EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, FRIDAY, JANUARY 30, 2015
BEA 15-04


* See the navigation bar at the right side of the news release text for links to data tables,
contact personnel and their telephone numbers, and supplementary materials.


Lisa Mataloni: (202) 606-5304 (GDP) gdpniwd@bea.gov
Jeannine Aversa: (202) 606-2649 (News Media)  
National Income and Product Accounts
Gross Domestic Product: Fourth Quarter and Annual 2014 (Advance Estimate)
      Real gross domestic product -- the value of the production of goods and services in the United
States, adjusted for price changes -- increased at an annual rate of 2.6 percent in the fourth quarter of
2014, according to the "advance" estimate released by the Bureau of Economic Analysis.  In the third
quarter, real GDP increased 5.0 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 "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 27, 2015.

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

      The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in
imports, a downturn in federal government spending, and decelerations in nonresidential fixed
investment and in exports that were partly offset by an upturn in private inventory investment and an
acceleration in PCE.

      The price index for gross domestic purchases, which measures prices paid by U.S. residents,
decreased 0.3 percent in the fourth quarter, in contrast to an increase of 1.4 percent in the third.
Excluding food and energy prices, the price index for gross domestic purchases increased 0.7 percent,
compared with an increase of 1.6 percent.

_______
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.

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

      Real personal consumption expenditures increased 4.3 percent in the fourth quarter, compared
with an increase of 3.2 percent in the third.  Durable goods increased 7.4 percent, compared with an
increase of 9.2 percent.  Nondurable goods increased 4.4 percent, compared with an increase of 2.5
percent.  Services increased 3.7 percent, compared with an increase of 2.5 percent.

      Real nonresidential fixed investment increased 1.9 percent in the fourth quarter, compared with
an increase of 8.9 percent in the third.  Investment in nonresidential structures increased 2.6 percent,
compared with an increase of 4.8 percent.  Investment in equipment decreased 1.9 percent, in contrast to
an increase of 11.0 percent.  Investment in intellectual property products increased 7.1 percent,
compared with an increase of 8.8 percent.  Real residential fixed investment increased 4.1 percent,
compared with an increase of 3.2 percent.

      Real exports of goods and services increased 2.8 percent in the fourth quarter, compared with an
increase of 4.5 percent in the third.  Real imports of goods and services increased 8.9 percent, in contrast
to a decrease of 0.9 percent.

      Real federal government consumption expenditures and gross investment decreased 7.5 percent
in the fourth quarter, in contrast to an increase of 9.9 percent in the third.  National defense decreased
12.5 percent, in contrast to an increase of 16.0 percent.  Nondefense increased 1.7 percent, compared
with an increase of 0.4 percent.  Real state and local government consumption expenditures and gross
investment increased 1.3 percent, compared with an increase of 1.1 percent.

      The change in real private inventories added 0.82 percentage point to the fourth-quarter change
in real GDP after subtracting 0.03 percentage point from the third-quarter change.  Private businesses
increased inventories $113.1 billion in the fourth quarter, following increases of $82.2 billion in the third
quarter and $84.8 billion in the second.

      Real final sales of domestic product -- GDP less change in private inventories -- increased 1.8
percent in the fourth quarter, compared with an increase of 5.0 percent in the third.


Gross domestic purchases

      Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 3.6 percent in the fourth quarter, compared with an increase of 4.1 percent in the
third.


Disposition of personal income

      Current-dollar personal income increased $136.8 billion in the fourth quarter, compared with an
increase of $131.6 billion in the third.  The acceleration in personal income primarily reflected
accelerations in wages and salaries and in proprietors’ income that were partly offset by a deceleration in
government social benefits to persons and a larger decrease in personal interest income.

      Personal current taxes increased $32.0 billion in the fourth quarter, compared with an increase of
$26.5 billion in the third.

      Disposable personal income increased $104.8 billion, or 3.3 percent, in the fourth quarter,
compared with an increase of $105.1 billion, or 3.3 percent, in the third.  Real disposable personal
income increased 3.8 percent, compared with an increase of 2.0 percent.

