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Story 1: Advanced Estimate: U.S. Economy Grew Based On Incomplete Data at 4% Rate in Second Quarter of 2014 — Wait To End of September For Final Estimate — Expect 2% or Less Growth Rate — Videos
Mark Zandi Discusses U.S. Second-Quarter GDP, Economy: Video
United States economy grows by 4%
US Dollar: 2Q US GDP Data May Outshine FOMC in Driving Volatility
KeiserReport: Liam Halligan on UK economy frauds (29July14)
Dr. Paul Craig Roberts: Fed Laundering Treasury Bonds in Belgium, Real GDP was Negative & More
Still Report #245 – U.S. GDP is a Lie
Published on May 2, 2014
Recently announced U.S. GDP numbers would be negative 4.6% if the effects of the Fed’s Quantitative Easing program were subtracted. As QE is tapered away, so will the artificial appearance of growth it produced. Please consider supporting us there for as little as $1 per month. Go to billstill.com, click on the Subscribe button. You can Unsubscribe at any time.
US GDP Drops
Sadie doesn’t want her brother to grow up
U.S. Economy Grows at 4% Pace in 2Q
U.S. economic growth accelerated more than expected in the second quarter and the decline in output in the prior period was less steep than previously reported, bolstering views for a stronger performance in the last six months of the year.
Gross domestic product expanded at a 4.0 percent annual rate as activity picked up broadly after shrinking at a revised 2.1 percent pace in the first quarter, the Commerce Department said on Wednesday.
That pushed GDP above the economy’s potential growth trend, which analysts put somewhere between a 2 percent and 2.5 percent pace. Economists had forecast the economy growing at a 3.0 percent rate in the second quarter after a previously reported 2.9 percent contraction.
A separate report showing private employers added 218,000 jobs to their payrolls last month, a decline from June’s hefty gain of 281,000, did little to change perceptions the economy was strengthening.
U.S. stock futures added to gains and yields on U.S. Treasuries rose after the data. The U.S. dollar hit a seven-week high against the yen and an eight-month high against the euro.
The economy grew 0.9 percent in the first half of this year and growth for 2014 as a whole could average above 2 percent. The first quarter contraction, which was mostly weather-related, was the largest in five years.
Employment growth, which has exceeded 200,000 jobs in each of the last five months, and strong readings on the factory and services sectors from the Institute for Supply Management underpin the bullish expectations for the rest of the year.
The government also published revisions to prior GDP data going back to 1999, which showed the economy performing much stronger in the second half of 2013 and for that year as a whole than previously reported.
EYES ON THE FED
The GDP data, which was released only hours before Federal Reserve officials conclude a two-day policy meeting, could fuel debate on whether the central bank may need to raise interest rates a bit sooner than had been anticipated.
Growth in the second quarter was driven mainly by consumer spending and a swing in business inventories.
Consumer spending growth, which accounts for more than two-thirds of U.S. economic activity, accelerated at a 2.5 percent pace, as Americans bought long-lasting manufactured goods and spent a bit more on services.
Consumer spending had braked to a 1.2 percent pace in the first quarter because of weak healthcare spending.
Despite the pick-up in consumer spending, Americans saved more in the second quarter. The saving rate increased to 5.3 percent from 4.9 percent in the first quarter as incomes rose, which bodes well for future spending.
Inventories contributed 1.66 percentage points to GDP growth after chopping off 1.16 points in the first quarter.
The economy also received a boost from business investment, government spending and investment in home building.
Trade, however, was a drag for a second consecutive quarter as some of the increase in domestic demand was met by a surge in imports. Domestic demand rose at a 2.8 percent pace, the fastest since the third quarter of 2011. It increased at a 0.7 percent pace in the first quarter.
Solid demand, which underscores the economy’s firming fundamentals, led to some pick-up in price pressures in the second quarter, a welcome development for Fed officials who have long worried about inflation being too low.
A price index in the report rose at a 2.3 percent rate in the second quarter, the quickest in three years, after advancing at a 1.4 percent pace in the prior period.
A core price measure that strips out food and energy costs increased at a 2.0 percent pace, the fastest since the first quarter of 2012. It had increased at a 1.2 percent rate in the first quarter.
