Bloomberg News

U.S. Third Quarter Third Gross Domestic Product (Text)

December 20, 2013

Following is the text of the Gross Domestic Product report from the Commerce Department.

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 4.1 percent in the third quarter of 2013 (that is, from the second quarter to the third quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.5 percent.

The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued on December 5, 2103. In the second estimate, the increase in real GDP was 3.6 percent (see “Revisions” on page 3). With this third estimate for the third quarter, increases in personal consumption expenditures (PCE) and in nonresidential fixed investment were larger than previously estimated.

The increase in real GDP in the third quarter primarily reflected positive contributions from private inventory investment, PCE, nonresidential fixed investment, exports, residential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP growth in the third quarter primarily reflected an acceleration in private inventory investment, a deceleration in imports, and accelerations in state and local government spending and in PCE that were partly offset by a deceleration in exports.

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 (2009) dollars. Price indexes are chain-type measures.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.8 percent in the third quarter, the same increase as in the second estimate; this index increased 0.2 percent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.5 percent in the third quarter, compared with an increase of 0.8 percent in the second.

Real personal consumption expenditures increased 2.0 percent in the third quarter, compared with an increase of 1.8 percent in the second. Durable goods increased 7.9 percent, compared with an increase of 6.2 percent. Nondurable goods increased 2.9 percent, compared with an increase of 1.6 percent. Services increased 0.7 percent, compared with an increase of 1.2 percent.

Real nonresidential fixed investment increased 4.8 percent in the third quarter, compared with an increase of 4.7 percent in the second. Nonresidential structures increased 13.4 percent, compared with an increase of 17.6 percent. Equipment increased 0.2 percent, compared with an increase of 3.3 percent. Intellectual property products increased 5.8 percent, in contrast to a decrease of 1.5 percent. Real residential fixed investment increased 10.3 percent, compared with an increase of 14.2 percent.

Real exports of goods and services increased 3.9 percent in the third quarter, compared with an increase of 8.0 percent in the second. Real imports of goods and services increased 2.4 percent, compared with an increase of 6.9 percent.

Real federal government consumption expenditures and gross investment decreased 1.5 percent in the third quarter, compared with a decrease of 1.6 percent in the second. National defense decreased 0.5 percent, compared with a decrease of 0.6 percent. Nondefense decreased 3.1 percent, the same decrease as in the second quarter. Real state and local government consumption expenditures and gross investment increased 1.7 percent, compared with an increase of 0.4 percent.

The change in real private inventories added 1.67 percentage points to the third-quarter change in real GDP, after adding 0.41 percentage point to the second-quarter change. Private businesses increased inventories $115.7 billion in the third quarter, following increases of $56.6 billion in the second quarter and $42.2 billion in the first.

Real final sales of domestic product -- GDP less change in private inventories -- increased 2.5 percent in the third quarter, compared with an increase of 2.1 percent in the second.

Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 3.9 percent in the third quarter, compared with an increase of 2.5 percent in the second.

Gross national product

Real gross national product -- the goods and services produced by the labor and property supplied by U.S. residents -- increased 4.4 percent in the third quarter, compared with an increase of 2.7 percent in the second. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $12.7 billion in the third quarter after increasing $7.7 billion in the second; in the third quarter, receipts increased $1.0 billion, and payments decreased $11.7 billion.

Current-dollar GDP

Current-dollar GDP -- the market value of the nation’s output of goods and services -- increased 6.2 percent, or $251.9 billion, in the third quarter to a level of $16,912.9 billion. In the second quarter, current-dollar GDP increased 3.1 percent, or $125.7 billion.

Gross domestic income

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 1.8 percent in the third quarter, compared with an increase of 3.2 percent in the second. In the second estimate, the increase in real GDI was 1.4 percent. 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.

Revisions

The upward revision to the percent change in real GDP primarily reflected upward revisions to personal consumption expenditures and to nonresidential fixed investment that were partly offset by a downward revision to residential fixed investment.

Advance Estimate Second Estimate Third Estimate (Percent change from preceding quarter)

Real GDP 2.8 3.6 4.1 Real GDI --- 1.4 1.8 Current-dlr 4.8 5.6 6.2 Gross domestic purchases price index

1.8 1.8 1.8

Corporate Profits

Profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) increased $39.2 billion in the third quarter, compared with an increase of $66.8 billion in the second. Taxes on corporate income decreased $0.4 billion, in contrast to an increase of $10.0 billion. Profits after tax with IVA and CCAdj increased $39.5 billion, compared with an increase of $56.9 billion.

Dividends decreased $179.0 billion in the third quarter, in contrast to an increase of $273.5 billion in the second. The large third-quarter decrease primarily reflected dividends paid by Fannie Mae to the federal government in the second quarter. Undistributed profits increased $218.6 billion, in contrast to a decrease of $216.6 billion. Net cash flow with IVA -- the internal funds available to corporations for investment -- increased $231.1 billion, in contrast to a decrease of $205.3 billion.

Profits from current production reflect the depreciation of fixed assets valued at current cost using consistent depreciation profiles. These profiles are based on used-asset prices and do not depend on the depreciation-accounting practices used for federal income tax returns. The IVA and CCAdj are adjustments that convert inventory withdrawals and depreciation of fixed assets reported on a tax-return, historical-cost basis to the current-cost economic measures used in the national income and product accounts. Corporate profits by industry

Domestic profits of financial corporations increased $9.7 billion in the third quarter, compared with an increase of $24.5 billion in the second. Domestic profits of nonfinancial corporations increased $12.7 billion, compared with an increase of $37.8 billion. The increase in profits of financial corporations reflected increases in both Federal Reserve banks and “other” financial industries. The increase in nonfinancial corporations primarily reflected increases in manufacturing and in “other” nonfinancial corporations that were partly offset by a decrease in information. Within manufacturing, the largest increases were in “other” durable goods and in food and beverage and tobacco products. These increases were partly offset by decreases in petroleum and coal products and in chemical products.

The rest-of-the-world component of profits increased $16.7 billion in the third quarter, compared with an increase of $4.6 billion in the second. This measure is calculated as the difference between receipts from the rest of the world and payments to the rest of the world.

Gross value added of nonfinancial domestic corporate business

In the third quarter, real gross value added of nonfinancial corporations increased, and profits per unit of real value added increased. The increase in unit profits reflected an increase in unit prices that was partly offset by increases in both the unit nonlabor and labor costs incurred by corporations.

BEA’s national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA’s Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

Next release -- January 30, 2014, at 8:30 A.M. EST for: Gross Domestic Product: Fourth Quarter and Annual 2013 (Advance Estimate)

SOURCE: U.S. Commerce Department, http://www.bea.gov.



To contact the reporter on this story:
Chris Middleton in Washington at 
cmiddleton2@bloomberg.net

To contact the editor responsible for this story:
Marco Babic at  mbabic@bloomberg.net




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