News Release
These data have been superseded. Please see our latest releases for current estimates and contact information.
Gross Domestic Product, 3rd quarter 2014 (second estimate); Corporate Profits, 3rd quarter 2014 (preliminary estimate)
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 3.9 percent in the third quarter of
2014, according to the "second" estimate released by the Bureau of Economic Analysis. In the second
quarter, real GDP increased 4.6 percent.
The GDP estimate released today is based on more complete source data than were available for
the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was 3.5
percent. With the second estimate for the third quarter, private inventory investment decreased less than
previously estimated, and both personal consumption expenditures (PCE) and nonresidential fixed
investment increased more. In contrast, exports increased less than previously estimated (see
"Revisions" on page 3).
The increase in real GDP in the third quarter reflected positive contributions from PCE,
nonresidential fixed investment, federal government spending, exports, residential fixed investment, and
state and local government spending that were partly offset by a negative contribution from private
inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The deceleration in the percent change in real GDP reflected a downturn in private inventory
investment and decelerations in exports, in nonresidential fixed investment, in state and local
government spending, in PCE, and in residential fixed investment that were partly offset by a downturn
in imports and an upturn in federal government spending.
The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.4 percent in the third quarter, 0.1 percentage point more than in the advance estimate; this
index increased 2.0 percent in the second quarter. Excluding food and energy prices, the price index for
gross domestic purchases increased 1.6 percent in the third quarter, compared with an increase of 1.7
percent in the second.
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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 (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. For information on revisions, see "The Revisions to GDP, GDI, and Their
Major Components."
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Real personal consumption expenditures increased 2.2 percent in the third quarter, compared
with an increase of 2.5 percent in the second. Durable goods increased 8.7 percent, compared with an
increase of 14.1 percent. Nondurable goods increased 2.2 percent, the same increase as in the second
quarter. Services increased 1.2 percent, compared with an increase of 0.9 percent.
Real nonresidential fixed investment increased 7.1 percent in the third quarter, compared with an
increase of 9.7 percent in the second. Investment in nonresidential structures increased 1.1 percent,
compared with an increase of 12.6 percent. Investment in equipment increased 10.7 percent, compared
with an increase of 11.2 percent. Investment in intellectual property products increased 6.4 percent,
compared with an increase of 5.5 percent. Real residential fixed investment increased 2.7 percent,
compared with an increase of 8.8 percent.
Real exports of goods and services increased 4.9 percent in the third quarter, compared with an
increase of 11.1 percent in the second. Real imports of goods and services decreased 0.7 percent, in
contrast to an increase of 11.3 percent.
Real federal government consumption expenditures and gross investment increased 9.9 percent
in the third quarter, in contrast to a decrease of 0.9 percent in the second. National defense increased
16.0 percent, compared with an increase of 0.9 percent. Nondefense increased 0.4 percent, in contrast to
a decrease of 3.8 percent. Real state and local government consumption expenditures and gross
investment increased 0.8 percent, compared with an increase of 3.4 percent.
The change in real private inventories subtracted 0.12 percentage point from the third-quarter
change in real GDP after adding 1.42 percentage points to the second-quarter change. Private
businesses increased inventories $79.1 billion in the third quarter, following increases of $84.8 billion in
the second quarter and $35.2 billion in the first.
Real final sales of domestic product -- GDP less change in private inventories -- increased 4.1
percent in the third quarter, compared with an increase of 3.2 percent in the second.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 3.0 percent in the third quarter, compared with an increase of 4.8 percent in the
second.
Gross national product
Real gross national product -- the value of the goods and services produced by the labor and
property supplied by U.S. residents -- increased 3.8 percent in the third quarter, compared with an
increase of 4.6 percent in the second. GNP includes, and GDP excludes, net receipts of income from the
rest of the world, which decreased $1.6 billion in the third quarter, in contrast to an increase of $1.4
billion in the second; in the third quarter, receipts decreased $1.1 billion, and payments increased $0.5
billion.
Current-dollar GDP
Current-dollar GDP -- the market value of the production of goods and services in the United
States -- increased 5.3 percent, or $227.0 billion, in the third quarter to a level of $17,555.2 billion. In
the second quarter, current-dollar GDP increased 6.8 percent, or $284.2 billion.
Gross domestic income
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 on that production, increased
4.5 percent in the third quarter, compared with an increase of 4.0 percent (revised) in the second. 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 upward revision to the percent change in real GDP primarily reflected upward revisions to
private inventory investment, to personal consumption expenditures, and to nonresidential fixed
investment that were partly offset by a downward revision to exports and an upward revision to imports.
Advance Estimate Second Estimate
(Percent change from preceding quarter)
Real GDP............................... 3.5 3.9
Current-dollar GDP..................... 4.9 5.3
Real GDI............................... -- 4.5
Gross domestic purchases price index... 1.3 1.4
Corporate Profits
Profits from current production
Profits from current production (corporate profits with inventory valuation adjustment (IVA) and
capital consumption adjustment (CCAdj)) increased $43.8 billion in the third quarter, compared with an
increase of $164.1 billion in the second.
Profits of domestic financial corporations increased $20.3 billion in the third quarter, compared
with an increase of $33.3 billion in the second. Profits of domestic nonfinancial corporations increased
$22.5 billion, compared with an increase of $134.3 billion. The rest-of-the-world component of profits
increased $1.0 billion, in contrast to a decrease of $3.6 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 third
quarter, receipts were unchanged, and payments decreased $1.0 billion.
Taxes on corporate income decreased $4.8 billion in the third quarter, in contrast to an increase
of $45.7 billion in the second. Profits after tax with IVA and CCAdj increased $48.6 billion, compared
with an increase of $118.4 billion.
Dividends decreased $3.9 billion in the third quarter, compared with a decrease of $0.5 billion in
the second. Undistributed profits increased $52.5 billion, compared with an increase of $118.8 billion.
Net cash flow with IVA -- the internal funds available to corporations for investment -- increased $25.1
billion, compared with an increase of $133.4 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 increased $16.8 billion in the third quarter,
compared with an increase of $11.9 billion in the second. The CCAdj increased $1.2 billion, in contrast
to a decrease of $0.8 billion.
Gross value added of nonfinancial domestic corporate business
In the third quarter, real gross value added of nonfinancial corporations increased, and profits per
unit of real gross value added increased. The increase in unit profits reflected an increase in unit prices
that was partly offset by an increase in unit nonlabor costs; unit labor costs were unchanged.
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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 -- December 23, 2014 at 8:30 A.M. EST for:
Gross Domestic Product: Third Quarter 2014 (Third Estimate)
Corporate Profits: Third Quarter 2014 (Revised Estimate)
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Release dates in 2015
Gross Domestic Product
2014: IV and 2014 annual 2015: I 2015: II 2015: III
Advance.... January 30 April 29 July 30 October 29
Second..... February 27 May 29 August 27 November 24
Third...... March 27 June 24 September 25 December 22
Corporate Profits
Preliminary... .. May 29 August 27 November 24
Revised....... March 27 June 24 September 25 December 22