U.S. Second-Quarter GDP Expands at 4.0% Rate
Economy Grew at Best Six-Month Stretch in 10 Years in Second Half of 2013
By ERIC MORATH And NICK TIMIRAOS
he U.S. economy surged in the second quarter, more than offsetting a first-quarter contraction and putting growth back on an upward trajectory in 2014.
Gross domestic product, the broadest measure of goods and services produced across the economy, advanced at a seasonally adjusted annual rate of 4.0% in the second quarter, the Commerce Department said Wednesday. Economists surveyed by The Wall Street Journal had forecast growth at a 3.0% pace for the quarter.
An upturn in inventory building by businesses and an acceleration in consumer spending led the broad gains and offset a larger drag from increased imports.
The solid improvement comes on the heels of a first quarter when the economy shrank at a 2.1% pace. While still the worst quarter of the recovery that began in mid-2009, the first-quarter figure reflects an upward revision from a previously estimated 2.9% contraction.
Over the past year, the economy grew 2.4%—slightly ahead of the 2.3% average annual gain from recovery’s start until the end of 2013, before an unusually cold winter socked the economy.
The first quarter “was an anomaly and growth will be much stronger through the rest of this year,” said PNC Financial Services Group economist Stuart Hoffman. “Consumers are spending thanks to job and income gains, and with borrowing costs still low businesses are investing to meet stronger demand.”
Household spending—roughly two-thirds of the economy—advanced at a 2.5% rate last quarter. That’s an increase from the first quarter’s modest 1.2% gain. Spending on total goods accounted for its highest contribution to GDP since late 2010, and spending on long-lasting durable goods was near a five-year high, led by a big jump in auto sales.
Annual revisions, also released Wednesday, showed the economy expanded at a 4% pace in the second half of 2013, the best six-month stretch in 10 years. But figures over the past five years, including new revisions back to 2011, continue to tell a familiar tale. Unable to string together several quarters of steady growth, the recovery that began in 2009 is still the weakest since World War II.
There is reason to be guarded about last quarter’s rebound. The initial reading on GDP relies on estimates of trade flows, health-care spending and other aspects of the economy and could be significantly revised in subsequent takes.
The strong advance in consumption is at least partially payback for a cold winter to start the year. If weather gets the blame for a bad first quarter, it deserves some credit for the second.
The second quarter was also strongly aided by businesses restocking. The change in private inventories added 1.66 percentage points to growth during the quarter. The gain mirrors the strong buildup in inventories that helped propel growth in the second half of last year, and stands in contrast to the reversal that contributed to the first-quarter contraction.
Some economists said the inventory boost raised questions over whether the strong pace of growth in the second-quarter gain was sustainable. Real final sales, a measurement of GDP that excludes changes to inventories, expanded at a 2.3% pace in the second quarter. After accounting for the 1% contraction in the first quarter, sales rose by almost 0.7% in the first half of 2014. That suggests the inventory gain may have been “excessive,” said Chris Low, chief economist at FTN Financial, “as if business put a little too much faith in the bounce-back-from-bad-weather story.”
The report showed the personal consumption expenditure price index, the Federal Reserve’s preferred inflation gauge, advanced at an annualized 2.3% in the second quarter.
The reading, reflecting increased costs for food and gasoline, was above the Fed’s 2% inflation target during a quarter for the first time since early 2012. But from a year ago, consumer inflation is up a milder 1.6%.
On GDP, a Word of Caution on the RevisionsThere’s a reasonable chance the 4% 2Q GDP number will change. Consider what has happened to 1Q13. Growth was initially reported to be occurring at an annual rate of 2.5%, before being revised down to 1.8% and then 1.1%. Wednesday’s latest set of revisions brought that figure back to 2.7%. (firstname.lastname@example.org)
GDP Catches Up with Jobs Growth A strong rebound in 2Q economic growth resolves the discrepancy between recent weak GDP readings and strong job numbers, BNP Paribas economists write, adding the rebound bodes well for July jobs data out Friday. “We will get another solid payrolls print of around 225,000 on Friday,” the firm says. Still, BNP Paribas notes that an average growth rate of 1% in 1H shows the economy is far from achieving the 2.1% to 2.3% growth rate forecast by the Fed for this year. (email@example.com)
Market Talk is a stream of real-time news and market analysis that’s available on Dow Jones Newswires
Wednesday’s report also showed business spending on items such as equipment, buildings and intellectual property rose at a 5.5% pace from April to June. Spending on equipment increased at a 7% rate in the second quarter after declining in the first.
