EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, THURSDAY, MAY 29, 2014

Transcription

1 NEWS RELEASE EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, THURSDAY, MAY 29, 2014 Lisa Mataloni: (202) (GDP) BEA Kate Shoemaker: (202) (Profits) GROSS DOMESTIC PRODUCT: FIRST QUARTER 2014 (SECOND ESTIMATE) CORPORATE PROFITS: FIRST QUARTER 2014 (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 first quarter according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6 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, real GDP was estimated to have increased 0.1 percent. With this second estimate for the first quarter, the decline in private inventory investment was larger than previously estimated (see "Revisions" on page 3). The decrease in real GDP in the first quarter primarily reflected negative contributions from private inventory investment, exports, nonresidential fixed investment, state and local government spending, and residential fixed investment that were partly offset by a positive contribution from personal consumption expenditures. Imports, which are a subtraction in the calculation of GDP, increased. Annual Revision of the National Income and Product Accounts The annual revision of the national income and product accounts will be released along with the "advance" estimate of GDP for the second quarter of 2014 on July 30. In addition to the regular revision of estimates for the most recent 3 years and for the first quarter of 2014, GDP and select components will be revised back to the first quarter of 1999 (see "Preview of Upcoming NIPA Revision" in the May Survey of Current Business). The August Survey will contain an article describing the annual revision in detail. NOTE. 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. This news release is available on BEA s Web site along with the Technical Note and Highlights related to this release. For information on revisions, see "Revisions to GDP, GDI, and Their Major Components."

2 The downturn in the percent change in real GDP primarily reflected a downturn in exports, a larger decrease in private inventory investment, and downturns in nonresidential fixed investment and in state and local government spending that were partly offset by an upturn in federal government spending. The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.3 percent in the first quarter, 0.1 percentage point less than in the advance estimate; this index increased 1.5 percent in the fourth quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.3 percent in the first quarter, compared with an increase of 1.8 percent in the fourth. Real personal consumption expenditures increased 3.1 percent in the first quarter, compared with an increase of 3.3 percent in the fourth. Durable goods increased 1.4 percent, compared with an increase of 2.8 percent. Nondurable goods increased 0.4 percent, compared with an increase of 2.9 percent. Services increased 4.3 percent, compared with an increase of 3.5 percent. Real nonresidential fixed investment decreased 1.6 percent in the first quarter, in contrast to an increase of 5.7 percent in the fourth. Investment in nonresidential structures decreased 7.5 percent, compared with a decrease of 1.8 percent. Investment in equipment decreased 3.1 percent, in contrast to an increase of 10.9 percent. Investment in intellectual property products increased 5.1 percent, compared with an increase of 4.0 percent. Real residential fixed investment decreased 5.0 percent, compared with a decrease of 7.9 percent. Real exports of goods and services decreased 6.0 percent in the first quarter, in contrast to an increase of 9.5 percent in the fourth. Real imports of goods and services increased 0.7 percent, compared with an increase of 1.5 percent. Real federal government consumption expenditures and gross investment increased 0.7 percent in the first quarter, in contrast to a decrease of 12.8 percent in the fourth. National defense decreased 2.4 percent, compared with a decrease of 14.4 percent. Nondefense increased 5.9 percent, in contrast to a decrease of 10.0 percent. Real state and local government consumption expenditures and gross investment decreased 1.8 percent in the first quarter; it was unchanged in the fourth. The change in real private inventories subtracted 1.62 percentage points from the first-quarter change in real GDP, after subtracting 0.02 percentage point from the fourth-quarter change. Private businesses increased inventories $49.0 billion in the first quarter, following increases of $111.7 billion in the fourth quarter and $115.7 billion in the third. Real final sales of domestic product -- GDP less change in private inventories -- increased 0.6 percent in the first quarter, compared with an increase of 2.7 percent in the fourth. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- was unchanged in the first quarter, following an increase of 1.6 percent in the fourth

3 Gross national product Real gross national product -- the goods and services produced by the labor and property supplied by U.S. residents -- decreased 2.1 percent in the first quarter, in contrast to an increase of 3.1 percent in the fourth. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which decreased $42.4 billion in the first quarter, in contrast to an increase of $17.0 billion in the fourth; in the first quarter, receipts decreased $29.0 billion, and payments increased $13.4 billion. Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 0.3 percent, or $11.7 billion, in the first quarter to a level of $17,101.3 billion. In the fourth quarter, current-dollar GDP increased 4.2 percent, or $176.7 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, decreased 2.3 percent in the first quarter, in contrast to an increase of 2.6 percent (revised) in the fourth. 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 second estimate of the first-quarter percent change in real GDP was revised down 1.1 percentage points, or $43.7 billion, from the advance estimate issued last month, primarily reflecting a downward revision to private inventory investment and an upward revision to imports that were partly offset by an upward revision to exports. Advance Estimate Second Estimate (Percent change from preceding quarter) Real GDP Current-dollar GDP Real GDI Gross domestic purchases price index

