EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, THURSDAY, MARCH 29, 2012
BEA 12-11


* 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 S. Mataloni: (202) 606-5304 (GDP) gdpniwd@bea.gov
Andrew Hodge: (202) 606-5564 (Profits) cpniwd@bea.gov
Recorded message: (202) 606-5306    
Ralph Stewart: (202) 606-2649 (News Media)  
Jeannine Aversa: (202) 606-2649 (News Media)  
National Income and Product Accounts
Gross Domestic Product, 4th quarter 2011 and annual 2011 (third estimate);
   Corporate Profits, 4th quarter 2011 and annual 2011
      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 3.0 percent in the fourth quarter of 2011
(that is, from the third quarter to the fourth quarter), according to the "third" estimate released by the
Bureau of Economic Analysis.  In the third quarter, real GDP increased 1.8 percent.

      The GDP estimate released today is based on more complete source data than were available for
the "second" estimate issued last month.  In the second estimate, the increase in real GDP was also 3.0
percent (see "Revisions" on page 3).

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

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

      Motor vehicle output added 0.47 percentage point to the fourth-quarter change in real GDP after
adding 0.12 percentage point to the third-quarter change.  Final sales of computers added 0.12
percentage point to the fourth-quarter change in real GDP after adding 0.22 percentage point to 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 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."
____________

      The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.1 percent in the fourth quarter, the same increase as in the second estimate; this index
increased 2.0 percent in the third quarter.  Excluding food and energy prices, the price index for gross
domestic purchases increased 1.2 percent in the fourth quarter, compared with an increase of 1.8 percent
in the third.

      Real personal consumption expenditures increased 2.1 percent in the fourth quarter, compared
with an increase of 1.7 percent in the third.  Durable goods increased 16.1 percent, compared with an
increase of 5.7 percent.  Nondurable goods increased 0.8 percent, in contrast to a decrease of 0.5
percent.  Services increased 0.4 percent, compared with an increase of 1.9 percent.

      Real nonresidential fixed investment increased 5.2 percent, compared with an increase of 15.7
percent.  Nonresidential structures decreased 0.9 percent, in contrast to an increase of 14.4 percent.
Equipment and software increased 7.5 percent, compared with an increase of 16.2 percent.  Real
residential fixed investment increased 11.6 percent, compared with an increase of 1.3 percent.

      Real exports of goods and services increased 2.7 percent in the fourth quarter, compared with an
increase of 4.7 percent in the third.  Real imports of goods and services increased 3.7 percent, compared
with an increase of 1.2 percent.

      Real federal government consumption expenditures and gross investment decreased 6.9 percent
in the fourth quarter, in contrast to an increase of 2.1 percent in the third.  National defense decreased
12.1 percent, in contrast to an increase of 5.0 percent.  Nondefense increased 4.5 percent, in contrast to a
decrease of 3.8 percent.  Real state and local government consumption expenditures and gross
investment decreased 2.2 percent, compared with a decrease of 1.6 percent.

      The change in real private inventories added 1.81 percentage points to the fourth-quarter change
in real GDP, after subtracting 1.35 percentage points from the third-quarter change.  Private businesses
increased inventories $52.2 billion in the fourth quarter, following a decrease of $2.0 billion in the third
quarter and an increase of $39.1 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 3.2 percent in the third.


Gross domestic purchases

      Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- increased 3.1 percent in the fourth quarter, compared with an increase of 1.3 percent in the
third.


Gross national product

      Real gross national product -- the goods and services produced by the labor and property
supplied by U.S. residents -- increased 1.8 percent in the fourth quarter, compared with an increase of
1.9 percent in the third.  GNP includes, and GDP excludes, net receipts of income from the rest of the
world, which decreased $36.7 billion in the fourth quarter after increasing $3.9 billion in the third; in the
fourth quarter, receipts decreased $21.8 billion, and payments increased $15.0 billion.


Current-dollar GDP

      Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
3.8 percent, or $143.3 billion, in the fourth quarter to a level of $15,319.4 billion.  In the third quarter,
current-dollar GDP increased 4.4 percent, or $163.3 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 4.4 percent in the fourth quarter,
compared to an increase of 2.6 percent in the third.  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 "third" estimate of the fourth-quarter percent change in real GDP is the same as the "second"
estimate issued last month, primarily reflecting a downward revision to exports that was offset by an
upward revision to nonresidential fixed investment.

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

Real GDP.....................................        2.8               3.0               3.0
Current-dollar GDP...........................        3.2               3.9               3.8
Gross domestic purchases price index.........        0.8               1.1               1.1


2011 GDP

      Real GDP increased 1.7 percent in 2011 (that is, from the 2010 annual level to the 2011 annual
level), compared with an increase of 3.0 percent in 2010.

      The increase in real GDP in 2011 primarily reflected positive contributions from personal
consumption expenditures, exports, and nonresidential fixed investment that were partly offset by
negative contributions from state and local government spending, private inventory investment, and
federal government spending.  Imports, which are a subtraction in the calculation of GDP, increased.

