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 of 2015 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 1.4 percent (annual rate) in the fourth quarter, an upward revision 
of 0.4 percentage point from the second estimate. The revision to real GDP primarily 
reflected upward revisions to consumer spending and to exports that were partly offset 
by a downward revision to inventory investment.

*	The upward revision to consumer spending was primarily to services (notably, to 
        recreation and transportation services) and mostly reflected newly available 
        Census Bureau quarterly services survey data for the fourth quarter.
*	The upward revision to exports reflected upward revisions to both services and 
        goods. The revision to services reflected upward revisions to "other" business 
        services and to travel, and the revision to goods reflected an upward revision to 
        "other" goods. The revisions were based on fourth-quarter data from the 
        international transactions accounts.
*	The downward revision to inventory investment reflected downward revisions to 
        manufacturing and retail trade industries, based on revised Census inventory 
        data for December.

The price index for personal consumption expenditures increased 0.3 percent in the 
fourth quarter, a downward revision of 0.1 percentage point from the second estimate.


Gross Domestic Income and Corporate Profits

Real gross domestic income (GDI), which measures the value of the production of goods 
and services in the United States as the costs incurred and the incomes earned in 
production, increased 0.9 percent in the fourth quarter, following a 2.0 percent increase 
in the third quarter.
  
Profits from current production decreased $159.6 billion, or 7.8 percent (quarterly rate), 
in the fourth quarter, compared with a decrease of $33.0 billion, or 1.6 percent, in the 
third. In the fourth quarter, profits of domestic financial corporations decreased $24.0 
billion, profits of domestic nonfinancial corporations decreased $129.2 billion, and rest-
of-the-world profits decreased $6.5 billion.

The estimate of nonfinancial corporate profits in the fourth quarter was reduced by a 
$20.8 billion ($83.2 billion at an annual rate) settlement between a U.S. subsidiary of BP, 
the federal government, and the five states that were most affected by the 2010 oil spill 
in the Gulf of Mexico. The settlement was recorded in the national income and product 
accounts (NIPAs) as a business current transfer payment to government; the estimate of 
GDI was not affected by the settlement. The NIPAs record these types of settlements on 
an accrual basis in the quarter when the settlement is finalized, which is not necessarily 
the same quarter when the charges are recorded on a company's own financial 
statements. For more information, see the FAQ, "What caused the large increase to 
government current transfer receipts from business in the fourth quarter of 2015?"


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

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