GDP report - 8:30am

Full report here GROSS DOMESTIC PRODUCT: SECOND QUARTER (SECOND ESTIMATE) CORPORATE PROFITS: SECOND QUARTER (PRELIMINARY ESTIMATE) Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 1.0 percent in the second quarter of 2009, (that is, from the first quarter to the second quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 6.4 percent. The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the decrease in real GDP was also 1.0 percent (see "Revisions" on page 3). The decrease in real GDP in the second quarter primarily reflected negative contributions from private inventory investment, nonresidential fixed investment, personal consumption expenditures (PCE), residential fixed investment, and exports that were partly offset by positive contributions from federal government spending and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased. The much smaller decrease in real GDP in the second quarter than in the first primarily reflected much smaller decreases in nonresidential fixed investment and in exports, an upturn in federal government spending, smaller decreases in private inventory investment and residential fixed investment, and an upturn in state and local government spending that were partly offset by a much smaller decrease in imports and a downturn in PCE. Motor vehicle output added 0.20 percentage point to the second-quarter change in real GDP after subtracting 1.69 percentage points from the first-quarter change. Final sales of computers subtracted 0.05 percentage point from the second-quarter change in real GDP after adding 0.06 percentage point to the first-quarter change. ________________________ FOOTNOTE.--Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized. “Real” estimates are in chained (2005) dollars. Price indexes are chain-type measures. This news release is available on BEA’s Web site along with the Technical Note and Highlights related to this release. ________________________ The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.5 percent in the second quarter, 0.2 percentage point less than in the advance estimate; this index decreased 1.4 percent in the first quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 0.8 percent in the second quarter, compared with an increase of 0.2 percent in the first. Real personal consumption expenditures decreased 1.0 percent in the second quarter, in contrast to an increase of 0.6 percent in the first. Real nonresidential fixed investment decreased 10.9 percent, compared with a decrease of 39.2 percent. Nonresidential structures decreased 15.1 percent, compared with a decrease of 43.6 percent. Equipment and software decreased 8.4 percent, compared with a decrease of 36.4 percent. Real residential fixed investment decreased 22.8 percent, compared with a decrease of 38.2 percent. Real exports of goods and services decreased 5.0 percent in the second quarter, compared with a decrease of 29.9 percent in the first. Real imports of goods and services decreased 15.1 percent, compared with a decrease of 36.4 percent. Real federal government consumption expenditures and gross investment increased 11.0 percent in the second quarter, in contrast to a decrease of 4.3 percent in the first. National defense increased 13.3 percent, in contrast to a decrease of 5.1 percent. Nondefense increased 6.2 percent, in contrast to a decrease of 2.5 percent. Real state and local government consumption expenditures and gross investment increased 3.6 percent, in contrast to a decrease of 1.5 percent. The change in real private inventories subtracted 1.39 percentage points from the second-quarter change in real GDP, after subtracting 2.36 percentage points from the first-quarter change. Private businesses decreased inventories $159.2 billion in the second quarter, following decreases of $113.9 billion in the first and $37.4 billion in the fourth. Real final sales of domestic product -- GDP less change in private inventories -- increased 0.4 percent in the second quarter, in contrast to a decrease of 4.1 percent in the first. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- decreased 2.5 percent in the second quarter, compared with a decrease of 8.6 percent in the first. Gross national product Real gross national product -- the goods and services produced by the labor and property supplied by U.S. residents -- decreased 0.8 percent in the second quarter, compared with a decrease of 6.6 percent in the first. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $6.4 billion in the second quarter after decreasing $6.1 billion in the first; in the second quarter, receipts decreased $16.8 billion, and payments decreased $23.2 billion. Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services -- decreased 1.0 percent, or $34.7 billion, in the second quarter to a level of $14,143.3 billion. In the first quarter, current-dollar GDP decreased 4.6 percent, or $169.3 billion. Revisions The “second” estimate of the second-quarter decrease in real GDP is the same as the advance estimate. Upward revisions to exports, residential fixed investment, PCE, and government spending were offset by downward revisions to private inventory investment and to nonresidential fixed investment. Advance Estimate Second Estimate (Percent change from preceding quarter) Real GDP............................... -1.0 -1.0 Current-dollar GDP..................... -0.8 -1.0 Gross domestic purchases price index... 0.7 0.5 Corporate Profits Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $67.6 billion in the second quarter, compared with an increase of $59.1 billion in the first quarter. Current-production cash flow (net cash flow with inventory valuation adjustment) -- the internal funds available to corporations for investment -- decreased $26.9 billion in the second quarter, in contrast to an increase of $16.2 billion in the first. Taxes on corporate income increased $40.8 billion in the second quarter, compared with an increase of $47.0 billion in the first. Profits after tax with inventory valuation and capital consumption adjustments increased $26.8 billion in the second quarter, compared with an increase of $12.0 billion in the first. Dividends decreased $47.0 billion compared with a decrease of $51.8 billion; current-production undistributed profits increased $73.8 billion, compared with an increase of $63.7 billion. Domestic profits of financial corporations increased $39.7 billion in the second quarter, compared with an increase of $115.9 billion in the first. Domestic profits of nonfinancial corporations increased $28.4 billion in the second quarter, in contrast to a decrease of $40.2 billion in the first. In the second quarter, real gross value added of nonfinancial corporations decreased, and profits per unit of real value added increased. The increase in unit profits reflected decreases in unit labor and nonlabor costs that more than offset a decrease in unit prices. The rest-of-the-world component of profits decreased $0.6 billion in the second quarter, compared with a decrease of $16.6 billion in the first. This measure is calculated as (1) receipts by U.S. residents of earnings from their foreign affiliates plus dividends received by U.S. residents from unaffiliated foreign corporations minus (2) payments by U.S. affiliates of earnings to their foreign parents plus dividends paid by U.S. corporations to unaffiliated foreign residents. The second-quarter decrease was accounted for by a larger decrease in receipts than in payments. Profits before tax increased $114.4 billion in the second quarter, compared with an increase of $186.4 billion in the first. The before-tax measure of profits does not reflect, as does profits from current production, the capital consumption and inventory valuation adjustments. These adjustments convert depreciation of fixed assets and inventory withdrawals reported on a tax-return, historical-cost basis to the current-cost measures used in the national income and product accounts. The capital consumption adjustment increased $16.1 billion in the second quarter (from -$144.9 billion to -$128.8 billion), in contrast to a decrease of $69.3 billion in the first. The inventory valuation adjustment decreased $62.9 billion (from $81.1 billion to $18.2 billion), compared with a decrease of $58.1 billion.