      The deceleration in real GDP in 2011 primarily reflected downturns in private inventory
investment and in federal government spending and a deceleration in exports that were partly offset by a
deceleration in imports and an acceleration in nonresidential fixed investment.

      Real GDI increased 2.1 percent in 2011, compared with an increase of 3.6 percent in 2010.

      The price index for gross domestic purchases increased 2.5 percent in 2011, compared with an
increase of 1.5 percent in 2010.

      Current-dollar GDP increased 3.9 percent, or $567.5 billion, in 2011 to a level of $15,094.0
billion.  In 2010, current-dollar GDP increased 4.2 percent, or $587.5 billion.

      During 2011 (that is, measured from the fourth quarter of 2010 to the fourth quarter of 2011),
real GDP increased 1.6 percent.  Real GDP increased 3.1 percent during 2010.  The price index for gross
domestic purchases increased 2.6 percent during 2011, compared with an increase of 1.4 percent during
2010.

                                          Corporate Profits

	Profits from current production (corporate profits with inventory valuation and capital
consumption adjustments) increased $16.8 billion in the fourth quarter, compared with an increase of
$32.5 billion in the third quarter.  Current-production cash flow (net cash flow with inventory valuation
adjustment) -- the internal funds available to corporations for investment -- increased $44.8 billion in the
fourth quarter, compared with an increase of $35.8 billion in the third.

	 Taxes on corporate income decreased $0.7 billion in the fourth quarter, compared with a
decrease of $9.1 billion in the third.  Profits after tax with inventory valuation and capital consumption
adjustments increased $17.5 billion in the fourth quarter, compared with an increase of $41.6 billion in
the third.  Dividends increased $10.3 billion, compared with an increase of $14.0 billion; current-
production undistributed profits increased $7.2 billion, compared with an increase of $27.7 billion.

	Domestic profits of financial corporations increased $29.9 billion in the fourth quarter, compared
with an increase of $9.2 billion in the third.  Domestic profits of nonfinancial corporations increased
$28.4 billion in the fourth quarter, compared with an increase of $17.9 billion in the third.  In the fourth
quarter, real gross value added of nonfinancial corporations increased, and profits per unit of real value
added increased.  The increase in unit profits reflected decreases in both unit labor and nonlabor costs
that more than offset a decrease in unit prices.

	The rest-of-the-world component of profits decreased $41.5 billion in the fourth quarter, in
contrast to an increase of $5.4 billion in the third.  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 fourth-quarter
decrease was accounted for by a decrease in receipts and an increase 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.  This measure
reflects depreciation-accounting practices used for federal income tax returns.  According to this
measure, domestic profits of both financial and nonfinancial corporations increased.  The increase in
nonfinancial corporations reflected increases in all the major subaggregates shown, except for “other”
nonfinancial.  The largest increases were in retail trade and in manufacturing.  Within manufacturing, a
large decrease in petroleum and coal products was more than offset by increases in the remaining
industries shown.

	Profits before tax decreased $8.3 billion in the fourth quarter, in contrast to an increase of $22.3
billion in the third.  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 a tax-return, historical-cost basis to
the current-cost measures used in the national income and product accounts.  The capital consumption
adjustment decreased $1.8 billion in the fourth quarter (from $102.7 billion to $100.9 billion), compared
with a decrease of $4.6 billion in the third.  The inventory valuation adjustment increased $26.9 billion
(from -$45.5 billion to -$18.6 billion), compared with an increase of $14.9 billion.


                                       Corporate Profits in 2011

	Profits from current production increased 7.9 percent in 2011, compared with an increase of 32.2
percent in 2010.  Domestic profits increased 6.7 percent, compared with an increase of 41.6 percent.
The rest-of-the-world component of profits increased 12.4 percent, compared with an increase of 6.0
percent.

	Taxes on corporate income increased 1.3 percent in 2011, compared with an increase of 50.9
percent in 2010.  Profits after tax with inventory valuation and capital consumption adjustments
increased 9.9 percent, compared with an increase of 27.5 percent.  Dividends increased 10.3 percent,
compared with an increase of 18.9 percent; current-production undistributed profits increased 9.4
percent, compared with an increase of 38.8 percent.

	According to the measure of profits before tax with inventory valuation adjustment, domestic
profits of financial corporations decreased in 2011, and domestic profits of nonfinancial corporations
increased.  The increase in nonfinancial corporations reflected increases in manufacturing, information,
and “other” nonfinancial industries that were partly offset by decreases in utilities, retail trade,
transportation and warehousing, and wholesale trade.  Within manufacturing, the largest increase was in
petroleum and coal products.



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                          Next release -- April 27, 2012, at 8:30 A.M. EDT for:
                    Gross Domestic Product:  First Quarter 2012 (Advance Estimate)