*See the navigation bar at the right side of the technical note text for supplementary materials.
Technical Note
Gross Domestic Product
Fourth Quarter of 2015 (Second Estimate)
February 26, 2016
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 fourth 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 1.0 percent (annual rate) in the fourth quarter of 2015, an upward
revision of 0.3 percentage point from the advance estimate. The revision reflected an upward
revision to private inventory investment and a downward revision to imports that were partly
offset by downward revisions to state and local government spending and to consumer
spending.

*	The largest contributors to the upward revision to inventory investment were retail trade
        and mining, utilities, and construction. The revision reflected an upward revision to the
        "inventory valuation adjustment" (IVA), which is the difference between the historical
        costs at which businesses value their inventories and the current costs that are used for
        measuring the contribution of inventories to GDP during the quarter. The revisions to the
        IVA reflected revisions to the end-of-period and average prices used in the inventory
        investment calculation. The estimates incorporated newly available source data,
        primarily BLS producer price indexes for January 2016, which replaced BEA estimates of
        prices that were developed for the advance estimate.
*	The downward revision to imports was primarily accounted for by a downward revision
        to goods imports. Within goods, the largest contributors were "other" goods (primarily
        the territorial adjustment, reflecting newly available Census Bureau data for December)
        and industrial supplies and materials (reflecting revised Census data on trade in goods
        for November and December).
*	The downward revision to state and local government spending was primarily to
        investment in structures, based on newly available Census construction spending data
        for December and revised data for October and November.
*	The downward revision to consumer spending was more than accounted for by goods.
        The largest contributors to the revision were gasoline and other energy goods
        (reflecting updated data from the Energy Information Administration), clothing and
        footwear (reflecting revised consumer price indexes from BLS), and new motor vehicles
        (reflecting newly available registrations data for December).

The price index for personal consumption expenditures increased 0.4 percent in the fourth
quarter, an upward revision of 0.3 percentage point from the advance estimate. The revision
was primarily to goods and reflected revised BLS seasonally adjusted consumer price
indexes.


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

In addition to presenting revised estimates for the fourth quarter, today's release presents
revised estimates of third-quarter wages and salaries, personal taxes, and contributions for
government social insurance. Wages and salaries are now estimated to have increased $78.2
billion in the third quarter of 2015, a downward revision of $25.8 billion. These estimates
reflect the most recently available wage and salary tabulations for the third quarter from the
BLS quarterly census of employment and wages.

Real disposable personal income is now estimated to have increased 3.2 percent (annual
rate) in the third quarter and 2.5 percent in the fourth. (By comparison, the estimates that
were available last month showed increases of 3.8 percent in the third quarter and 3.2
percent in the fourth.)

The revision to third-quarter wages and salaries also resulted in a revision to gross domestic
income (GDI). Real GDI is now estimated to have increased 2.0 percent in the third quarter,
a downward revision of 0.7 percentage point.


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