News Release
These data have been superseded. Please see our latest releases for current estimates and contact information.
Gross Domestic Product, 4th quarter and annual 2012 (third estimate); Corporate Profits, 4th quarter and annual 2012
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 0.4 percent in the fourth quarter of 2012
(that is, from the third quarter to the fourth quarter), according to the "third" estimate released by the
Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 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, real GDP increased 0.1 percent. While
nonresidential fixed investment is higher than previously estimated, the revision to GDP has not
changed the general picture of the economy (for more information, see "Revisions" on page 3).
The increase in real GDP in the fourth quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed
investment that were partly offset by negative contributions from private inventory investment, federal
government spending, exports, and state and local government spending. Imports, which are a
subtraction in the calculation of GDP, decreased.
The deceleration in real GDP in the fourth quarter primarily reflected downturns in private
inventory investment, in federal government spending, in exports, and in state and local government
spending that were partly offset by an upturn in nonresidential fixed investment, a larger decrease in
imports, and an acceleration in PCE.
Motor vehicle output added 0.18 percentage point to the fourth-quarter change in real GDP after
subtracting 0.25 percentage point from the third-quarter change. Final sales of computers added 0.10
percentage point to the fourth-quarter change in real GDP after adding 0.11 percentage point to the
third-quarter change.
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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 (2005) dollars. Price
indexes are chain-type measures.
This news release is available on BEAs Web site along with the Technical Note and Highlights related to
this release. For information on revisions, see "Revisions to GDP, GDI, and Their Major Components".
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The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.6 percent in the fourth quarter, 0.1 percentage point more than the second estimate; this
index increased 1.4 percent in the third quarter. Excluding food and energy prices, the price index for
gross domestic purchases increased 1.2 percent in the fourth quarter, the same increase as in the third.
Real personal consumption expenditures increased 1.8 percent in the fourth quarter, compared
with an increase of 1.6 percent in the third. Durable goods increased 13.6 percent, compared with an
increase of 8.9 percent. Nondurable goods increased 0.1 percent, compared with an increase of 1.2
percent. Services increased 0.6 percent, the same increase as in the third.
Real nonresidential fixed investment increased 13.2 percent in the fourth quarter, in contrast to a
decrease of 1.8 percent in the third. Nonresidential structures increased 16.7 percent; it was unchanged
in the third quarter. Equipment and software increased 11.8 percent, in contrast to a decrease of 2.6
percent. Real residential fixed investment increased 17.6 percent, compared with an increase of 13.5
percent.
Real exports of goods and services decreased 2.8 percent in the fourth quarter, in contrast to an
increase of 1.9 percent in the third. Real imports of goods and services decreased 4.2 percent, compared
with a decrease of 0.6 percent.
Real federal government consumption expenditures and gross investment decreased 14.8 percent
in the fourth quarter, in contrast to an increase of 9.5 percent in the third. National defense decreased
22.1 percent, in contrast to an increase of 12.9 percent. Nondefense increased 1.7 percent, compared
with an increase of 3.0 percent. Real state and local government consumption expenditures and gross
investment decreased 1.5 percent, in contrast to an increase of 0.3 percent.
The change in real private inventories subtracted 1.52 percentage points from the fourth-quarter
change in real GDP, after adding 0.73 percentage point to the third-quarter change. Private businesses
increased inventories $13.3 billion in the fourth quarter, following increases of $60.3 billion in the third
quarter and $41.4 billion in the second.
Real final sales of domestic product -- GDP less change in private inventories -- increased 1.9
percent in the fourth quarter, compared with an increase of 2.4 percent in the third.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- was unchanged in the fourth quarter, compared with an increase of 2.6 percent in the third.
Gross national product
Real gross national product -- the goods and services produced by the labor and property
supplied by U.S. residents -- increased 0.9 percent in the fourth quarter, compared with an increase of
2.9 percent in the third. GNP includes, and GDP excludes, net receipts of income from the rest of the
world, which increased $19.2 billion in the fourth quarter after decreasing $4.7 billion in the third; in the
fourth quarter, receipts increased $25.3 billion, and payments increased $6.2 billion.
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
1.3 percent, or $53.1 billion, in the fourth quarter to a level of $15,864.1 billion. In the third quarter,
current-dollar GDP increased 5.9 percent, or $225.4 billion.
Gross domestic income
Real gross domestic income (GDI), which measures the output of the economy as the costs
incurred and the incomes earned in the production of GDP, increased 2.6 percent in the fourth quarter,
compared with an increase of 1.6 percent in the third. For a given quarter, the estimates of GDP and
GDI may differ for a variety of reasons, including the incorporation of largely independent source
data. However, over longer time spans, the estimates of GDP and GDI tend to follow similar patterns
of change.
Revisions
The "third" estimate of the fourth-quarter percent change in real GDP is 0.3 percentage point, or
$8.6 billion, more than the second estimate issued last month, primarily reflecting upward revisions to
nonresidential fixed investment and to exports that were partly offset by a downward revision to
personal consumption expenditures.
Advance Estimate Second Estimate Third Estimate
(Percent change from preceding quarter)
Real GDP.................................. -0.1 0.1 0.4
Current-dollar GDP........................ 0.5 1.0 1.3
Gross domestic purchases price index..... 1.3 1.5 1.6
2012 GDP
Real GDP increased 2.2 percent in 2012 (that is, from the 2011 annual level to the 2012 annual
level), compared with an increase of 1.8 percent in 2011.
