U.S. GDP declines slightly in fourth quarter of 2012
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National Income and Product Accounts

Gross Domestic Product, 4th quarter and annual 2012 (advance 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 0.1 percent in the fourth quarter of 2012

(that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the

Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

The Bureau emphasized that the fourth-quarter advance estimate released today is based on

source data that are incomplete or subject to further revision by the source agency (see the box on page 4

and the "Comparisons of Revisions to GDP" on page 5). The "second" estimate for the fourth quarter,

based on more complete data, will be released on February 28, 2013.

The decrease in real GDP in the fourth quarter primarily reflected negative contributions from

private inventory investment, federal government spending, and exports that were partly offset by

positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment,

and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The downturn in real GDP in the fourth quarter primarily reflected downturns in private

inventory investment, in federal government spending, in exports, and in state and local government

spending that were partly offset by an upturn in nonresidential fixed investment, a larger decrease in

imports, and an acceleration in PCE.

Final sales of computers added 0.15 percentage point to the fourth-quarter change in real GDP

after adding 0.11 percentage point to the third-quarter change. Motor vehicle output added 0.04

percentage point to the fourth-quarter change in real GDP after subtracting 0.25 percentage point from

the third-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 www.bea.gov along with the Technical Notes and Highlights

related to this release.

_____________

The price index for gross domestic purchases, which measures prices paid by U.S. residents,

increased 1.3 percent in the fourth quarter, compared with an increase of 1.4 percent in the third.

Excluding food and energy prices, the price index for gross domestic purchases increased 1.1 percent in

the fourth quarter, compared with an increase of 1.2 percent in the third.

Real personal consumption expenditures increased 2.2 percent in the fourth quarter, compared

with an increase of 1.6 percent in the third. Durable goods increased 13.9 percent, compared with an

increase of 8.9 percent. Nondurable goods increased 0.4 percent, compared with an increase of 1.2

percent. Services increased 0.9 percent, compared with an increase of 0.6 percent.

Real nonresidential fixed investment increased 8.4 percent in the fourth quarter, in contrast to a

decrease of 1.8 percent in the third. Nonresidential structures decreased 1.1 percent; it was unchanged

in the third quarter. Equipment and software increased 12.4 percent in the fourth quarter, in contrast to a

decrease of 2.6 percent in the third. Real residential fixed investment increased 15.3 percent, compared

with an increase of 13.5 percent.

Real exports of goods and services decreased 5.7 percent in the fourth quarter, in contrast to an

increase of 1.9 percent in the third. Real imports of goods and services decreased 3.2 percent, compared

with a decrease of 0.6 percent.

Real federal government consumption expenditures and gross investment decreased 15.0 percent

in the fourth quarter, in contrast to an increase of 9.5 percent in the third. National defense decreased

22.2 percent, in contrast to an increase of 12.9 percent. Nondefense increased 1.4 percent, compared

with an increase of 3.0 percent. Real state and local government consumption expenditures and gross

investment decreased 0.7 percent, in contrast to an increase of 0.3 percent.

The change in real private inventories subtracted 1.27 percentage points from the fourth-quarter

change in real GDP after adding 0.73 percentage point to the third-quarter change. Private businesses

increased inventories $20.0 billion in the fourth quarter, following increases of $60.3 billion in the third

and $41.4 billion in the second.

Real final sales of domestic product -- GDP less change in private inventories -- increased 1.1

percent in the fourth quarter, compared with an increase of 2.4 percent in the third.

Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever

produced -- increased 0.1 percent in the fourth quarter, compared with an increase of 2.6 percent in the

third.

Disposition of personal income

Current-dollar personal income increased $256.2 billion (7.9 percent) in the fourth quarter,

compared with an increase of $72.7 billion (2.2 percent) in the third. The acceleration in personal

income primarily reflected a sharp acceleration in personal dividend income, an upturn in personal

interest income, and an acceleration in wage and salary disbursements. The sharp acceleration in

personal dividend income reflected accelerated and special dividends that were paid by many companies

in the fourth quarter in anticipation of changes in individual income tax rates. The upturn in personal

interest income primarily reflected an upturn in interest rates for Treasury Inflation Protected Securities.

The acceleration in wages and salaries reflected the pattern of monthly Bureau of Labor Statistics

employment, hours, and earnings data for the fourth quarter, as well as a judgmental estimate of

accelerated compensation in the form of bonus payments and other irregular pay in the fourth quarter.

Personal current taxes increased $21.0 billion in the fourth quarter, compared with an increase of

$10.0 billion in the third.

Disposable personal income increased $235.2 billion (8.1 percent) in the fourth quarter,

compared with an increase of $62.7 billion (2.1 percent) in the third. Real disposable personal income

increased 6.8 percent, compared with an increase of 0.5 percent.

Personal outlays increased $95.0 billion (3.3 percent) in the fourth quarter, compared with an

increase of $88.6 billion (3.1 percent) in the third. Personal saving -- disposable personal income less

personal outlays -- was $570.0 billion in the fourth quarter, compared with $429.8 billion in the third.

The personal saving rate -- personal saving as a percentage of disposable personal income -- was 4.7

percent in the fourth quarter, compared with 3.6 percent in the third. For a comparison of personal

saving in BEA’s national income and product accounts with personal saving in the Federal Reserve

Board’s flow of funds accounts and data on changes in net worth, go to

www.bea.gov/national/nipaweb/Nipa-Frb.asp.

