EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Thursday, June 28, 2018
BEA 18—31

* See the navigation bar at the right side of the news release text for links to data tables,
contact personnel and their telephone numbers, and supplementary materials.

Lisa Mataloni: (301) 278-9083 (GDP) gdpniwd@bea.gov
Kate Pinard: (301) 278-9417 (Corporate Profits) cpniwd@bea.gov
Jeannine Aversa: (301) 278-9003 (News Media) Jeannine.Aversa@bea.gov
National Income and Product Accounts
Gross Domestic Product: First Quarter 2018 (Third Estimate)
Corporate Profits: First Quarter 2018 (Revised Estimate)
Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the first quarter of 2018
(table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth
quarter, real GDP increased 2.9 percent.

The GDP estimate released today is based on more complete source data than were available for the
"second" estimate issued last month.  In the second estimate, the increase in real GDP was 2.2 percent.
With this third estimate for the first quarter, the general picture of economic growth remains the same;
private inventory investment and personal consumption expenditures (PCE) were revised down (see
"Updates to GDP" on page 2).

Real GDP: Percent Change from Preceding Quarter

Real gross domestic income (GDI) increased 3.6 percent in the first quarter, compared with an increase
of 1.0 percent in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of
U.S. economic activity that equally weights GDP and GDI, increased 2.8 percent in the first quarter,
compared with an increase of 2.0 percent in the fourth quarter (table 1).

The increase in real GDP in the first quarter reflected positive contributions from nonresidential fixed
investment, PCE, exports, federal government spending, and state and local government spending that
were partly offset by negative contributions from residential fixed investment and private inventory
investment. Imports, which are a subtraction in the calculation of GDP, increased (table 2).

The deceleration in real GDP growth in the first quarter reflected decelerations in PCE, exports, state
and local government spending, and federal government spending and a downturn in residential fixed
investment. These movements were partly offset by a smaller decrease in private inventory investment
and a larger increase in nonresidential fixed investment. Imports, which are a subtraction in the
calculation of GDP, decelerated.

Current-dollar GDP increased 4.2 percent, or $206.0 billion, in the first quarter to a level of $19.96
trillion. In the fourth quarter, current-dollar GDP increased 5.3 percent, or $253.5 billion (table 1 and
table 3).

The price index for gross domestic purchases increased 2.7 percent in the first quarter, compared with
an increase of 2.5 percent in the fourth quarter (table 4). The PCE price index increased 2.5 percent,
compared with an increase of 2.7 percent. Excluding food and energy prices, the PCE price index
increased 2.3 percent, compared with an increase of 1.9 percent (appendix table A).

Updates to GDP

The percent change in real GDP was revised down 0.2 percentage point from the second estimate,
reflecting downward revisions to private inventory investment, PCE, and exports that were partly offset
by an upward revision to nonresidential fixed investment. Imports were revised up. For more
information, see the Technical Note. A detailed "Key Source Data and Assumptions" file is also posted
for each release.  For information on updates to GDP, see the "Additional Information" section that

                                 Advance Estimate   Second Estimate  Third Estimate
			             (Percent change from preceding quarter)

Real GDP                               2.3               2.2              2.0
Current-dollar GDP                     4.3               4.2              4.2
Real GDI                                …                2.8              3.6
Average of Real GDP and Real GDI        …                2.5              2.8
Gross domestic purchases price index   2.8               2.7              2.7
PCE price index                        2.7               2.6              2.5

Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) increased $39.5 billion in the first quarter, in contrast to a decrease of $1.1
billion in the fourth quarter.

Profits of domestic financial corporations increased $7.0 billion in the first quarter, in contrast to a
decrease of $14.6 billion in the fourth quarter. Profits of domestic nonfinancial corporations increased
$28.8 billion, compared with an increase of $19.4 billion. Rest-of-the-world  profits increased $3.7
billion, in contrast to a decrease of $5.9 billion. In the first quarter, receipts increased $20.9 billion, and
payments increased $17.2 billion.


Upcoming Comprehensive Update of the National Income and Product Accounts

BEA will release the results of the 15th comprehensive (or benchmark) update of the national
income and product accounts (NIPAs) in conjunction with the second quarter 2018 "advance"
estimate on July 27, 2018. For more information, see the Technical Note. Details on the planned
statistical, definitional, and presentational changes are available in the April Survey of Current
Business article "Preview of the 2018 Comprehensive Update of the National Income and Product
Accounts." An article in the September Survey will describe the results in detail. Revised NIPA
table stubs are available on the BEA Web site; news release table stubs for the 2018
Comprehensive Update will be available prior to the release in July.


