<font color=green> GDP
bea.doc.gov <--details / stats
dismal.com
Economic Growth:
martincapital.com
============================================
Selected highlights.
FOR WIRE TRANSMISSION: 8:30 A.M. EDT, WEDNESDAY, AUGUST 29, 2001
Virginia H. Mannering: (202) 606-5304 (GDP) BEA 01-25
Kenneth A. Petrick: 606-9738 (Profits)
Recorded message: 606-5306
GROSS DOMESTIC PRODUCT: SECOND QUARTER 2001 (PRELIMINARY)
CORPORATE PROFITS: SECOND QUARTER 2001 (PRELIMINARY)
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 0.2 percent in the second quarter of 2001,
according to preliminary estimates released by the Bureau of Economic Analysis. In the first quarter, real
GDP increased 1.3 percent.
The GDP estimates released today are based on more complete source data than were available for
the advance estimates issued last month. In the advance estimates, the increase in real GDP was 0.7
percent (see "Revisions" on page 3).
The major contributors to the increase in real GDP in the second quarter were: Personal
consumption expenditures (PCE), state and local government spending, and residential fixed investment.
The contributions of these components were partly offset by decreases in equipment and software, in
exports, in nonresidential structures, and in private inventory investment. Imports, which are a
subtraction in the calculation of GDP, decreased.
The deceleration in real GDP growth in the second quarter reflected larger decreases in exports and
in equipment and software, a downturn in nonresidential structures, and a deceleration in PCE that were
partly offset by a smaller decrease in private inventory investment. There was also a larger decrease in
imports in the second quarter than in the first.
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 annualized. "Real" estimates are in chained (1996)
dollars. Price indexes are chain-type measures.
The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.4 percent in the second quarter, 0.1 percentage point less than the advance estimate; this
index increased 2.7 percent in the first quarter. Excluding food and energy prices, the price index for
gross domestic purchases increased 1.0 percent in the second quarter, compared with an increase of 2.3
percent in the first.
Real personal consumption expenditures increased 2.5 percent in the second quarter, compared
with an increase of 3.0 percent in the first. Real nonresidential fixed investment decreased 14.6 percent,
compared with a decrease of 0.2 percent. Nonresidential structures decreased 13.4 percent, in contrast to
an increase of 12.3 percent. Equipment and software decreased 15.1 percent, compared with a decrease
of 4.1 percent. Real residential fixed investment increased 5.8 percent, compared with an increase of 8.5
percent.
Real exports of goods and services decreased 12.2 percent in the second quarter, compared with a
decrease of 1.2 percent in the first. Real imports of goods and services decreased 7.7 percent, compared
with a decrease of 5.0 percent.
Real federal government consumption expenditures and gross investment increased 1.5 percent in
the second quarter, compared with an increase of 3.2 percent in the first. National defense increased 2.2
percent, compared with an increase of 7.5 percent. Nondefense increased 0.1 percent, in contrast to a
decrease of 4.3 percent. Real state and local government consumption expenditures and gross investment
increased 7.4 percent, compared with an increase of 6.4 percent.
The real change in private inventories subtracted 0.43 percentage point from the second-quarter
change in real GDP, after subtracting 2.61 percentage points from the first-quarter change. Private
businesses reduced inventories $38.4 billion in the second quarter, following a decrease of $27.1 billion in
the first quarter and an increase of $42.8 billion in the fourth.
Real final sales of domestic product -- GDP less change in private inventories -- increased 0.6
percent in the second quarter, compared with an increase of 4.0 percent in the first.
Gross domestic purchases
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 0.4 percent in the second quarter, compared with an increase of 0.7 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 0.1 percent in the second quarter, in contrast to an increase of 0.8 percent
in the first. GNP includes, and GDP excludes, net receipts of income from the rest of the world.
Current-dollar GDP
Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
2.4 percent, or $59.9 billion, in the second quarter to a level of $10,201.6 billion. In the first quarter,
current-dollar GDP increased 4.6 percent, or $113.8 billion.
Revisions
The preliminary estimate of the second-quarter increase in real GDP is 0.5 percentage point, or
$13.2 billion, lower than the advance estimate issued last month. The downward revision to the
percentage change in real GDP reflected downward revisions to change in private inventories and to
exports of goods that were partly offset by a downward revision to imports of goods and by upward
revisions to personal consumption expenditures (PCE) for services and to PCE for durable goods.
Advance Preliminary
(Percent change from preceding quarter)
Real GDP.............................. 0.7 0.2
Current-dollar GDP.................... 3.0 2.4
Gross domestic purchases price index.. 1.5 1.4
Corporate Profits
Profits from current production (profits before tax with inventory valuation and capital
consumption adjustments) decreased $28.5 billion in the second quarter. In the first quarter, profits
decreased $57.8 billion. Current-production cash flow (net cash flow with inventory valuation and capital
consumption adjustments) -- the internal funds available to corporations for investment -- decreased
$10.7 billion in the second quarter, compared with a decrease of $35.1 billion in the first.
Profits in the second quarter were reduced by about $14 billion due to the effects of Tropical
Storm Allison and other severe storms. Benefits paid by insurance companies reduced profits by about
$13 billion, and uninsured corporate losses reduced profits by about $1 billion.
Domestic profits of financial corporations decreased $4.6 billion in the second quarter, compared
with a decrease of $2.6 billion in the first.
Domestic profits of nonfinancial corporations decreased $21.1 billion in the second quarter,
compared with a decrease of $38.6 billion in the first. In the second quarter, real gross product of
nonfinancial corporations increased slightly, and profits per unit of real product decreased. The decrease
in unit profits reflected a smaller increase in the prices nonfinancial corporations received than in the unit
costs they incurred; both unit labor and nonlabor costs increased.
The rest-of-the-world component of profits decreased $2.8 billion in the second quarter, compared
with a decrease of $16.8 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 with inventory valuation adjustment is the best available measure of industry
profits because estimates of the capital consumption adjustment by industry do not exist. According to
this measure, domestic profits of both financial and nonfinancial corporations decreased. Profit decreases
of nonfinancial corporations were widespread among major industry groups. The largest decreases
occurred in manufacturing and in the transportation and public utilities group. The decrease in
manufacturing reflected a decrease in durable goods manufacturing that was partly offset by an increase
in nondurable goods manufacturing.
Profits before tax decreased $16.3 billion in the second quarter, compared with a decrease of $60.8
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 an historical-cost basis to the current-
cost measures used in the national income and product accounts. The capital consumption adjustment
decreased $4.4 billion in the second quarter (from $36.0 billion to $31.6 billion), compared with a
decrease of $2.4 billion in the first. The inventory valuation adjustment decreased $7.8 billion (from
-$1.9 billion to -$9.7 billion), in contrast to an increase of $5.4 billion.
Profits tax liability decreased $5.8 billion in the second quarter, compared with a decrease of $16.7
billion in the first. Profits after tax decreased $10.5 billion, compared with a decrease of $44.1 billion.
Dividends increased $7.1 billion, compared with an increase of $8.2 billion; undistributed profits
decreased $17.6 billion, compared with a decrease of $52.2 billion.<<< |
