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EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Thursday, March 26, 2020

BEA 20—13

Gross Domestic Product, Fourth Quarter and Year 2019 (Third Estimate); Corporate Profits, Fourth Quarter and Year 2019

Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the fourth quarter of 2019 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP also increased 2.1 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 2.1 percent. In the third estimate, an upward revision to personal consumption expenditures (PCE) was largely offset by downward revisions to federal government spending and nonresidential fixed investment (see "Updates to GDP" on page 2).

Real GDP: Percent change from preceding quarter

The increase in real GDP in the fourth quarter reflected positive contributions from PCE, exports, residential fixed investment, federal government spending, and state and local government spending that were partly offset by negative contributions from private inventory investment and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased (table 2).

Real GDP growth in the fourth quarter was the same as that in the third. In the fourth quarter, a downturn in imports and an acceleration in government spending were offset by a larger decrease in private inventory investment and a slowdown in PCE.

Real gross domestic income (GDI) increased 2.6 percent in the fourth quarter, compared with an increase of 1.2 percent in the third quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.4 percent in the fourth quarter, compared with an increase of 1.7 percent in the third quarter (table 1).

Current‑dollar GDP increased 3.5 percent, or $186.6 billion, in the fourth quarter to a level of $21.73 trillion. In the third quarter, current-dollar GDP increased 3.8 percent, or $202.2 billion (tables 1 and 3).

The price index for gross domestic purchases increased 1.4 percent in the fourth quarter, the same increase as in the third quarter (table 4). The PCE price index increased 1.4 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.3 percent, compared with an increase of 2.1 percent.

More information on the source data that underlie the estimates is available in the "Key Source Data and Assumptions" file on BEA's website.

Updates to GDP

In the third estimate, the fourth-quarter growth rate in real GDP was unrevised from the second estimate. PCE, residential investment, and state and local government spending were revised up. These upward revisions were offset by downward revisions to federal government spending and nonresidential fixed investment as well as an upward revision to imports. For more information, see the Technical Note. For information on updates to GDP, see the "Additional Information" section that follows.

	Advance Estimate	Second Estimate	Third Estimate
	(Percent change from preceding quarter)
Real GDP	2.1	2.1	2.1
Current-dollar GDP	3.6	3.5	3.5
Real GDI	...	...	2.6
Average of Real GDP and Real GDI	...	...	2.4
Gross domestic purchases price index	1.5	1.4	1.4
PCE price index	1.6	1.3	1.4
PCE price index excluding food and energy	1.3	1.2	1.3

GDP for 2019

Real GDP increased 2.3 percent in 2019 (from the 2018 annual level to the 2019 annual level), compared with an increase of 2.9 percent in 2018 (table 1).

The increase in real GDP in 2019 reflected positive contributions from PCE, nonresidential fixed investment, federal government spending, state and local government spending, and private inventory investment that were partly offset by a negative contribution from residential fixed investment. Imports increased (table 2).

The deceleration in real GDP in 2019, compared to 2018, primarily reflected decelerations in nonresidential fixed investment, exports, and PCE which were partly offset by accelerations in both state and local and federal government spending. Imports increased less in 2019 than in 2018.

Current-dollar GDP increased 4.1 percent, or $847.5 billion, in 2019 to a level of $21.43 trillion, compared with an increase of 5.4 percent, or $1,060.8 billion, in 2018 (table 1 and table 3).

Real GDI increased 1.9 percent in 2019, compared with an increase of 2.5 percent in 2018 (table 1).

The price index for gross domestic purchases increased 1.5 percent in 2019, compared with an increase of 2.4 percent in 2018 (table 4). The PCE price index increased 1.4 percent, compared with an increase of 2.1 percent. Excluding food and energy prices, the PCE price index increased 1.6 percent, compared with an increase of 1.9 percent (table 4).

Measured from the fourth quarter of 2018 to the fourth quarter of 2019, real GDP increased 2.3 percent during the period. That compared with an increase of 2.5 percent during 2018. Real GDI, as measured from the fourth quarter of 2018 to the fourth quarter of 2019, increased 2.0 percent during 2019. That compared with an increase of 2.3 percent during 2018 (table 6).

The price index for gross domestic purchases, as measured from the fourth quarter of 2018 to the fourth quarter of 2019, increased 1.4 percent during 2019. That compared with an increase of 2.2 percent during 2018. The PCE price index increased 1.4 percent, compared with an increase of 1.9 percent. Excluding food and energy, the PCE price index increased 1.6 percent, compared with an increase of 1.9 percent (table 6).

Corporate Profits, Fourth Quarter and 2019

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $53.0 billion in the fourth quarter, in contrast to a decrease of $4.7 billion in the third quarter (table 10).

Profits of domestic financial corporations increased $0.7 billion in the fourth quarter, in contrast to a decrease of $4.7 billion in the third quarter. Profits of domestic nonfinancial corporations increased $53.7 billion, in contrast to a decrease of $5.5 billion. Rest-of-the-world profits decreased $1.4 billion, in contrast to an increase of $5.5 billion. In the fourth quarter, receipts increased $3.4 billion, and payments increased $4.8 billion.

In 2019, profits from current production were unchanged, compared with an increase of $68.7 billion in 2018. Profits of domestic financial corporations increased $7.1 billion, compared with an increase of $11.1 billion. Profits of domestic nonfinancial corporations decreased $36.4 billion, in contrast to an increase of $10.0 billion. Rest-of-the-world profits increased $29.3 billion, compared with an increase of $47.6 billion.