4 Corporate Profits Profits from current production Profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) decreased $213.4 billion in the first quarter, in contrast to an increase of $47.1 billion in the fourth. The IVA decreased $32.3 billion, compared with a decrease of $0.5 billion. The CCAdj decreased $182.5 billion, compared with a decrease of $1.5 billion. The IVA and CCAdj 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 NIPAs. Taxes on corporate income increased $26.2 billion in the first quarter, compared with an increase of $13.3 billion in the fourth. Profits after tax with IVA and CCAdj decreased $239.5 billion, in contrast to an increase of $33.8 billion. The first-quarter changes in taxes on corporate income and in CCAdj mainly reflect the expiration of bonus depreciation provisions. For further explanation, see the box below. Dividends decreased $89.0 billion in the first quarter, in contrast to an increase of $90.5 billion in the fourth. Undistributed profits decreased $150.6 billion, compared with a decrease of $56.7 billion. Net cash flow with IVA -- the internal funds available to corporations for investment -- decreased $131.6 billion, compared with a decrease of $43.0 billion. Impacts of Bonus Depreciation on the First Quarter of 2014 The first-quarter changes in taxes on corporate income and in capital consumption adjustment (CCAdj) mainly reflect the expiration of both the 50-percent bonus depreciation provision and increased Section 179 expensing limits claimed under the American Taxpayer Relief Act of For detailed data, see the table "Net Effects of the Tax Acts of 2002, 2003, 2008, 2009, 2010, and 2012 on Selected Measures of Corporate Profits." Bonus depreciation does not affect profits from current production. Profits from current production are based on consistent depreciation profiles of fixed assets valued at current cost, not on the depreciation-accounting practices used for federal income tax returns. For a discussion on the effect of tax act provisions on the CCAdj, see FAQ 999, "Why does the capital consumption adjustment for domestic business decline so much in the first quarter of 2012?" Domestic profits of financial corporations decreased $70.6 billion in the first quarter, in contrast to an increase of $6.1 billion in the fourth. Domestic profits of nonfinancial corporations decreased $102.3 billion, in contrast to an increase of $18.1 billion. The rest-of-the-world component of profits decreased $40.4 billion in the first quarter, in contrast to an increase of $22.9 billion in the fourth. This measure is calculated as the difference between receipts from rest of the world and payments to rest of the world. In the first quarter, receipts decreased $32.3 billion, and payments increased $8.2 billion

5 Gross value added of nonfinancial domestic corporate business Real gross value added of nonfinancial corporations decreased 2.2 percent in the first quarter. Profits per unit of real value added decreased, reflecting increases in the unit labor and nonlabor costs incurred by corporations that were partly offset by an increase in unit prices. * * * 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 By visiting the site, you can also subscribe to receive free summaries of BEA releases and announcements. * * * Next release -- June 25, 2014 at 8:30 A.M. EDT for: Gross Domestic Product: First Quarter 2014 (Third Estimate) Corporate Profits: First Quarter 2014 (Revised Estimate) - 5 -

6 Table 1. Real Gross Domestic Product and Related Measures: Percent Change From Preceding Period r II III IV I II III IV I II III IV I II III IV r I r 1 Gross domestic product (GDP) Personal consumption expenditures Goods Durable goods Nondurable goods Services Gross private domestic investment Fixed investment Nonresidential Structures Equipment Intellectual property products Residential Change in private inventories Net exports of goods and services Exports Goods Services Imports Goods Services Government consumption expenditures and gross investment Federal National defense Nondefense State and local Final sales of domestic product Gross domestic purchases Final sales to domestic purchasers Gross domestic income (GDI) Gross national product (GNP) Disposable personal income Current-dollar measures: 33 GDP Final sales of domestic product Gross domestic purchases Final sales to domestic purchasers GDI GNP Disposable personal income r Revised. Revisions include changes to series affected by the incorporation of revised wage and salary estimates for the fourth quarter of Gross domestic income deflated by the implicit price deflator for gross domestic product. See Explanatory Note at the end of the tables

