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Technical Note
Gross Domestic Product
Third Quarter of 2011 (Second)
November 22, 2011
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 complete set of estimates for the
third quarter is available on BEA's Web site at www.bea.gov; a brief summary of "highlights" is also
posted on the 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 ("GDP and the Economy").

Sources of Revision to Real GDP

Real GDP increased 2.0 percent (annual rate) in the third quarter, a downward revision of 0.5 percentage
point from the advance estimate.  Downward revisions to inventory investment, to nonresidential fixed
investment, and to consumer spending were partly offset by a downward revision to imports.

*       The downward revision to inventory investment was primarily to wholesale trade inventories and
        was based on newly available Census Bureau inventory data for September and revised data for
        July and August.
*       The downward revision to nonresidential fixed investment primarily reflected a downward revision
        to equipment and software, particularly to transportation equipment and to information processing
        equipment and software.  The revision to transportation equipment reflected newly available motor
        vehicle registration data for September and newly available Census data on exports and imports
        of nondefense aircraft.  Within information processing equipment and software, the largest revision
        was to software and was based on a sample of software company revenue data.
*       The downward revision to consumer spending was to both goods and services.  The largest contributor
        to the revision was motor vehicle fuels, lubricants, and fluids, which was based on newly available
        August data from the Energy Information Administration.
*       The downward revision to imports was mostly to goods and reflected newly available Census goods data
        for September and revised data for August.

For the third quarter, there is a sizable difference between exports in the Census goods data and the
estimate of exports in GDP, which is related to gold exports.  For calculating GDP, the national income
and product accounts exclude exports and imports of gold that are not directly related to domestic
production or consumption—that is, gold that is held solely as a store of value is not included.

The price index for gross domestic purchases increased 1.9 percent in the third quarter, a downward
revision of 0.1 percentage point.  The downward revision to prices was primarily to prices for consumer
spending and for state and local government spending that reflected newly available BLS employment cost
index data for the third quarter.

Corporate Profits and Gross Domestic Income

Profits from current production increased $39.8 billion, or 2.1 percent (quarterly rate), in the third quarter.
Domestic profits of financial corporations increased $16.0 billion, domestic profits of nonfinancial
corporations increased $17.4 billion, and rest-of-the-world profits increased $6.4 billion.

Real gross domestic income (GDI) increased 0.4 percent in the third quarter.  GDI measures output as the costs
incurred and the incomes earned in the production of GDP.  In theory, GDP should equal GDI, but in practice,
they can differ because they are estimated using largely independent and less-than-perfect source data.

Revisions to Wages and Salaries and Disposable Personal Income

In addition to presenting revised estimates for the third quarter, today's release also presents revised
estimates of second-quarter wages and salaries, personal taxes, and contributions for government social
insurance.  Wage and salary disbursements are now estimated to have increased $38.9 billion in the second
quarter of 2011, a downward revision of $39.8 billion.  These estimates reflect newly available wage and
salary tabulations for the second quarter from the BLS quarterly census of employment and wages (QCEW).
These data are more comprehensive than the monthly employment and earnings data that were used for the
earlier estimates—the QCEW data include irregular pay, such as bonuses and gains from the exercise of
stock options.

Real disposable personal income is now estimated to have decreased 0.5 percent in the second quarter and
2.1 percent in the third.  (By comparison, the estimates that were available last month showed an increase
of 0.6 percent in the second quarter and a decrease of 1.7 percent in the third.)

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