EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Tuesday, June 28, 2016
BEA 16—32


* 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: (301) 278-9083 (GDP) gdpniwd@bea.gov
Kate Pinard: (301) 278-9417 (Corporate Profits) cpniwd@bea.gov
Jeannine Aversa: (301) 278-9003 (News Media) Jeannine.aversa@bea.gov
National Income and Product Accounts
Gross Domestic Product: First Quarter 2016 (Third Estimate)
Corporate Profits: First Quarter 2016 (Revised Estimate)
Real gross domestic product -- the value of the goods and services produced by the nations economy
less the value of the goods and services used up in production, adjusted for price changes -- increased at
an annual rate of 1.1 percent in the first quarter of 2016, according to the "third" estimate released by
the Bureau of Economic Analysis.  In the fourth quarter of 2015, real GDP increased 1.4 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 0.8 percent.
With the third estimate for the first quarter, the general picture of economic growth remains the same;
exports increased more than previously estimated (see "Revisions" on page 2).

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

The deceleration in real GDP in the first quarter primarily reflected a deceleration in PCE, a larger
decrease in nonresidential fixed investment, and a downturn in federal government spending that were
partly offset by upturns in state and local government spending and exports and an acceleration in
residential fixed investment.

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 2.9 percent in
the first quarter, compared with an increase of 1.9 percent in the fourth.  The average of real GDP and
real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased
2.0 percent in the first quarter, compared with an increase of 1.7 percent in the fourth.


BOX._____

            Upcoming Annual Revision of the National Income and Product Accounts

The annual revision of the national income and product accounts, covering the first
quarter of 2013 through the first quarter of 2016, will be released along with the "advance"
estimate of GDP for the second quarter of 2016 on July 29.  For more information, see Preview
of the Upcoming Annual NIPA Revision included in the May Survey of Current Business article
on GDP and the Economy.
_________

NOTE.  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 0.9 percent in the first quarter, compared with an increase of 1.5 percent in the fourth.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased
0.2 percent in the first quarter, compared with an increase of 0.4 percent in the fourth.  Excluding food
and energy prices, the price index for gross domestic purchases increased 1.4 percent, compared with
an increase of 1.0 percent.

Current-dollar GDP -- the market value of the goods and services produced by the nations economy less
the value of the goods and services used up in production -- increased 1.4 percent, or $65.3 billion, in
the first quarter to a level of $18,230.1 billion.  In the fourth quarter, current-dollar GDP increased 2.3
percent, or $104.6 billion.


Revisions

The upward revision to the percent change in real GDP primarily reflected upward revisions to exports
and to nonresidential fixed investment that were partly offset by a downward revision to PCE. 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...............................            0.5                 0.8                 1.1
Current-dollar GDP.....................            1.2                 1.4                 1.4
Real GDI...............................             --                 2.2                 2.9
Average of Real GDP and Real GDI.......             --                 1.5                 2.0
Gross domestic purchases price index...            0.3                 0.2                 0.2



                                               Corporate Profits

Profits from current production

Profits from current production (corporate profits with inventory valuation adjustment [IVA] and capital
consumption adjustment [CCAdj]) increased $34.7 billion in the first quarter, in contrast to a decrease of
$159.6 billion in the fourth.

Profits of domestic financial corporations decreased $11.3 billion in the first quarter, compared with a
decrease of $24.0 billion in the fourth.  Profits of domestic nonfinancial corporations increased $72.9
billion, in contrast to a decrease of $129.2 billion.  The rest-of-the-world component of profits
decreased $26.9 billion, compared with a decrease of $6.5 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
first quarter, receipts increased $8.7 billion, and payments increased $35.6 billion.

Taxes on corporate income increased $4.4 billion in the first quarter, in contrast to a decrease of $32.2
billion in the fourth.  Profits after tax with IVA and CCAdj increased $30.3 billion, in contrast to a
decrease of $127.4 billion.

Dividends increased $8.2 billion in the first quarter, in contrast to a decrease of $15.1 billion in the
fourth.  Undistributed profits increased $22.1 billion, in contrast to a decrease of $112.2 billion.  Net
cash flow with IVA -- the internal funds available to corporations for investment -- increased $33.6
billion, in contrast to a decrease of $101.6 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 decreased $21.6 billion in the first quarter, in contrast
to an increase of $13.3 billion in the fourth.   The CCAdj decreased $3.0 billion, compared with an
increase of $3.6 billion.

Corporate profits with IVA

Profits of domestic financial corporations decreased $10.7 billion in the first quarter, compared with a
decrease of $24.0 billion in the fourth. Profits of domestic nonfinancial corporations increased $75.3
billion, in contrast to a decrease of $132.7 billion. The first-quarter increase in profits of nonfinancial
corporations primarily reflected an increase in manufacturing of nondurable goods, specifically
petroleum and coal products.

Gross value added of nonfinancial domestic corporate business

Real gross value added of nonfinancial corporations increased in the first quarter.  Unit profits from
current production (profits per unit of real gross value added) increased reflecting decreases in unit
labor and nonlabor costs that were partly offset by a decrease in unit prices.

                                       *          *          *

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 -- July 29, 2016 at 8:30 A.M. EDT for:
              Gross Domestic Product:  Second Quarter 2016  (Advance Estimate)
                      Annual Revision:  2013 through First Quarter 2016