Current-dollar GDP

Current-dollar GDP -- the market value of the nation's output of goods and services -- increased

0.5 percent, or $18.0 billion, in the fourth quarter to a level of $15,829.0 billion. In the third quarter,

current-dollar GDP increased 5.9 percent, or $225.4 billion.

2012 GDP

Real GDP increased 2.2 percent in 2012 (that is, from the 2011 annual level to the 2012 annual

level), compared with an increase of 1.8 percent in 2011.

The increase in real GDP in 2012 primarily reflected positive contributions from personal

consumption expenditures (PCE), nonresidential fixed investment, exports, residential fixed investment,

and private inventory investment that were partly offset by negative contributions from federal

government spending and from state and local government spending. Imports, which are a subtraction in

the calculation of GDP, increased.

The acceleration in real GDP in 2012 primarily reflected a deceleration in imports, upturns in

residential fixed investment and in private inventory investment, and smaller decreases in state and local

government spending and in federal government spending that were partly offset by decelerations in

PCE, exports, and nonresidential fixed investment.

The price index for gross domestic purchases increased 1.7 percent in 2012, compared with an

increase of 2.5 percent in 2011.

Current-dollar GDP increased 4.0 percent, or $600.3 billion, in 2012, compared with an increase

of 4.0 percent, or $576.8 billion, in 2011.

During 2012 (that is, measured from the fourth quarter of 2011 to the fourth quarter of 2012) real

GDP increased 1.5 percent. Real GDP increased 2.0 percent during 2011. The price index for gross

domestic purchases increased 1.5 percent during 2012, compared with an increase of 2.5 percent during

2011.

______________

BOX. Information on the assumptions used for unavailable source data is provided in a technical note

that is posted with the news release on BEA's Web site. Within a few days after the release, a detailed

"Key Source Data and Assumptions" file is posted on the Web site. In the middle of each month, an

analysis of the current quarterly estimate of GDP and related series is made available on the Web site;

click on Survey of Current Business, "GDP and the Economy." For information on revisions, see

"Revisions to GDP, GDI, and Their Major Components."

______________

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 -- February 28, 2013, at 8:30 A.M. EST for:

Gross Domestic Product: Fourth Quarter and Annual 2012 (Second Estimate)

Release Dates in 2013

2012: IV and 2012 annual 2013: I 2013: II 2013: III

Gross Domestic Product

Advance.......... January 30 April 26 July 31 October 30

Second........... February 28 May 30 August 29 November 26

Third............ March 28 June 26 September 26 December 20

Corporate Profits

Preliminary...... ........ May 30 August 29 November 26

Revised.......... March 28 June 26 September 26 December 20

Comparisons of Revisions to GDP

Quarterly estimates of GDP are released on the following schedule: the "advance" estimate, based on

source data that are incomplete or subject to further revision by the source agency, is released near the end of the

first month after the end of the quarter; as more detailed and more comprehensive data become available,

the "second" and "third" estimates are released near the end of the second and third months, respectively.

The "latest"” estimate reflects the results of both annual and comprehensive revisions.

Annual revisions, which generally cover the quarters of the 3 most recent calendar years, are usually carried

out each summer and incorporate newly available major annual source data. Comprehensive (or benchmark)

revisions are carried out at about 5-year intervals and incorporate major periodic source data, as well as

improvements in concepts and methods that update the accounts to portray more accurately the evolving U.S.

economy.

The table below shows comparisons of the revisions between quarterly percent changes of current-dollar

and of real GDP for the different vintages of the estimates. From the advance estimate to the second estimate (one

month later), the average revision to real GDP without regard to sign is 0.5 percentage point, while from the

advance estimate to the third estimate (two months later), it is 0.6 percentage point. From the advance estimate to

the latest estimate, the average revision without regard to sign is 1.3 percentage points. The average revision

(with regard to sign) from the advance estimate to the latest estimate is 0.2 percentage point, which is larger

than the average revisions from the advance estimate to the second or to the third estimates. The larger average

revisions to the latest estimate reflect the fact that comprehensive revisions include major improvements, such as

the incorporation of BEA’s latest benchmark input-output accounts. The quarterly estimates correctly indicate the

direction of change of real GDP 97 percent of the time, correctly indicate whether GDP is accelerating or

decelerating 72 percent of the time, and correctly indicate whether real GDP growth is above, near, or below trend

growth more than four-fifths of the time.

Revisions Between Quarterly Percent Changes of GDP: Vintage Comparisons

[Annual rates]

Vintages Average Average without Standard deviation of

compared regard to sign revisions without

regard to sign

____________________________________________________Current-dollar GDP_______________________________________________

Advance to second.................... 0.2 0.6 0.4

Advance to third..................... .1 .7 .4

Second to third...................... .0 .3 .2

Advance to latest.................... .3 1.2 1.0

________________________________________________________Real GDP_____________________________________________________

Advance to second.................... 0.1 0.5 0.4

Advance to third..................... .1 .6 .5

Second to third...................... .0 .2 .2

Advance to latest.................... .2 1.3 1.0

NOTE. These comparisons are based on the period from 1983 through 2009.


 
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