7 Table 2. Contributions to Percent Change in Real Gross Domestic Product II III IV I II III IV I II III IV I II III IV I r Percent change at annual rate: 1 Gross domestic product Percentage points at annual rates: 2 Personal consumption expenditures Goods Durable goods Motor vehicles and parts Furnishings and durable household equipment Recreational goods and vehicles Other durable goods Nondurable goods Food and beverages purchased for offpremises consumption Clothing and footwear Gasoline and other energy goods Other nondurable goods Services Household consumption expenditures (for services) Housing and utilities Health care Transportation services Recreation services Food services and accommodations Financial services and insurance Other services Final consumption expenditures of nonprofit institutions serving households Gross output of nonprofit institutions Less: Receipts from sales of goods and services by nonprofit institutions Gross private domestic investment Fixed investment Nonresidential Structures Equipment Information processing equipment Computers and peripheral equipment Other Industrial equipment Transportation equipment Other equipment Intellectual property products Software Research and development Entertainment, literary, and artistic originals Residential Change in private inventories Farm Nonfarm Net exports of goods and services Exports Goods Services Imports Goods Services Government consumption expenditures and gross investment Federal National defense Consumption expenditures Gross investment Nondefense Consumption expenditures Gross investment State and local Consumption expenditures Gross investment r Revised See Explanatory Note at the end of the tables

8 Table 3. Gross Domestic Product: Level and Change From Preceding Period Continues 2013 Billions of dollars Billions of chained (2009) dollars Change from preceding period I II III IV I r I II III IV I r IV I r 1 Gross domestic product... 16, , , , , , , , , , , , Personal consumption expenditures... 11, , , , , , , , , , , , Goods... 3, , , , , , , , , , , , Durable goods... 1, , , , , , , , , , , , Motor vehicles and parts Furnishings and durable household equipment Recreational goods and vehicles Other durable goods Nondurable goods... 2, , , , , , , , , , , , Food and beverages purchased for offpremises consumption Clothing and footwear Gasoline and other energy goods Other nondurable goods Services... 7, , , , , , , , , , , , Household consumption expenditures (for services)... 7, , , , , , , , , , , , Housing and utilities... 2, , , , , , , , , , , , Health care... 1, , , , , , , , , , , , Transportation services Recreation services Food services and accommodations Financial services and insurance Other services , Final consumption expenditures of nonprofit institutions serving households Gross output of nonprofit institutions... 1, , , , , , , , , , , , Less: Receipts from sales of goods and services by nonprofit institutions Gross private domestic investment... 2, , , , , , , , , , , , Fixed investment... 2, , , , , , , , , , , , Nonresidential... 2, , , , , , , , , , , , Structures Equipment Information processing equipment Computers and peripheral equipment Other Industrial equipment Transportation equipment Other equipment Intellectual property products Software Research and development Entertainment, literary, and artistic originals Residential Change in private inventories Farm Nonfarm Net exports of goods and services Exports... 2, , , , , , , , , , , , Goods... 1, , , , , , , , , , , , Services Imports... 2, , , , , , , , , , , , Goods... 2, , , , , , , , , , , , Services r Revised NOTE. Users are cautioned that particularly for components that exhibit rapid change in prices relative to other prices in the economy, the chained-dollar estimates should not be used to measure the component s relative importance or its contribution to the growth rate of more aggregate series. For accurate estimates of the contributions to percent changes in real gross domestic product, use table 2. See Explanatory Note at the end of the tables

9 Table 3. Gross Domestic Product: Level and Change From Preceding Period Table Ends 2013 Billions of dollars Billions of chained (2009) dollars Change from preceding period I II III IV I r I II III IV I r IV I r 52 Government consumption expenditures and gross investment... 3, , , , , , , , , , , , Federal... 1, , , , , , , , , , , , National defense Consumption expenditures Gross investment Nondefense Consumption expenditures Gross investment State and local... 1, , , , , , , , , , , , Consumption expenditures... 1, , , , , , , , , , , , Gross investment Residual Final sales of domestic product... 16, , , , , , , , , , , , Gross domestic purchases... 17, , , , , , , , , , , , Final sales to domestic purchasers... 17, , , , , , , , , , , , Gross domestic product... 16, , , , , , , , , , , , Plus: Income receipts from the rest of the world Less: Income payments to the rest of the world Equals: Gross national product... 17, , , , , , , , , , , , Net domestic product... 14, , , , , , , , , , , , Gross domestic income , , , , , , , , , , , , r Revised 1. Real gross domestic income is gross domestic income deflated by the implicit price deflator for gross domestic product. Includes revisions due to the incorporation of revised wage and salary estimates for the fourth quarter of NOTE. Users are cautioned that particularly for components that exhibit rapid change in prices relative to other prices in the economy, the chained-dollar estimates should not be used to measure the component s relative importance or its contribution to the growth rate of more aggregate series. For accurate estimates of the contributions to percent changes in real gross domestic product, use table 2. See Explanatory Note at the end of the tables