Residential fixed investment—spending on home building and improvements—increased at a 7.5% rate in the second quarter. The category had declined the prior two quarters. The decline that began last fall wasn’t actually due to a slowdown in home construction, but instead reflected a drop in brokers’ real-estate commissions after sales of previously owned homes slumped.
Trade was a drag on economic growth during the quarter despite a solid 9.5% increase in U.S. exports. That is because imports, which subtract from economic growth, rose 11.7%. Still, the number suggests renewed demand for foreign goods among U.S. consumers.
The government added to second-quarter growth. Government expenditures and investment rose at an 1.6% pace in the spring. Federal outlays fell for the seventh straight quarter but were more than offset by increased spending at the state and local level.
Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product
[Percent] Seasonally adjusted at annual rates
Last Revised on: July 30, 2014 – Next Release Date August 28, 2014
U.S. Economy Grew at 4% Rate in Second Quarter, Beating Expectations
“We made up some of the ground lost in the first three months of this year, but there’s nothing in today’s data to indicate that the economy is growing more strongly than it has for the past couple of years,” the Economic Policy Institute, a left-leaning nonprofit group focused on low- and middle-income workers, said in a release Wednesday.
More important economic data will be released this week. Besides the Labor Department’s latest figures on unemployment and payrolls to be announced Friday, the Federal Reserve’s policy-making committee continues meeting on Wednesday, with the central bank announcing its latest plans on Wednesday afternoon.
Stock market loses early gains…what’s up?
Stocks start up then move down. Why, you ask?
It’s a disappointing day so far…the S&P 500 rocketed up almost eight points at the open, but within a half hour began a slow but steady decent into negative territory. What happened?
First: On the strong Q2 GDP, up 4.0 percent, there were detractors the minute the report came out.
Read MoreSurging US growth pushes fledgling IPOs into the backseat
A lot of inventory building, some complained. But most felt the numbers didn’t change their outlook for the second half dramatically. Barclays is a good example: “We do not view the outperformance in this report as a signal that the outlook for growth has improved,” they said.
Second: There’s the inflation-fearing camp. Modest growth or not, many fear that interest rates could move dramatically on any sign the economy is putting together a consistent series of above-expectation economic stats.
Treasury yields are up this morning, and many are wondering if the Fed will make some comment about the possibility of a rate increase sooner than expectations (mid-to-late- 2015).
I’m not in that camp, but some are: Interest-rate sensitive stocks like Utilities, Telecom, Housing are all underperforming the market.
Third: There are continuing issues with the Ukraine. Reuters is reporting comments from NATO that the number of troops continue to increase along the Russian-Ukraine border.
Finally: Let’s drag out the “market is tired” argument and that it is long due for a 10 percent correction. Alan Greenspan, on a competing network this morning, said stocks were due for a “significant correction” at some point. Really, Mr. Greenspan? The market IS tired, but we have been hearing about a 10 percent correction for two years. Those that got out then, when the S&P was at 1400, are now watching stocks up 40 percent since then.
My take? Things are continuing to get better, but they are getting better at a very slow rate. And the data is still choppy. And that is good for the markets.
National Income and Product Accounts
Gross Domestic Product: Second Quarter 2014 (Advance Estimate)
Annual Revision: 1999 through First Quarter 2014
Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 4.0 percent in the second quarter of 2014,
according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter,
real GDP decreased 2.1 percent (revised).
The Bureau emphasized that the second-quarter advance estimate released today is based on
source data that are incomplete or subject to further revision by the source agency (see the box on page 3
and "Comparisons of Revisions to GDP" on page 10). The "second" estimate for the second quarter,
based on more complete data, will be released on August 28, 2014.
The increase in real GDP in the second quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed
investment, state and local government spending, and residential fixed investment. Imports, which are a
subtraction in the calculation of GDP, increased.
Annual Revision of the National Income and Product Accounts
The estimates released today reflect the results of the annual revision of the national income and
product accounts (NIPAs) in conjunction with the "advance" estimate of GDP for the second quarter of
2014. In addition to the regular revision of estimates for the most recent 3 years and the first quarter of
2014, GDP and select components were revised back to the first quarter of 1999 (see the Technical
Note). More information is available in "Preview of Upcoming NIPA Revision" in the May Survey of
Current Business and on BEA's Web site. The August Survey will contain an article describing the annual
revision in detail.
