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Technical Note
Gross Domestic Product
Third Quarter of 2013 (Second Estimate)
December 05, 2013
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

Sources of Revision to Real GDP

Real GDP increased 3.6 percent (annual rate) in the third quarter, an upward revision of
0.8 percentage point from the advance estimate. The revision reflected upward revisions
to private inventory investment and to nonresidential fixed investment that were partly
offset by an upward revision to imports and a downward revision to exports.

*     The upward revision to private inventory investment primarily reflected upward
      revisions to wholesale trade, to retail trade, to mining, utilities, and construction, and
      to “other” industries. The revisions for wholesale and retail trade industries were
      based primarily on the incorporation of newly available Census Bureau inventory
      data for September and revised data for August. The revisions for mining, utilities
      and construction and for “other” industries primarily reflected newly available
      preliminary third-quarter Census Bureau quarterly financial report data.
*     The upward revision to nonresidential fixed investment primarily reflected an upward
      revision to equipment, which was mainly based on newly available data for exports
      and imports for September, revised exports and imports data for August, and revised
      Census Bureau shipments data for September.
*     Both the upward revision to imports and the downward revision to exports were
      mainly to goods and reflected newly available Census goods data for September and
      revised data for August.

The price index for gross domestic purchases increased 1.8 percent in the third quarter,
the same increase as in the advance estimate.

Gross Domestic Income and Corporate Profits

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 1.4
percent in the third quarter. 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.

Profits from current production increased $38.3 billion, or 1.8 percent (quarterly rate),
in the third quarter.  Domestic profits of financial corporations increased $8.6 billion,
domestic profits of nonfinancial corporations increased $13.0 billion, and rest-of-the-
world profits increased $16.7 billion.

Dividends paid by corporations decreased $179.7 billion in the third quarter, in
contrast to an increase of $273.5 billion in the second. The large third-quarter
decrease primarily reflected dividends paid by Fannie Mae to the federal government
in the second quarter.

Revisions to Wages and Salaries, Disposable Personal Income, and GDI

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. Wages and salaries are now estimated to
have increased $77.2 billion in the second quarter of 2013, an upward revision of $22.6
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 increased 4.1 percent
(annual rate) in the second quarter and to have increased 2.9 percent in the third. (By
comparison, the estimates that were available last month showed an increase of 3.5
percent in the second quarter and an increase of 2.5 percent in the third.)

The revision to second-quarter wages and salaries also resulted in a revision to GDI.
Real GDI is now estimated to have increased 3.2 percent in the second quarter, an
upward revision of 0.6 percentage point.

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