The increase in real GDP in 2012 primarily reflected positive contributions from personal
consumption expenditures (PCE), nonresidential fixed investment, exports, residential fixed investment,
and private inventory investment that were partly offset by negative contributions from federal
government spending and state and local government spending. Imports, which are a subtraction in the
calculation of GDP, increased.
The acceleration in real GDP in 2012 primarily reflected a deceleration in imports, upturns in
residential fixed investment and in private inventory investment, and smaller decreases in state and local
government spending and in federal government spending that were partly offset by decelerations in
PCE and in exports.
Real GDI increased 2.0 percent in 2012, compared with an increase of 1.8 percent in 2011.
The price index for gross domestic purchases increased 1.7 percent in 2012, compared with an
increase of 2.5 percent in 2011.
Current-dollar GDP increased 4.0 percent, or $609.1 billion, in 2012, compared with an increase
of 4.0 percent, or $576.8 billion, in 2011.
During 2012 (that is, measured from the fourth quarter of 2011 to the fourth quarter of 2012),
real GDP increased 1.7 percent. Real GDP increased 2.0 percent during 2011. The price index for gross
domestic purchases increased 1.6 percent during 2012, compared with an increase of 2.5 percent during
2011.
Corporate Profits
Profits from current production (corporate profits with inventory valuation and capital
consumption adjustments) increased $45.4 billion in the fourth quarter, compared with an increase of
$45.7 billion in the third quarter. Current-production cash flow (net cash flow with inventory valuation
adjustment) -- the internal funds available to corporations for investment -- decreased $89.8 billion, in
contrast to an increase of $32.5 billion.
Taxes on corporate income decreased $4.4 billion in the fourth quarter, in contrast to an increase
of $9.1 billion in the third. Profits after tax with inventory valuation and capital consumption
adjustments increased $49.8 billion, compared with an increase of $36.7 billion. Dividends increased
$124.3 billion, compared with an increase of $12.8 billion. The large fourth-quarter increase reflected
accelerated and special dividends paid by corporations at the end of 2012 in anticipation of changes to
individual income tax rates. Current-production undistributed profits decreased $74.3 billion, in contrast
to an increase of $23.8 billion.
Domestic profits of financial corporations decreased $3.5 billion in the fourth quarter, in contrast
to an increase of $68.1 billion in the third. Domestic profits of nonfinancial corporations increased
$24.8 billion, in contrast to a decrease of $14.1 billion. In the fourth quarter, real gross value added of
nonfinancial corporations increased, and profits per unit of real value added increased. The increase in
unit profits reflected decreases in both the unit labor and unit nonlabor costs incurred by corporations
that were partly offset by a decrease in unit prices.
The rest-of-the-world component of profits increased $24.1 billion in the fourth quarter, in
contrast to a decrease of $8.2 billion in the third. 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 fourth-quarter
increase was accounted for by a larger increase in receipts than in payments.
Profits before tax with inventory valuation adjustment is the best available measure of industry
profits because estimates of the capital consumption adjustment by industry do not exist. This measure
reflects depreciation-accounting practices used for federal income tax returns. According to this
measure, domestic profits of financial corporations decreased. The decrease in profits of financial
corporations was more than accounted for by a decrease in "other" financial industries. Domestic profits
of nonfinancial corporations increased, primarily reflecting increases in manufacturing, in "other"
nonfinancial, and in wholesale trade that were partly offset by a decrease in information. Within
manufacturing, the largest increase was in petroleum and coal products.
Profits before tax increased $27.3 billion in the fourth quarter, compared with an increase of
$86.2 billion in the third. 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 $0.5 billion in the fourth quarter (from -$200.0 billion to -$199.5 billion),
compared with an increase of $2.4 billion in the third. The inventory valuation adjustment increased
$17.6 billion (from -$26.8 billion to -$9.2 billion), in contrast to a decrease of $42.8 billion.
Corporate Profits in 2012
Profits from current production increased 6.8 percent in 2012, compared with an increase of 7.3
percent in 2011. Domestic profits increased 9.5 percent, compared with an increase of 6.7 percent. The
rest-of-the-world component of profits decreased 2.0 percent, in contrast to an increase of 9.3 percent.
Taxes on corporate income increased 18.5 percent in 2012, compared with an increase of 1.5
percent in 2011. Profits after tax with inventory valuation and capital consumption adjustments
increased 3.7 percent, compared with an increase of 8.9 percent. Dividends increased 11.9 percent,
compared with an increase of 16.0 percent; current-production undistributed profits decreased 3.9
percent, in contrast to an increase of 3.1 percent.
According to the measure of profits before tax with inventory valuation adjustment, domestic
profits of both financial and nonfinancial corporations increased in 2012. The increase in profits of
nonfinancial corporations reflected increases in all major industries.
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BEAs national, international, regional, and industry estimates; the Survey of Current Business;
and BEA news releases are available without charge on BEAs Web site at www.bea.gov. By visiting
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Next release -- April 26, 2013, at 8:30 A.M. EDT for:
Gross Domestic Product: First Quarter 2013 (Advance Estimate)