FOOTNOTE. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent
changes are calculated from unrounded data and are annualized. "Real" estimates are in chained (2009)
dollars. Price indexes are chain-type measures.
This news release is available on BEA's Web site along with the Technical Note
and Highlights related to this release.
Real GDP increased 4.0 percent in the second quarter, after decreasing 2.1 percent in the first.
This upturn in the percent change in real GDP primarily reflected upturns in private inventory
investment and in exports, an acceleration in PCE, an upturn in state and local government spending, an
acceleration in nonresidential fixed investment, and an upturn in residential fixed investment that were
partly offset by an acceleration in imports.
The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.9 percent in the second quarter, compared with an increase of 1.4 percent in the first.
Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent,
compared with an increase of 1.3 percent.
Real personal consumption expenditures increased 2.5 percent in the second quarter, compared
with an increase of 1.2 percent in the first. Durable goods increased 14.0 percent, compared with an
increase of 3.2 percent. Nondurable goods increased 2.5 percent; it was unchanged in the first quarter.
Services increased 0.7 percent in the second quarter, compared with an increase of 1.3 percent in the
Real nonresidential fixed investment increased 5.5 percent in the second quarter, compared with
an increase of 1.6 percent in the first. Investment in nonresidential structures increased 5.3 percent,
compared with an increase of 2.9 percent. Investment in equipment increased 7.0 percent, in contrast to
a decrease of 1.0 percent. Investment in intellectual property products increased 3.5 percent, compared
with an increase of 4.6 percent. Real residential fixed investment increased 7.5 percent, in contrast to a
decrease of 5.3 percent.
Real exports of goods and services increased 9.5 percent in the second quarter, in contrast to a
decrease of 9.2 percent in the first. Real imports of goods and services increased 11.7 percent,
compared with an increase of 2.2 percent.
Real federal government consumption expenditures and gross investment decreased 0.8 percent
in the second quarter, compared with a decrease of 0.1 percent in the first. National defense increased
1.1 percent, in contrast to a decrease of 4.0 percent. Nondefense decreased 3.7 percent, in contrast to an
increase of 6.6 percent. Real state and local government consumption expenditures and gross
investment increased 3.1 percent, in contrast to a decrease of 1.3 percent.
The change in real private inventories added 1.66 percentage points to the second-quarter change
in real GDP after subtracting 1.16 percentage points from the first-quarter change. Private businesses
increased inventories $93.4 billion in the second quarter, following increases of $35.2 billion in the first
quarter and $81.8 billion in the fourth quarter of 2013.
Real final sales of domestic product -- GDP less change in private inventories -- increased 2.3
percent in the second quarter, in contrast to a decrease of 1.0 percent in the first.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 4.5 percent in the second quarter, in contrast to a decrease of 0.4 percent in the
Disposition of personal income
Current-dollar personal income increased $208.0 billion in the second quarter, compared with an
increase of $176.6 billion in the first. The acceleration in personal income primarily reflected an upturn
in personal dividend income and a smaller decrease in farm proprietors' income that were partly offset
by a deceleration in wages and salaries.
Personal current taxes increased $15.2 billion in the second quarter, compared with an increase
of $24.4 billion in the first.
Disposable personal income increased $192.7 billion, or 6.2 percent, in the second quarter,
compared with an increase of $152.1 billion, or 4.9 percent, in the first. Real disposable personal
income increased 3.8 percent in the second quarter, compared with an increase of 3.5 percent in the first.
Personal outlays increased $138.8 billion in the second quarter, compared with an increase of
$76.1 billion in the first.
Personal saving -- disposable personal income less personal outlays -- was $682.9 billion in the
second quarter, compared with $629.0 billion in the first.
The personal saving rate -- personal saving as a percentage of disposable personal income -- was
5.3 percent in the second quarter, compared with 4.9 percent in the first. For a comparison of personal
saving in BEA's national income and product accounts with personal saving in the Federal Reserve
Board's financial accounts of the United States and data on changes in net worth, go to
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
6.0 percent, or $250.7 billion, in the second quarter to a level of $17,294.7 billion. In the first quarter,
current-dollar GDP decreased 0.8 percent, or $34.3 billion.
