of change of 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.....................                .1                  .6                   .4
Second to third......................                .0                  .2                   .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.....................                .2                  .6                   .4
Second to third......................                .1                  .3                   .2
Advance to latest....................                .1                 1.3                  1.0

_____________________________________________________________________________________________________________________
 NOTE.  These comparisons are based on the period from 1993 through 2013.