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 Survey of Current
Business, BEA’s online monthly journal, will publish a more detailed analysis of the
estimates (“GDP and the Economy”).


Sources of Revision to Real GDP

Real GDP increased 0.8 percent (annual rate) in the first quarter of 2016, an upward revision
of 0.3 percentage point from the advance estimate. The revision reflected upward revisions to
private inventory investment, to residential fixed investment, and to exports and a downward
revision to imports.

*	The upward revision to inventory investment reflected upward revisions to retail trade,
        manufacturing, and wholesale trade industries based on newly available Census inventory
        data for March and revised data for January and February. Benchmarked Census
        inventories data for retail and wholesale trade and for manufacturing were incorporated
        on a best-change basis.
*	The upward revision to residential fixed investment was mostly accounted for by an
        upward revision to multifamily structures based on newly available Census construction
        spending data for March and revised data for January and February.
*	The upward revision to exports was primarily to goods. The largest contributors to the
        revision were “other” goods (primarily the territorial adjustment, reflecting newly
        available Census Bureau data for March) and “consumer goods, except food and
        automotive” (reflecting revised Census data on trade in goods for February and March).
*	The downward revision to imports was primarily to goods and reflected revised Census
        data on trade in goods for March, including newly available quantity data and unit-value
        indexes for imports of petroleum products.

The price index for personal consumption expenditures increased 0.3 percent in the first
quarter, the same as in the advance estimate.


Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI), which measures the output of the economy as the costs
incurred and the incomes earned in the production of GDP, increased 2.2 percent in the first
quarter. For a given quarter, the estimates of GDP and GDI may differ for a variety of
reasons, including the incorporation of largely independent source data. However, over
longer time spans, the estimates of GDP and GDI tend to follow similar patterns of change.
The average of real GDP and real GDI increased 1.5 percent.

Profits from current production increased $6.5 billion, or 0.3 percent (quarterly rate), in the first
quarter.  Domestic profits of financial corporations decreased $2.0 billion, domestic profits of
nonfinancial corporations increased $45.7 billion, and rest-of-the-world profits decreased $37.3
billion.

Revisions to Wages and Salaries, Disposable Personal Income, and GDI

In addition to presenting revised estimates for the first quarter, today's release presents
revised estimates of fourth-quarter wages and salaries, personal taxes, and contributions for
government social insurance. Wages and salaries are now estimated to have increased
$125.5 billion in the fourth quarter of 2015, an upward revision of $43.8 billion. These
estimates reflect the most recently available wage and salary tabulations for the fourth quarter
from the BLS quarterly census of employment and wages.

Real disposable personal income is now estimated to have increased 3.3 percent (annual
rate) in the fourth quarter and 4.0 percent in the first. (By comparison, the estimates that
were available last month showed increases of 2.3 percent in the fourth quarter and 2.9
percent in the first.)

The revision to fourth-quarter wages and salaries also resulted in a revision to gross
domestic income (GDI). Real GDI is now estimated to have increased 1.9 percent in the
fourth quarter, an upward revision of 1.0 percentage point.

Annual Revision Scheduled for July 29

The annual revision of the national income and product accounts will be released along with
the “advance” estimate of GDP for the second quarter of 2016 on July 29. GDP will be revised
for the most recent 3 years (2013 through 2015) and for the first quarter of 2016. For more
information, see “Preview of the Upcoming Annual NIPA Revision” included in the May Survey
of Current Business article on “GDP and the Economy”. The August Survey will contain an
article that describes the results.

Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(301) 278-9606


                                 

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