Information on the assumptions used for unavailable source data is provided in a technical note
that is posted with the news release on BEA's Web site. Within a few days after the release, a detailed
"Key Source Data and Assumptions" file is posted on the Web site. In the middle of each month, an
analysis of the current quarterly estimate of GDP and related series is made available on the Web site;
click on Survey of Current Business, "GDP and the Economy." For information on revisions, see
"Revisions to GDP, GDI, and Their Major Components."
Revisions for the first quarter of 2014
For the first quarter of 2014, real GDP is now estimated to have declined 2.1 percent; in the
previously published estimates, first-quarter GDP was estimated to have declined 2.9 percent. The 0.8-
percentage point upward revision to the percent change in first-quarter real GDP primarily reflected
upward revisions to private inventory investment, to nonresidential fixed investment, and to PCE.
Previous Estimate Revised
Real GDP............................... -2.9 -2.1
Current-dollar GDP..................... -1.7 -0.8
Real GDI............................... -2.6 -0.7
Gross domestic purchases price index... 1.3 1.4
Revision of the National Income and Product Accounts
The revised estimates reflect the results of the annual revision of the national income and product
accounts (NIPAs). In addition to the regular revision of estimates for the most recent 3 years and the
first quarter of 2014, this "flexible" annual revision results in revisions to current-dollar GDP beginning
with the first quarter of 1999. The reference year remains 2009. When the estimates for the reference
year (2009) are revised, the levels of the related index numbers and chained-dollar estimates are also
revised for the entire historical period; revisions to percent changes before the first quarter of 1999 are
small and mostly due to rounding.
Because of the additional data shown, tables 3, 11, and 12 of this release are each divided into
two separate tables -- 3A and 3B, 11A and 11B, and 12A and 12B. There are also a number of special
tables that compare the revised and previously published statistics for select periods:
* Table 1A shows the percent change in real GDP and related measures; table 1B shows revisions
to current-dollar GDP, to national income, and to personal income; table 2A shows contributions
to the percent change in real GDP; and table 4A shows the percent change in the chain-type price
indexes for GDP and related measures.
* Tables 7A and 7B show annual levels, percent changes, and revisions to percent changes for
current-dollar GDP and for real (chained-dollar) GDP, respectively.
* Table 12C shows revisions to corporate profits by industry.
With the release of the annual revision, statistics for select NIPA tables will be available on
BEA's Web site (www.bea.gov). Shortly after the GDP release, BEA will post a table on its Web site
showing the major current-dollar revisions and their sources for each component of GDP, national
income, and personal income. Additionally, the August 2014 Survey of Current Business will contain an
article describing these revisions. That issue will also contain an analysis of the current quarterly
estimate of GDP and related series ("GDP and the Economy").
Revisions to real GDP
For this annual revision, the most notable revisions are generally limited to the period from 2011
through the first quarter of 2014 and largely reflect the incorporation of newly available and revised
source data for the underlying components (see the box below). The revisions for earlier periods are
* For 2011–2013, real GDP increased at an average annual rate of 2.0 percent; in the previously
published estimates, real GDP had increased at an average annual rate of 2.2 percent. From the
fourth quarter of 2010 to the first quarter of 2014, real GDP increased at an average annual rate
of 1.8 percent, the same rate as in the previously published estimates.
* The percent change in real GDP was revised down 0.2 percentage point for 2011, was revised
down 0.5 percentage point for 2012, and was revised up 0.3 percentage point for 2013.
o For 2011, the largest contributors to the downward revision to the percent change in real
GDP were a downward revision to personal consumption expenditures (PCE) and an
upward revision to imports.
o For 2012, the largest contributors to the downward revision were downward revisions to
PCE and to state and local government spending.
o For 2013, the largest contributors to the upward revision were upward revisions to PCE
and to state and local government spending; these revisions were partly offset by a
downward revision to private inventory investment.
* The revisions to the annual estimates for 2012 and 2013 reflect partly offsetting revisions to the
quarters within the year. For 2012, the annual rate of change in GDP was revised down 1.4
percentage points for the first quarter and was revised down 0.3 percentage point for the third
quarter, while the growth rate for the second quarter was revised up 0.4 percentage point; the
growth rate for the fourth quarter was unrevised. The upward revision to the percent change in
real GDP for 2013 reflects upward revisions to the first, third, and fourth quarters that were
partly offset by a downward revision to the second quarter.