10 Table 4. Price Indexes for Gross Domestic Product and Related Measures: Percent Change From Preceding Period II III IV I II III IV I II III IV I II III IV I r 1 Gross domestic product (GDP) Personal consumption expenditures Goods Durable goods Nondurable goods Services Gross private domestic investment Fixed investment Nonresidential Structures Equipment Intellectual property products Residential Change in private inventories Net exports of goods and services Exports Goods Services Imports Goods Services Government consumption expenditures and gross investment Federal National defense Nondefense State and local Final sales of domestic product Gross domestic purchases Final sales to domestic purchasers Gross national product (GNP) Implicit price deflators: 31 GDP Gross domestic purchases GNP r Revised See Explanatory Note at the end of the tables

11 Table 5. Real Gross Domestic Product, Quantity Indexes [Index numbers, 2009=100] Seasonally adjusted I II III IV I r 1 Gross domestic product Personal consumption expenditures Goods Durable goods Nondurable goods Services Gross private domestic investment Fixed investment Nonresidential Structures Equipment Intellectual property products Residential Change in private inventories Exports of goods and services Imports of goods and services Government consumption expenditures and gross investment Federal State and local Final sales of domestic product Gross domestic purchases Final sales to domestic purchasers Gross national product r Revised See Explanatory Note at the end of the tables

12 Table 6. Price Indexes for Gross Domestic Product [Index numbers, 2009=100] Seasonally adjusted I II III IV I r 1 Gross domestic product Personal consumption expenditures (PCE) Goods Durable goods Nondurable goods Services Gross private domestic investment Fixed investment Nonresidential Structures Equipment Intellectual property products Residential Change in private inventories Exports of goods and services Imports of goods and services Government consumption expenditures and gross investment Federal State and local PCE excluding food and energy Market-based PCE Market-based PCE excluding food and energy Final sales of domestic product Gross domestic purchases Final sales to domestic purchasers Gross national product Implicit price deflators: 27 Gross domestic product Final sales of domestic product Gross domestic purchases Final sales to domestic purchasers Gross national product r Revised 1. Food excludes personal consumption expenditures for purchased meals and beverages, which are classified in food services. 2. This index is a supplemental measure that is based on household expenditures for which there are observable price measures. It excludes most implicit prices (for example, financial services furnished without payment) and the final consumption expenditures of nonprofit institutions serving households. Percentage changes for these series are included in the addenda to table 8 and appendix table A. See Explanatory Note at the end of the tables

13 Table 7. Real Gross Domestic Product: Percent Change From Preceding Year r 1 Gross domestic product (GDP) Personal consumption expenditures Goods Durable goods Nondurable goods Services Gross private domestic investment Fixed investment Nonresidential Structures Equipment Intellectual property products Residential Change in private inventories Net exports of goods and services Exports Goods Services Imports Goods Services Government consumption expenditures and gross investment Federal National defense Nondefense State and local Final sales of domestic product Gross domestic purchases Final sales to domestic purchasers Gross domestic income Gross national product Real disposable personal income Price indexes: 33 Gross domestic purchases Gross domestic purchases excluding food and energy GDP GDP excluding food and energy Personal consumption expenditures r Revised. Revisions include changes to series affected by the incorporation of revised wage and salary estimates for the fourth quarter of Gross domestic income deflated by the implicit price deflator for gross domestic product. 2. Food excludes personal consumption expenditures for purchased meals and beverages, which are classified in food services

14 Table 8. Real Gross Domestic Product: Percent Change From Quarter One Year Ago II III IV I II III IV I II III IV I II III IV r I r 1 Gross domestic product (GDP) Personal consumption expenditures (PCE) Goods Durable goods Nondurable goods Services Gross private domestic investment Fixed investment Nonresidential Structures Equipment Intellectual property products Residential Change in private inventories Net exports of goods and services Exports Goods Services Imports Goods Services Government consumption expenditures and gross investment Federal National defense Nondefense State and local Final sales of domestic product Gross domestic purchases Final sales to domestic purchasers Gross domestic income Gross national product Real disposable personal income Price indexes: 33 Gross domestic purchases Gross domestic purchases excluding food and energy GDP GDP excluding food and energy PCE PCE excluding food and energy Market-based PCE Market-based PCE excluding food and energy r Revised. Revisions include changes to series affected by the incorporation of revised wage and salary estimates for the fourth quarter of Gross domestic income deflated by the implicit price deflator for gross domestic product. 2. Food excludes personal consumption expenditures for purchased meals and beverages, which are classified in food services. 3. This index is a supplemental measure that is based on household expenditures for which there are observable price measures. It excludes most implicit prices (for example, financial services furnished without payment) and the final consumption expenditures of nonprofit institutions serving households