      Personal outlays increased $120.4 billion in the fourth quarter, compared with an increase of
$143.4 billion in the third.

      Personal saving -- disposable personal income less personal outlays -- was $601.7 billion in the
fourth quarter, compared with $617.2 billion in the third.

      The personal saving rate -- personal saving as a percentage of disposable personal income -- was
4.6 percent in the fourth quarter, compared with 4.7 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 financial accounts of the United States 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 production of goods and services in the United
States -- increased 2.5 percent, or $110.9 billion, in the fourth quarter to a level of $17,710.7 billion.  In
the third quarter, current-dollar GDP increased 6.4 percent, or $271.6 billion.


2014 GDP

	Real GDP increased 2.4 percent in 2014 (that is, from the 2013 annual level to the 2014 annual
level), compared with an increase of 2.2 percent in 2013.

      The increase in real GDP in 2014 reflected positive contributions from personal consumption
expenditures (PCE), nonresidential fixed investment, exports, private inventory investment, state and
local government spending, and residential fixed investment 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 2014 reflected an acceleration in nonresidential fixed
investment, a smaller decrease in federal government spending, and accelerations in private inventory
investment, in PCE, and in state and local government spending that were partly offset by an
acceleration in imports and a deceleration in residential fixed investment.

      The price index for gross domestic purchases increased 1.4 percent in 2014, compared with an
increase of 1.3 percent in 2013.

      Current-dollar GDP increased 3.9 percent, or $652.6 billion, in 2014 to a level of $17,420.7
billion, compared with an increase of 3.7 percent, or $604.9 billion, in 2013.

      During 2014 (that is, measured from the fourth quarter of 2013 to the fourth quarter of 2014),
real GDP increased 2.5 percent, compared with an increase of 3.1 percent during 2013.  The price index
for gross domestic purchases increased 1.1 percent during 2014, compared with an increase of 1.3
percent during 2013.?

________
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 27, 2015 at 8:30 A.M. EST for:
                 Gross Domestic Product:  Fourth Quarter and Annual 2014 (Second Estimate)



                                       *          *          *


Release dates in 2015


Gross Domestic Product

                 2014: IV and 2014 annual     2015: I          2015: II          2015: III

Advance....           January 30              April 29         July 30           October 29
Second.....           February 27             May 29           August 27         November 24
Third......           March 27                June 24          September 25      December 22


Corporate Profits

Preliminary...        ..                      May 29           August 27         November 24
Revised.......        March 27                June 24          September 25      December 22



                                     Comparisons of Revisions to GDP

     Quarterly estimates of GDP are released on the following schedule:  "Advance" estimates, based on
source data that are incomplete or subject to further revision by the source agency, are released near
the end of the first month following 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, which are typically released in late July.

     Annual revisions, cover at a minimum the quarters of the 3 most recent calendar years, 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 real and current-
dollar 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 1.2 percentage points.
Larger average revisions for the latest estimates reflect the fact that comprehensive revisions include major
improvements, such as the incorporation of BEA’s latest benchmark input-output accounts.  The average revision
(with regard to sign) from the advance estimate to the latest estimate is 0.3 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   The quarterly estimates correctly indicate the direction of change of real
GDP 96 percent of the time, correctly indicate whether GDP is accelerating or decelerating about 75 percent
of the time, and correctly indicate whether real GDP growth is above, near, or below trend growth about 83
percent 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

________________________________________________________Real GDP_____________________________________________________

Advance to second....................               0.1                 0.5                  0.4
Advance to third.....................                .1                  .6                   .4
Second to third......................                .0                  .2                   .2

Advance to latest....................              -0.1                 1.2                  1.0


____________________________________________________Current-dollar GDP_______________________________________________

Advance to second....................               0.2                 0.5                  0.4
Advance to third.....................                .2                  .6                   .4
Second to third......................                .1                  .3                   .2
Advance to latest....................                .1                 1.3                  1.0

_____________________________________________________________________________________________________________________
 NOTE.  These comparisons are based on the period from 1993 through 2013.