* For the first quarter of 2011 through the first quarter of 2014, the average revision (without
regard to sign) to the percent change in real GDP was 0.6 percentage point. The revisions did
not change the direction of the change in real GDP (increase or decrease) for any of the quarters.
* For the expansion from the second quarter of 2009 to the first quarter of 2014, real GDP
increased at an average annual rate of 2.1 percent, the same rate as in the previously published
* Current-dollar GDP was revised down for all 3 years: $15.9 billion, or 0.1 percent, for 2011;
$81.4 billion, or 0.5 percent, for 2012; and $31.6 billion, or 0.2 percent, for 2013.
Revisions to price measures
* Gross domestic purchases -- From the fourth quarter of 2010 to the first quarter of 2014, the
average annual rate of increase in the price index for gross domestic purchases was revised up
from 1.6 percent to 1.7 percent.
* Personal consumption expenditures -- From the fourth quarter of 2010 to the first quarter of
2014, the average annual rate of increase in the price index for PCE was 1.7 percent, the same
rate as in the previously published estimates; the increase in the "core" PCE price index (which
excludes food and energy) was revised up from 1.5 percent to 1.6 percent.
Revisions to income and saving measures
* National income was revised down $43.4 billion, or 0.3 percent, for 2011, was revised up $97.9
billion, or 0.7 percent, for 2012, and was revised up $34.7 billion, or 0.2 percent, for 2013.
o For 2011, downward revisions to corporate profits and to nonfarm proprietors' income
were partly offset by an upward revision to net interest.
o For 2012, upward revisions to net interest, to nonfarm proprietors' income, and to
corporate profits were partly offset by a downward revision to supplements to wages and
o For 2013, upward revisions to nonfarm proprietors' income and to net interest were partly
offset by downward revisions to farm proprietors' income and to wages and salaries.
* Corporate profits was revised down $61.1 billion, or 3.3 percent, for 2011, was revised up $13.3
billion, or 0.7 percent, for 2012, and was revised up $4.8 billion, or 0.2 percent, for 2013.
* Personal income was revised up $10.7 billion, or 0.1 percent, for 2011, was revised up $143.9
billion, or 1.0 percent, for 2012, and was revised up $32.2 billion, or 0.2 percent, for 2013.
* For 2011–2013, the average annual rate of growth of real disposable personal income was
revised up 0.1 percentage point from 1.7 percent to 1.8 percent.
* The personal saving rate (personal saving as a percentage of disposable personal income) was
revised up from 5.7 percent to 6.0 percent for 2011, was revised up from 5.6 percent to 7.2
percent for 2012, and was revised up from 4.5 percent to 4.9 percent for 2013.
Gross domestic income (GDI) and the statistical discrepancy
* For 2011–2013, real GDI increased at an average annual rate of 2.6 percent; in the previously
published estimates, real GDI had increased at an average annual rate of 2.5 percent. From the
fourth quarter of 2010 to the first quarter of 2014, real GDI increased at an average annual rate of
2.2 percent; in the previously published estimates, real GDI had increased at an average annual
rate of 2.1 percent.
* The statistical discrepancy is current-dollar GDP less current-dollar GDI. GDP measures final
expenditures -- the sum of consumer spending, private investment, net exports, and government
spending. GDI measures the incomes earned in the production of GDP. In concept, GDP is
equal to GDI. In practice, they differ because they are estimated using different source data and
* As a result of the annual revision, the statistical discrepancy as a percentage of GDP was revised
up from -0.3 percent to -0.2 percent for 2011, was revised down from -0.1 percent to -1.3 percent
for 2012, and was revised down from -0.8 percent to -1.3 percent for 2013.
