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 0.9 percent in the first quarter of 2008,
according to preliminary estimates released by the Bureau of Economic Analysis.  In the fourth quarter,
real GDP increased 0.6 percent.

 	The GDP estimates released today are based on more complete source data than were available for
the advance estimates issued last month.  In the advance estimates, the increase in real GDP was 0.6
percent (see "Revisions" on page 3).

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

	The small acceleration in real GDP primarily reflected an upturn in inventory investment that was
partly offset by a deceleration in PCE.

	Final sales of computers contributed 0.06 percentage point to the first-quarter growth in real GDP
after contributing 0.16 percentage point to the fourth-quarter growth.  Motor vehicle output subtracted
0.35 percentage point from the first-quarter growth in real GDP after subtracting 0.86 percentage point
from the fourth-quarter growth.



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 (2000)
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 3.5 percent in the first quarter, the same as in the advance estimate; this index increased  3.7
percent in the fourth quarter.  Excluding food and energy prices, the price index for gross domestic
purchases increased 2.2 percent in the first quarter, compared with an increase of 2.3 percent in the
fourth.  About 0.3 percentage point of the first-quarter increase in the index was accounted for by the
pay raise for federal civilian and military personnel, which is treated as an increase in the prices of
employee services purchased by the federal government.

	Real personal consumption expenditures increased 1.0 percent in the first quarter, compared with
an increase of 2.3 percent in the fourth.  Real nonresidential fixed investment decreased 0.2 percent, in
contrast to an increase of 6.0 percent.  Nonresidential structures increased 1.1 percent, compared with an
increase of 12.4 percent.  Equipment and software decreased 0.9 percent, in contrast to an increase of 3.1
percent.  Real residential fixed investment decreased 25.5 percent, compared with a decrease of 25.2
percent.

	Real exports of goods and services increased 2.8 percent in the first quarter, compared with an
increase of 6.5 percent in the fourth.  Real imports of goods and services decreased 2.6 percent,
compared with a decrease of 1.4 percent.

	Real federal government consumption expenditures and gross investment increased 4.4 percent in
the first quarter, compared with an increase of 0.5 percent in the fourth.  National defense increased 5.6
percent, in contrast to a decrease of 0.5 percent.  Nondefense increased 1.8 percent, compared with an
increase of 2.8 percent.  Real state and local government consumption expenditures and gross
investment increased 0.6 percent, compared with an increase of 2.8 percent.

	The real change in private inventories added 0.21 percentage point to the first-quarter change in
real GDP, after subtracting 1.79 percentage points from the fourth-quarter change.  Private businesses
decreased inventories $14.4 billion in the first quarter, following a decrease of $18.3 billion in the fourth
quarter and an increase of $30.6 billion in the third.

	Real final sales of domestic product -- GDP less change in private inventories -- increased 0.7
percent in the first quarter, compared with an increase of 2.4 percent in the fourth.


Gross domestic purchases

	Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 0.1 percent in the first quarter, in contrast to a decrease of 0.4 percent in the
fourth.


Gross national product

	Real gross national product -- the goods and services produced by the labor and property supplied
by U.S. residents -- increased 1.1 percent in the first quarter, compared with an increase of 1.9 percent in
the fourth.  GNP includes, and GDP excludes, net receipts of income from the rest of the world, which
increased $5.3 billion in the first quarter after increasing $37.6 billion in the fourth; in the first quarter,
receipts decreased $48.1 billion, and payments decreased $53.4 billion.


Current-dollar GDP

	Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
3.5 percent, or $121.4 billion, in the first quarter to a level of $14,195.6 billion.  In the fourth quarter,
current-dollar GDP increased 3.0 percent, or $103.7 billion.


Revisions

        The preliminary estimate of the first-quarter increase in real GDP is 0.3 percentage point, or $8.8
billion, higher than the advance estimate issued last month.  The upward revision to the percent change
in real GDP primarily reflected a downward revision to imports and upward revisions to nonresidential
structures and to PCE for nondurable goods that were partly offset by downward revisions to private
inventory investment, to exports, and to PCE for services.