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Next release, April 29, 2020 at 8:30 A.M. EDT
Gross Domestic Product, First Quarter 2020 (Advance Estimate)

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Full Release & Tables (PDF)

Technical Note (PDF)

Tables Only (Excel)

Release Highlights (PDF)

Historical Comparisons (PDF)

Key source data and assumptions (Excel)

Revision Information

GDP

Lisa Mataloni

301-278-9083

gdpniwd@bea.gov

Corporate Profits

Kate Pinard

301-278-9417

cpniwd@bea.gov

Media

Connie O'Connell

301-278-9003

Connie.OConnell@bea.gov

Resources

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NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts

Definitions

Gross domestic product (GDP) is the value of the goods and services produced by the nation's economy less the value of the goods and services used up in production. GDP is also equal to the sum of personal consumption expenditures, gross private domestic investment, net exports of goods and services, and government consumption expenditures and gross investment.

Gross domestic income (GDI) is the sum of incomes earned and costs incurred in the production of GDP. In national economic accounting, GDP and GDI are conceptually equal. In practice, GDP and GDI differ because they are constructed using largely independent source data.

Current-dollar estimates are valued in the prices of the period when the transactions occurred—that is, at "market value." Also referred to as "nominal estimates" or as "current-price estimates."

Real values are inflation-adjusted estimates—that is, estimates that exclude the effects of price changes.

The gross domestic purchases price index measures the prices of final goods and services purchased by U.S. residents.

The personal consumption expenditure price index measures the prices paid for the goods and services purchased by, or on the behalf of, "persons."
Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. t includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.

Disposable personal income is the income available to persons for spending or saving. It is equal to personal income less personal current taxes.

Personal outlays is the sum of personal consumption expenditures, personal interest payments, and personal current transfer payments.

Personal saving is personal income less personal outlays and personal current taxes.

The personal saving rate is personal saving as a percentage of disposable personal income.

Profits from current production, referred to as corporate profits with inventory valuation adjustment (IVA) and capital consumption (CCAdj) adjustment in the National Income and Product Accounts (NIPAs), is a measure of the net income of corporations before deducting income taxes that is consistent with the value of goods and services measured in GDP. The IVA and CCAdj are adjustments that 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 national income and product accounts. Profits for domestic industries reflect profits for all corporations located within the geographic borders of the United States. The rest-of-the-world (ROW) component of profits is measured as the difference between profits received from ROW and profits paid to ROW.

For more definitions, see the Glossary: National Income and Product Accounts.

Statistical conventions

Annual-vs-quarterly rates. Quarterly seasonally adjusted values are expressed at annual rates, unless otherwise specified. This convention is used for BEA's featured, seasonally adjusted measures to facilitate comparisons with related and historical data. For details, see the FAQ "Why does BEA publish estimates at annual rates?" Quarterly not seasonally adjusted values are expressed only at quarterly rates.

Percent changes.Percent changes in quarterly seasonally adjusted series are displayed at annual rates, unless otherwise specified. For details, see the FAQ "How is average annual growth calculated?" Percent changes in quarterly not seasonally adjusted values are calculated from the same quarter one year ago. All published percent changes are calculated from unrounded data.

Calendar years and quarters. Unless noted otherwise, annual and quarterly data are presented on a calendar basis.

Quantities and prices. Quantities, or "real" volume measures, and prices are expressed as index numbers with a specified reference year equal to 100 (currently 2012). Quantity and price indexes are calculated using a Fisher-chained weighted formula that incorporates weights from two adjacent periods (quarters for quarterly data and annuals for annual data). For details on the calculation of quantity and price indexes, see Chapter 4: Estimating Methods in the NIPA Handbook.

Chained-dollar values are calculated by multiplying the quantity index by the current dollar value in the reference year (2012) and then dividing by 100. Percent changes calculated from real quantity indexes and chained-dollar levels are conceptually the same; any differences are due to rounding. Chained-dollar values are not additive because the relative weights for a given period differ from those of the reference year. In tables that display chained-dollar values, a "residual" line shows the difference between the sum of detailed chained-dollar series and its corresponding aggregate.

Updates to GDP

BEA releases three vintages of the current quarterly estimate for GDP: "Advance" estimates are released near the end of the first month following the end of the quarter and are based on source data that are incomplete or subject to further revision by the source agency; "second" and "third" estimates are released near the end of the second and third months, respectively, and are based on more detailed and more comprehensive data as they become available.

The table below shows the average revisions to the quarterly percent changes in real GDP between different estimate vintages, without regard to sign.

Vintage	Average Revision Without Regard to Sign (percentage points, annual rates)
Advance to second	0.5
Advance to third	0.6
Second to third	0.3
Note - Based on estimates from 1993 through 2018. For more information on GDP updates, see Revision Information on the BEA Web site.

Annual and comprehensive updates are typically released in late July. Annual updates generally cover at least the 5 most recent calendar years (and their associated quarters) and incorporate newly available major annual source data as well as some changes in methods and definitions to improve the accounts. Comprehensive (or benchmark) updates are carried out at about 5-year intervals and incorporate major periodic source data, as well as major conceptual improvements.

Unlike GDP, an advance current quarterly estimate of GDI is not released because data on domestic profits and on net interest of domestic industries are not available. For fourth quarter estimates, these data are not available until the third estimate.