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Technical Note
The tables in this note are available in an XLS spreadsheet, and the entire note is available in PDF format
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Technical Note
Gross Domestic Product
Second Quarter of 2005 (Advance)
July 29, 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 second 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 second 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. The following assumptions were made for the third month of the
quarter:
. an increase in nondurable manufacturing inventories,
. an increase in non-motor-vehicle merchant wholesale and retail inventories,
. a decrease in exports of goods, excluding gold, and
. an increase in imports of goods, excluding gold.
Annual Revision, 2002-2005
Today's GDP news release presents results from the regular annual revision of the
national income and product accounts. This year's revision, as usual, covers the
estimates from the most recent three years. The revision incorporates source data that
are more complete, more detailed, and otherwise more reliable than those previously
available. A detailed discussion of the results will be published in the August issue of
the Survey.
In general, revisions to year-to-year GDP growth rates were small: none exceeded 0.3
percentage point. For 2001-2004, real GDP grew at an average annual rate of 2.8
percent, compared with the previously published estimate of 3.1 percent. For 2001-
2004:
. real personal consumption expenditures grew at an average annual rate of
3.2 percent, compared with the previously published estimate of 3.4 percent;
the downward revisions were to both goods and services, reflecting data from
the Census Bureau's Annual Retail Trade Survey for 2003 and the American
Housing Survey for 2003;
. real nonresidential fixed investment increased at an average annual rate of
0.2 percent, compared with the previously published estimate of 1.3 percent;
the downward revisions were primarily to computers and to communications
equipment, reflecting data from the Census Bureau's Annual Survey of
Manufactures for 2003, and to software, reflecting preliminary data from the
Census Bureau's Services Annual Survey for 2004;
. real residential investment increased at an average annual rate of 7.8
percent, compared with the previously published estimate of 7.7 percent;
. real inventories of private businesses increased $83.7 billion, compared with
the previously published estimate of $77.4 billion;
. real exports increased at an average annual rate of 2.5 percent, compared
with the previously published estimate of 2.6 percent; real imports increased
at an average annual rate of 6.2 percent, compared with the previously
published estimate of 5.9 percent; the revisions to imports were primarily to
services, reflecting the annual revision of BEA's international transactions
accounts that was released in June;
. real government consumption expenditures and gross investment increased
at an average annual rate of 3.1 percent, compared with the previously
published estimate of 3.0 percent.
The revisions to the quarterly growth rates of GDP also were small.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606
Table A. KEY ASSUMPTIONS FOR THE ADVANCE ESTIMATE OF GDP
FOR THE SECOND QUARTER OF 2005
For many of the key series used to prepare the advance estimate of GDP, including retail sales,
unit automobile and truck sales and inventories, manufacturers' shipments of nondefense
capital goods (other than aircraft), manufacturers' inventories of durable goods, federal defense
spending, and consumer, producer, and international price indexes, actual data are available for all
months of the quarter.
For the key series shown in this table, actual data for the third month of the quarter usually are not
available in time for inclusion in the advance GDP estimate. BEA makes assumptions for the source
data that are not yet available; assumptions for June 2005 are shown in the last column of the
table. For most series shown, the data for May are preliminary and subject to further revision.
Occasionally, the data for earlier months are also subject to revision.
All series shown in the table are in billions of dollars, seasonally adjusted at annual rates, and are
published by the Bureau of the Census.
2005
Jan. Feb. Mar. Apr. May Jun.*
Private fixed investment:
Nonresidential structures:
1 Value of new total private
construction put in place less
residential (inc. improvements)... 243.3 242.1 244.3 245.8 241.9 243.9
Equipment and software:
2 Manufacturers' shipments of
complete aircraft................. 27.2 19.2 24.6 39.8 25.5 26.7
Residential structures:
Value of new residential
construction put in place:
3 Single family....................... 396.2 402.1 404.5 404.7 406.9 409.6
4 Multifamily......................... 44.5 44.5 43.5 44.1 43.7 44.0
Change in private inventories:
5 Change in inventories for nondurable
manufacturing....................... 29.8 9.7 17.7 -1.2 -8.6 3.5
5a Change in inventories for merchant
wholesale and retail industries other
than motor vehicles and equipment... 58.8 48.4 40.9 28.8 24.6 36.3
Net exports:
Exports of goods:
6 U.S. exports of goods,
international-transactions-
accounts basis..................... 859.1 848.6 858.4 894.7 894.0 884.9
6a Excluding gold........................ 853.3 844.4 851.9 889.3 888.6 879.4
Imports of goods:
7 U.S. imports of goods,
international-transactions-
accounts basis...................... 1611.5 1625.5 1565.1 1642.4 1623.1 1635.8
7a Excluding gold........................ 1607.9 1621.6 1561.0 1638.5 1618.9 1631.6
8 Net exports of goods...................... -752.4 -776.9 -706.7 -747.8 -729.1 -750.9
8a Excluding gold........................ -754.6 -777.2 -709.1 -749.3 -730.4 -752.2
Government:
State and local:
Structures:
9 Value of new construction put
in place........................... 212.9 222.6 224.9 226.6 230.4 228.5
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*Assumption.
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