                        Next release:  July 27, 2018 at 8:30 A.M. EDT
              Gross Domestic Product:  Second Quarter 2018 (Advance Estimate)
              2018 NIPA Comprehensive Update: 1929 through First Quarter 2018

                                *          *          *

Additional Information


Additional resources available at www.bea.gov:
•	Stay informed about BEA developments by reading the BEA blog, signing up for BEA’s email
        subscription service, or following BEA on Twitter @BEA_News.
•	Historical time series for these estimates can be accessed in BEA’s Interactive Data Application.
•	Access BEA data by registering for BEA’s Data Application Programming Interface (API).
•	For more on BEA’s statistics, see our monthly online journal, the Survey of Current Business.
•	BEA's news release scheduleNIPA Handbook:  Concepts and Methods of the U.S. National Income and Product Accounts


Gross domestic product (GDP) is the value of the goods and services produced by the nation’s economy
less the value of the goods and services used up in production. GDP is also equal to the sum of personal
consumption expenditures, gross private domestic investment, net exports of goods and services, and
government consumption expenditures and gross investment.

Gross domestic income (GDI) is the sum of incomes earned and costs incurred in the production of GDP.
In national economic accounting, GDP and GDI are conceptually equal. In practice, GDP and GDI differ
because they are constructed using largely independent source data. Real GDI is calculated by deflating
gross domestic income using the GDP price index as the deflator, and is therefore conceptually
equivalent to real GDP.

Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is,
at “market value.” Also referred to as “nominal estimates” or as “current-price estimates.”
Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.
The gross domestic purchases price index measures the prices of final goods and services purchased by
U.S. residents.

The personal consumption expenditure price index measures the prices paid for the goods and services
purchased by, or on the behalf of, “persons.”

Profits from current production, referred to as corporate profits with inventory valuation adjustment
(IVA) and capital consumption adjustment (CCAdj) in the NIPAs, is a measure of the net income of
corporations before deducting income taxes that is consistent with the value of goods and services
measured in GDP. 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. Profits for domestic industries reflect profits for
all corporations located within the within the geographic borders of the United States. The rest-of-
the-world (ROW) component of profits is measured as the difference between profits received from ROW
and profits paid to ROW.

For more definitions, see the Glossary: National Income and Product Accounts.

Statistical conventions

Annual rates. Quarterly values are expressed at seasonally-adjusted annual rates (SAAR), unless
otherwise specified. Dollar changes are calculated as the difference between these SAAR values. For
details, see the FAQ “Why does BEA publish estimates at annual rates?”

Percent changes in quarterly series are calculated from unrounded data and are displayed at annual
rates, unless otherwise specified. For details, see the FAQ “How is average annual growth calculated?”

Quantities and prices. Quantities, or “real” volume measures, and prices are expressed as index
numbers with a specified reference year equal to 100 (currently 2009). Quantity and price indexes are
calculated using a Fisher-chained weighted formula that incorporates weights from two adjacent
periods (quarters for quarterly data and annuals for annual data). “Real” dollar series are calculated by
multiplying the published quantity index by the current dollar value in the reference year (2009) and
then dividing by 100. Percent changes calculated from real quantity indexes and chained-dollar levels
are conceptually the same; any differences are due to rounding.

Chained-dollar values are not additive because the relative weights for a given period differ from those
of the reference year. In tables that display chained-dollar values, a “residual” line shows the difference
between the sum of detailed chained-dollar series and its corresponding aggregate.

Updates to GDP

BEA releases three vintages of the current quarterly estimate for GDP:  "Advance" estimates are
released near the end of the first month following the end of the quarter and are based on source data
that are incomplete or subject to further revision by the source agency; “second” and “third” estimates
are released near the end of the second and third months, respectively, and are based on more detailed
and more comprehensive data as they become available.

Annual and comprehensive updates are typically released in late July. Annual updates generally cover at
least the 3 most recent calendar years (and their associated quarters) and incorporate newly available
major annual source data as well as some changes in methods and definitions to improve the accounts.
Comprehensive (or benchmark) updates are carried out at about 5-year intervals and incorporate major
periodic source data, as well as major conceptual improvements.
The table below shows the average revisions to the quarterly percent changes in real GDP between
different estimate vintages, without regard to sign.

Vintage                               Average Revision Without Regard to Sign
                                         (percentage points, annual rates)
Advance to second                                     0.5
Advance to third                                      0.6
Second to third                                       0.2
Advance to latest                                     1.3
Note - Based on estimates from 1993 through 2016. For more information on GDP
updates, see Revision Information on the BEA Web site.

The larger average revision from the advance to the latest estimate reflects the fact that periodic
comprehensive updates include major statistical and methodological improvements.

Unlike GDP, an advance current quarterly estimate of GDI is not released because data on domestic
profits and on net interest of domestic industries are not available. For fourth quarter estimates, these
data are not available until the third estimate.