*See the navigation bar at the right side of the technical note text for supplementary materials.
Technical Note
Gross Domestic Product
Fourth Quarter of 2017 (Advance Estimate)
January 26, 2018
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 fourth 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 Survey of Current Business, BEA’s online monthly journal,
will publish a more detailed analysis of the estimates ("GDP and the Economy").

Real GDP

Real GDP increased 2.6 percent (annual rate) in the fourth quarter of 2017, following an increase of 3.2
percent in the third quarter of 2017. The increase in real GDP in the fourth quarter reflected positive
contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports,
residential fixed investment, state and local government spending, and federal government spending
that were partly offset by a negative contribution from private inventory investment. Imports, which are
a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventory
investment that was partly offset by accelerations in PCE, exports, nonresidential fixed investment, state
and local government spending, and federal government spending, and an upturn in residential fixed
investment. Imports, which are a subtraction in the calculation of GDP, turned up.

Key Source Data and Assumptions for the Advance Estimate

The advance GDP estimate for the fourth quarter of 2017 is based on source data that are incomplete
and subject to updates. Three months of source data were available for consumer spending on goods;
shipments of capital equipment; motor vehicle sales and inventories; durable goods manufacturing
inventories; wholesale and retail trade inventories; exports and imports of goods; federal government
outlays; and consumer, producer, and international prices. For major source data series for which only
two months of data are available, BEA's key assumptions for the third month are shown in the "Key
Source Data and Assumptions" table on the BEA Web site.

Prices

The PCE price index increased 2.8 percent in the fourth quarter, following an increase of 1.5 percent in
the third quarter. Excluding food and energy prices, the PCE price index increased 1.9 percent after
increasing 1.3 percent.

Disposable Personal Income

Real disposable personal income increased 1.1 percent in the fourth quarter, following an increase of
0.5 percent in the third. The personal saving rate was 2.6 percent in the fourth quarter, compared with
3.3 percent in the third.


Erich H. Strassner
Associate Director, National Economic Accounts
Bureau of Economic Analysis
(301) 278-9612