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Technical Note
Gross Domestic Product
Third Quarter of 2012 (Second Estimate)
November 29, 2012
This technical note provides background information about the source data and
estimating methods used to produce the estimates presented in the GDP news release.
The complete set of estimates for the third quarter is available on BEA's Web site at
www.bea.gov; a brief summary of "highlights" is also posted on the Web site.  In a few
weeks, the estimates will be published in BEA's monthly journal, the Survey of Current
Business, along with a more detailed analysis of the estimates ("GDP and the

Sources of Revision to Real GDP

Real GDP increased 2.7 percent (annual rate) in the third quarter, an upward revision of
0.7 percentage point from the advance estimate.  The upward revision to real GDP
reflected upward revisions to private inventory investment and to exports that were partly
offset by downward revisions to consumer spending and to nonresidential fixed

*  The upward revision to inventory investment reflected upward revisions to the
   inventories of manufacturing, wholesale trade, and “other” industries and was based
   on newly available Census Bureau manufacturing and trade inventory data for
   September, revised data for August, and preliminary third-quarter Census quarterly
   financial report data for information industries.
*  The upward revision to exports was primarily to goods exports and reflected newly
   available Census goods data for September and revised data for August.
*  The downward revision to consumer spending reflected downward revisions to both
   goods and services.
   *  Within goods, the largest downward revision was to motor vehicle fuels,
      lubricants, and fluids based on newly available Energy Information Administration
      (EIA) data for August.
   *  Within services, the largest downward revisions were to financial services and
      insurance and to electricity and gas.  The revision to financial services was
      based on newly available third-quarter FOCUS report data from the Securities
      and Exchange Commission and on newly available Federal Reserve Board
      tabulations of third-quarter commercial bank Call Report data, and the revision to
      electricity and gas reflected newly available August usage and unit value data
      from EIA.
*   The downward revision to nonresidential fixed investment reflected downward
    revisions to investment in transportation equipment, in software, and in computers
    and peripheral equipment.  These revisions reflected newly available trade source
    data on motor vehicle registrations for September, the newly available data on
    exports and imports for September and revised data for August, and newly available
    software company revenue data.

The price index for gross domestic purchases increased 1.4 percent in the third quarter,
a downward revision of 0.1 percentage point.  The downward revision was to the price
index for consumer spending—specifically for financial services— and reflected the
newly available commercial bank Call Report data for the third quarter.

Gross Domestic Income and Corporate Profits

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 1.7 percent
in the third quarter.  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.

Profits from current production before taxes increased $67.3 billion, or 3.5 percent
(quarterly rate), in the third quarter.  Domestic profits of financial corporations increased
$71.3 billion, domestic profits of nonfinancial corporations decreased $1.0 billion, and
rest-of-the-world profits decreased $2.8 billion.

Revisions to Wages and Salaries, Disposable Personal Income, and GDI

In addition to presenting revised estimates for the third quarter, today's release also
presents revised estimates of second-quarter wages and salaries, personal taxes, and
contributions for government social insurance.  Wage and salary disbursements are now
estimated to have increased $23.3 billion in the second quarter of 2012, a downward
revision of $31.9 billion.  These estimates reflect newly available wage and salary
tabulations for the second quarter from the BLS quarterly census of employment and
wages (QCEW).  These data are more comprehensive than the monthly employment
and earnings data that were used for the earlier estimates—the QCEW data include
irregular pay, such as bonuses and gains from the exercise of stock options.

Real disposable personal income is now estimated to have increased 2.2 percent
(annual rate) in the second quarter and 0.5 percent in the third.  (By comparison, the
estimates that were available last month showed increases of 3.1 percent in the second
quarter and 0.8 percent in the third.)

The revision to second-quarter wages and salaries also resulted in a revision to GDI.
Real GDI is now estimated to have decreased 0.7 percent in the second quarter, a
downward revision of 0.9 percentage point.

Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606