Technical Note

The tables in this note are available in an XLS spreadsheet, and the entire note is available in PDF format.

                         Technical Note
                     Gross Domestic Product
                First Quarter of 2005 (Advance)
                         April 28, 2005
                                

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 first
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 ("The
Business Situation").  

Source Data for the Advance Estimate
     
The advance GDP estimate for the first quarter of 2005 is based on
source data that are incomplete and subject to revision.  Three months
of source data were available for consumer spending on goods;
shipments of capital equipment other than aircraft; motor vehicle sales
and inventories; manufacturing durables inventories; federal
government outlays; and consumer, producer, and international prices.
Only two months of data were available for most other key data
sources; BEA's assumptions for the third month are shown in table A. 
Among those assumptions are the following:

          an increase in nondurable manufacturing inventories,
          an increase in non-motor-vehicle merchant wholesale and retail
     inventories,
          an increase in exports of goods, excluding gold, and a somewhat
     larger increase in imports of goods, excluding gold, resulting in a
     deterioration in the trade balance.

Estimates of consumer spending for goods and of inventory investment
reflected Census retail sales and retail and wholesale inventories data
that were benchmarked to the annual retail and wholesale trade
surveys. These data were incorporated on a best-change basis.
 
Prices

The price index for gross domestic purchases increased 3.0 percent in
the first quarter after increasing 2.9 percent in the fourth. Excluding food
and energy prices, the price index for gross domestic purchases
increased 3.1 percent after increasing 2.0 percent. About 0.2
percentage point of the first-quarter increase in the index was
accounted for by the pay raise for federal civilian and military personnel,
which is treated as an increase in the price of employee services
purchased by the federal government.


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