							Advance		Preliminary
						(Percent change from preceding quarter)

Real GDP...............................                  0.6                 0.9
Current-dollar GDP.....................                  3.2                 3.5
Gross domestic purchases price index...                  3.5                 3.5



Corporate Profits

	Profits from current production (corporate profits with inventory valuation and capital
consumption adjustments) increased $5.2 billion in the first quarter, in contrast to a decrease of $52.9
billion in the fourth quarter.  Current-production cash flow (net cash flow with inventory valuation and
capital consumption adjustments) -- the internal funds available to corporations for investment --
increased $29.6 billion in the first quarter, in contrast to a decrease of $55.7 billion in the fourth.

	Taxes on corporate income decreased $36.9 billion in the first quarter, compared with a decrease
of $15.0 billion in the fourth.  Profits after tax with inventory valuation and capital consumption
adjustments increased $42.0 billion in the first quarter, in contrast to a decrease of $37.9 billion in the
fourth.  Dividends increased $17.0 billion, compared with an increase of $21.7 billion; current-
production undistributed profits increased $25.0 billion, in contrast to a decrease of $59.5 billion.

	Domestic profits of financial corporations decreased $3.0 billion in the first quarter, compared
with a decrease of $74.4 billion in the fourth.  Domestic profits of nonfinancial corporations increased
$3.2 billion, in contrast to a decrease of $34.3 billion.  In the first quarter, real gross corporate value
added increased.  Profits per unit of real value added were unchanged, reflecting an increase in unit
prices and a decrease in unit nonlabor costs that were offset by an increase in unit labor costs.

	The rest-of-the-world component of profits increased $5.0 billion in the first quarter, compared
with an increase of $55.8 billion in the fourth.  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 first-quarter
increase reflected a larger increase in receipts than in payments.

	Profits before tax decreased $133.3 billion in the first quarter, in contrast to an increase of $0.2
billion in the fourth (see "Provisions of the Economic Stimulus Act of 2008" below).  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 increased $167.7 billion in
the first quarter (from -$241.5 billion to -$73.8 billion), in contrast to a decrease of $4.1 billion in
the fourth.  The inventory valuation adjustment decreased $29.3 billion (from -$69.4 billion to -$98.7
billion), compared with a decrease of $49.1 billion.


Provisions of the Economic Stimulus Act of 2008

	The Economic Stimulus Act of 2008 provided for a first-year bonus depreciation of 50 percent for
qualifying property purchased and put in place in 2008.  The law also raised the ceiling for small
business expensing under Internal Revenue Code Section 179 from $128,000 to $250,000.

	Profits from current production are not affected because they do not depend on the depreciation-
accounting practices used for federal income tax returns; rather, they are based on depreciation of fixed
assets valued at current cost and using consistent depreciation profiles based on used-asset prices.  The
additional depreciation provided for by the 2008 Act is estimated to have increased tax-based
depreciation expenses in the first quarter by $139.7 billion (annual rate) and reduced profits before tax,
which is based on earnings reported on tax returns, by the same amount.  The capital consumption
adjustment, which is the difference between the depreciation specified in the tax code and the
depreciation underlying profits from current production, also increased by the same amount because the
Act raised tax depreciation by $139.7 billion.  (First-quarter profits tax liability was reduced by $37.8
billion, and profits after tax were reduced by $102.0 billion.)

	As with corporate profits from current production, the effects of the provisions of the Act on
nonfarm proprietors' income with capital consumption and inventory valuation adjustments (table 10)
were offsetting; nonfarm proprietors' income without these adjustments was reduced, and the related
capital consumption adjustment was increased by the same amount.  The other major national income
and product account components and aggregates shown in this release were not affected.

                                          *          *          *

     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
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                                          *          *          *

                          Next release -- June 26, 2008, at 8:30 A.M. EDT for:
                          Gross Domestic Product:  First Quarter 2008 (Final)
                          Corporate Profits:  First Quarter 2008 (Final)