EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, WEDNESDAY, APRIL 30, 2008
Gross Domestic Product, First Quarter 2008 (advance)
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 0.6 percent in the first quarter of 2008, according to advance estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP also increased 0.6 percent. The Bureau emphasized that the first-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The first- quarter "preliminary" estimates, based on more comprehensive data, will be released on May 29, 2008. The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE) for services, private inventory investment, exports of goods and services, and federal government spending 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, increased. The increase in real GDP is the same as in the fourth quarter, reflecting an upturn in inventory investment that was offset by an upturn in imports, and downturns in nonresidential structures, in PCE for durable goods, and in PCE for nondurable goods. Final sales of computers contributed 0.12 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 0.30 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, compared with an increase of 3.7 percent in the fourth. 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. Durable goods decreased 6.1 percent, in contrast to an increase of 2.0 percent. Nondurable goods decreased 1.3 percent, in contrast to an increase of 1.2 percent. Services increased 3.4 percent, compared with an increase of 2.8 percent. Real nonresidential fixed investment decreased 2.5 percent in the first quarter, in contrast to an increase of 6.0 percent in the fourth. Nonresidential structures decreased 6.2 percent, in contrast to an increase of 12.4 percent. Equipment and software decreased 0.7 percent, in contrast to an increase of 3.1 percent. Real residential fixed investment decreased 26.7 percent, compared with a decrease of 25.2 percent. Real exports of goods and services increased 5.5 percent in the first quarter, compared with an increase of 6.5 percent in the fourth. Real imports of goods and services increased 2.5 percent, in contrast to a decrease of 1.4 percent. Real federal government consumption expenditures and gross investment increased 4.6 percent in the first quarter, compared with an increase of 0.5 percent in the fourth. National defense increased 6.0 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 0.5 percent, compared with an increase of 2.8 percent. The real change in private inventories added 0.81 percentage point to the first-quarter change in real GDP after subtracting 1.79 percentage points from the fourth-quarter change. Private businesses increased inventories $1.8 billion in the first quarter, following a decrease of $18.3 billion in the fourth and an increase of $30.6 billion in the third. Real final sales of domestic product -- GDP less change in private inventories -- decreased 0.2 percent in the first quarter, in contrast to 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 0.4 percent in the first quarter, in contrast to a decrease of 0.4 percent in the fourth. Disposition of personal income Current-dollar personal income increased $129.6 billion (4.4 percent) in the first quarter, compared with an increase of $121.6 billion (4.2 percent) in the fourth. Personal current taxes increased $2.3 billion in the first quarter, compared with an increase of $18.2 billion in the fourth. Disposable personal income increased $127.3 billion (5.0 percent) in the first quarter, compared with an increase of $103.4 billion (4.1 percent) in the fourth. Real disposable personal income increased 1.4 percent, compared with an increase of 0.1 percent. Personal outlays increased $106.8 billion (4.2 percent) in the first quarter, compared with an increase of $148.0 billion (5.9 percent) in the fourth. Personal saving -- disposable personal income less personal outlays -- was $20.2 billion in the first quarter, in contrast to a negative $0.3 billion in the fourth. The personal saving rate -- saving as a percentage of disposable personal income -- was 0.2 percent in the first quarter; in the fourth quarter, the personal saving rate was 0.0 percent. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods. For more information, see the FAQs on "Personal Saving" on BEA's Web site. For a comparison of personal saving in BEA's national income and product accounts with personal saving in the Federal Reserve Board's flow of funds accounts and data on changes in net worth (which helps finance negative saving), go to /bea/dn/nipaweb/Nipa-Frb.asp. Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 3.2 percent, or $111.0 billion, in the first quarter to a level of $14,185.2 billion. In the fourth quarter, current-dollar GDP increased 3.0 percent, or $103.7 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 estimates of GDP and related series is made available on the Web site; click on Survey of Current Business, "GDP and the Economy." * * * 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 -- May 29, 2008, at 8:30 A.M. EDT for: Gross Domestic Product: First Quarter 2008 (Preliminary) Corporate Profits: First Quarter 2008 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 after the end of the quarter; as more detailed and more comprehensive data become available, "preliminary" and "final" 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. Annual revisions, which cover the quarters of the 3 most recent calendar years, are usually carried out each summer 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 current-dollar and real GDP for the different vintages of the estimates. From the advance estimate to the preliminary 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 final 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. 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 preliminary or to the final estimates. The larger average revisions to the latest estimate reflect the fact that comprehensive revisions include major improvements such as the introduction of chain indexes and the capitalization of software. The current quarterly estimates correctly indicate the direction of change of real GDP 98 percent of the time, correctly indicate whether it is accelerating or decelerating 74 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend growth more than three-fifths 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 Current-dollar GDP Advance to preliminary.......... 0.2 0.5 0.4 Advance to final................ .2 .7 .4 Preliminary to final............ .0 .3 .2 Advance to latest............... .4 1.1 .9 Real GDP Advance to preliminary.......... 0.1 0.5 0.4 Advance to final................ .1 .6 .4 Preliminary to final............ .0 .3 .2 Advance to latest............... .3 1.2 1.0 NOTE.--These comparisons are based on the period from 1983 through 2004.