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Technical Note

The tables in this note are available in an XLS spreadsheet, and the entire note is available in PDF format.

                          Technical Note
                     Gross Domestic Product
              Fourth Quarter of 2003 (Preliminary)
                       February 27, 2004

This technical note provides background information about the source data and estimating
methods used to produce the estimates presented in the GDP news release; the note also
provides some perspective on the estimates. Additional material is available on BEA's Web
site <>. In a few weeks, the estimates will be published in BEA's monthly
journal, the Survey of Current Business, along with a more detailed analysis of the
estimates ("The Business Situation"). 

Real GDP (revised):  Real GDP is now estimated to have increased 4.1 percent (annual
rate) in the fourth quarter of 2003 after increasing 8.2 percent in the third quarter.  The
revised estimate for the fourth quarter is 0.1 percentage point more than the advance
estimate released a month ago.  As in the advance estimate, consumer spending was
mainly responsible for the slowdown; in addition, net exports declined in the fourth
quarter after increasing in the third.
Real final sales of domestic product (GDP less change in private inventories) is now
estimated to have increased 3.2 percent in the fourth quarter after increasing 8.3 percent
in the third.  Inventory investment added 0.92 percentage point to the fourth-quarter
change in real GDP. 

Prices (revised): The price index for gross domestic purchases increased 1.1 percent in the
fourth quarter, 0.1 percentage point more than in the advance estimate.  This measure of
prices increased 1.8 percent in the third quarter.  The slowdown from the third quarter to
the fourth mainly reflected a downturn in energy prices.  Excluding prices of food and
energy, which are more volatile than most other prices, the index increased 1.2 percent in
the fourth quarter after increasing 1.3 percent in the third. 

                Sources of Revision to Real GDP

The upward revision to fourth-quarter real GDP reflected upward revisions to equipment
and software investment, to inventory investment, and to exports that were mostly offset
by an upward revision to imports:

  .  Business investment in equipment and software was revised up, reflecting newly
     available and revised Census Bureau data on shipments for December and newly
     available data on exports and imports for December.
  .  Inventory investment was revised up, mainly reflecting newly available and revised
     Census Bureau data on inventories; upward revisions to inventories in
     manufacturing and in wholesale trade were partly offset by a downward revision to
     retail trade inventories.
  .  Both exports and imports were revised up, reflecting the newly available Census
     Bureau data on goods for December and revised data for November.
Table A shows both the BEA assumptions used for the advance estimate of GDP and the
newly available and revised source data incorporated for the preliminary estimate for
selected key series. 

Brent R. Moulton  
Associate Director for National Economic Accounts  
Bureau of Economic Analysis  
(202) 606-9606 
February 27, 2004   

                         Table A. SOURCE DATA FOR THE ADVANCE AND PRELIMINARY 
                            ESTIMATES OF GDP FOR THE FOURTH QUARTER OF 2003
This table shows the actual data used for the preliminary estimate of GDP for the fourth quarter of 2003. 
For these key series, actual data for December were not available in time for inclusion in the advance
GDP estimate released on January 30, 2004, and BEA made assumptions for these source data.  The
numbers in brackets show the December values that had been assumed for the advance estimate.  For
most series, the data incorporated for November and, in some cases, for October were preliminary, and
the numbers shown in brackets are the values used last month.

All series shown in the table are in billions of dollars, seasonally adjusted at annual rates, and are
published by the Bureau of the Census.                                                           
                                                    Jul.         Aug.          Sep.         Oct.         Nov.         Dec.
 Private fixed investment:

   Nonresidential structures:
1    Value of new total private
       construction put in place less
       residential (inc. improvements)...           217.2        214.4        216.7         217.7        212.6        210.2
                                                                                           {216.2}      {215.1}      {215.6}
  Equipment and software:
2  Manufacturers' shipments of
     complete aircraft....................           27.2         25.4         24.3          25.9         33.1         25.5
                                                                                                         {33.1}       {18.2}
  Residential structures:
    Value of new residential
      construction put in place:
3      Single family .....................          299.4        307.2        315.5         324.4        333.4        338.3
                                                                                           (324.2}      {333.5}      {341.4}

4      Multifamily........................           34.0         34.9         34.9          34.7         35.0         34.9
                                                                                            {34.8}       {34.9}       {35.7}

  Change in private inventories: 
5     Change in inventories for nondurable                        
        manufacturing.....................           -4.6         -6.6         -0.8          -3.4          4.6         -0.7
                                                                                                         {-0.1}        {1.8}
5a    Change in inventories for merchant
        wholesale and retail industries other
        than motor vehicles and equipment..         -15.2        - 3.9         43.0          20.4         38.8         25.7
                                                                                                         {37.8}       {28.5}
  Net exports:                                                                                                
  Exports of goods:                                                           
6   U.S. exports of goods,
       accounts basis......................         724.4        692.3        716.6         739.9        764.7        755.2
                                                                                                        {765.8}      {746.2}
6a        Excluding gold....................        720.6        685.3        711.5         734.9        760.2        750.6
                                                                                                        {761.3}      {742.0}
   Imports of goods:                                                                           
7    U.S. imports of goods,
        accounts basis.....................        1264.5       1228.6       1275.2        1304.9       1292.0       1333.3
                                                                                                       {1289.1}     {1295.7}
7a         Excluding gold...................       1261.9       1223.3       1270.8        1300.9       1288.0       1330.0
                                                                                                       {1285.0}     {1292.1}
8   Net exports of goods...................        -540.1       -536.3       -558.6        -565.1       -527.3       -578.1
                                                                                                       {-523.3}     {-549.6}
    8a      Excluding gold.................        -541.3       -538.0       -559.4        -565.9        -527.7       -579.4
                                                                                                        {-523.7}     {-550.2}

  State and local:
9     Value of new construction put
        in place...........................         200.7        201.7        202.8         202.3         202.9        204.5
                                                                                           {203.4}       {205.7}      {204.6}