New and revised source data
This annual revision incorporated data from the following major federal statistical sources:
Source Data Agency Data Years Covered by Data and
Vintage of Data
Census Bureau Annual surveys of merchant wholesale trade 2011 (revised)
Annual surveys of retail trade 2012 (new)
Monthly indicators of manufactures, merchant wholesale
trade, and retail trade 2011–2013 (revised)
Service annual survey 2011 and 2012 (revised)
Annual surveys of state and local government finances Fiscal year (FY) 2011 (revised)
FY 2012 (new)
Monthly survey of construction spending (value put in
place) 2011–2013 (revised)
Quarterly services survey 2011–2013 (revised)
Current population survey/housing vacancy survey 2011 and 2012 (revised)
Office of Management and
Budget Federal Budget FY 2013 and 2014 (revised)
Internal Revenue Service Tabulations of tax returns for corporations 2011 (revised) 2012 (new)
Tabulations of tax returns for sole proprietorships and
partnerships 2012 (new)
BLS Quarterly census of employment and wages 2011–2013 ( revised)
Survey of occupational employment 2012 (new)
Department of Agriculture Farm statistics 2011–2013 (revised)
BEA International transactions accounts 1999–2013 (revised)
Changes in methodology and presentation
The annual revision also incorporated improvements to estimating methodologies and to the
presentation of the NIPA estimates, including the following:
* Beginning with the estimates for 1999, the presentation of foreign transactions in the NIPAs is
changed to reflect the comprehensive restructuring of BEA's international transactions accounts
(ITAs), released in June. The new presentation of both goods and services in the foreign
transactions tables is consistent with the corresponding items in the ITAs. The definition of
exports and imports of travel is broadened to include travel for health and for education and
expenditures by short-term workers; these services had previously been included in the exports
and imports of "other" private services. The new presentation of foreign transactions enhances
the quality and the usefulness of BEA's international accounts statistics and brings them into
closer alignment with new international statistical guidelines.
* The presentation of the pension sector is expanded to include a table of transactions of defined
contribution pension plans and a table that presents transactions of both defined benefit and
defined contribution pension plans. (Tables presenting the transactions associated with defined
benefit pension plans were introduced in last year's comprehensive revision.)
* * *
BEA's national, international, regional, and industry estimates; the Survey of Current Business;
and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting
the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.
* * *
Next release -- August 28, 2014 at 8:30 A.M. EDT for:
Gross Domestic Product: Second Quarter 2014 (Second Estimate)
Corporate Profits: Second Quarter 2014 (Preliminary Estimate)
Comparisons of Revisions to GDP
Quarterly estimates of GDP are released on the following schedule: the "advance" estimate, based on
source data that are incomplete or subject to further revision by the source agency, is released near the end of the
first month after the end of the quarter; as more detailed and more comprehensive data become available,
the "second" and "third" estimates are released near the end of the second and third months, respectively.
The "latest"” estimate reflects the results of both annual and comprehensive revisions.
Annual revisions, which generally cover the quarters of the 3 most recent calendar years, are usually carried
out each summer and incorporate newly available major annual source data. Comprehensive (or benchmark)
revisions are carried out at about 5-year intervals and incorporate major periodic source data, as well as
improvements in concepts and methods that update the accounts to portray more accurately the evolving U.S.
The table below shows comparisons of the revisions between quarterly percent changes of current-dollar
and of real GDP for the different vintages of the estimates. From the advance estimate to the second estimate (one
month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while from the
advance estimate to the third estimate (two months later), it is 0.6 percentage point. From the advance estimate to
the latest estimate, the average revision without regard to sign is 1.3 percentage points. The average revision
(with regard to sign) from the advance estimate to the latest estimate is 0.3 percentage point, which is larger
than the average revisions from the advance estimate to the second or to the third estimates. The larger average
revisions to the latest estimate reflect the fact that comprehensive revisions include major improvements, such as
the incorporation of BEA’s latest benchmark input-output accounts. The quarterly estimates correctly indicate the
direction of change of real GDP 97 percent of the time, correctly indicate whether GDP is accelerating or
decelerating 72 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend
growth more than four-fifths of the time.
Revisions Between Quarterly Percent Changes of GDP: Vintage Comparisons
Vintages Average Average without Standard deviation of
compared regard to sign revisions without
regard to sign
Advance to second.................... 0.2 0.5 0.4
Advance to third..................... .2 .7 .4
Second to third...................... .0 .3 .2
Advance to latest.................... .3 1.3 1.0
Advance to second.................... 0.1 0.5 0.4
Advance to third..................... .1 .6 .4
Second to third...................... .0 .2 .2
Advance to latest.................... .3 1.3 1.0
NOTE. These comparisons are based on the period from 1983 through 2010.
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