International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, September 14, 2017

National Income and Product Accounts Gross Domestic Product: Second Quarter 2017 (Second Estimate) Corporate Profits: Second Quarter 2017 (Preliminary Estimate)

Real gross domestic product (GDP) increased at an annual rate of 3.0 percent in the second quarter of
2017 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the
first quarter, real GDP increased 1.2 percent.

The GDP estimate released today is based on more complete source data than were available for the
"advance" estimate issued last month.  In the advance estimate, the increase in real GDP was 2.6
percent. With this second estimate for the second quarter, the general picture of economic growth
remains the same; increases in personal consumption expenditures (PCE) and in nonresidential fixed
investment were larger than previously estimated. These increases were partly offset by a larger
decrease in state and local government spending (see "Updates to GDP" below).

Real GDP: Percent Change from Preceding Quarter
Real gross domestic income (GDI) increased 2.9 percent in the second quarter, compared with an
increase of 2.7 percent (revised) in the first. The average of real GDP and real GDI, a supplemental
measure of U.S. economic activity that equally weights GDP and GDI, increased 3.0 percent in the
second quarter, compared with an increase of 2.0 percent in the first quarter (table 1).

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

The acceleration in real GDP in the second quarter primarily reflected upturns in private inventory
investment and federal government spending and an acceleration in PCE that were partly offset by
downturns in residential fixed investment and state and local government spending and a deceleration
in exports.

Current-dollar GDP increased 4.0 percent, or $189.0 billion, in the second quarter to a level of $19,246.7
billion. In the first quarter, current-dollar GDP increased 3.3 percent, or $152.2 billion (table 1 and table
3).

The price index for gross domestic purchases increased 0.8 percent in the second quarter, compared
with an increase of 2.6 percent in the first quarter (table 4). The PCE price index increased 0.3 percent,
compared with an increase of 2.2 percent. Excluding food and energy prices, the PCE price index
increased 0.9 percent, compared with an increase of 1.8 percent (appendix table A).


Updates to GDP

The percent change in real GDP was revised up from the advance estimate, reflecting upward revisions
to PCE and to nonresidential fixed investment that were partly offset by a downward revision to state
and local government spending. For more information, see the Technical Note. A detailed "Key Source
Data and Assumptions" file is also posted for each release.  For information on updates to GDP, see the
“Additional Information” section that follows.

                                    Advance Estimate        Second Estimate
			           (Percent change from preceding quarter)
Real GDP                                  2.6                  3.0
Current-dollar GDP                        3.6                  4.0
Real GDI                                   …                   2.9
Average of Real GDP and Real GDI           …                   3.0
Gross domestic purchases price index      0.8                  0.8
PCE price index                           0.3                  0.3


For the first quarter of 2017, the percent change in real GDI was revised from 2.6 percent to 2.7 percent
based on revised first-quarter tabulations from the BLS Quarterly Census of Employment and Wages
program.

Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) increased $26.8 billion in the second quarter, in contrast to a decrease of
$46.2 billion in the first quarter.

Profits of domestic financial corporations decreased $29.4 billion in the second quarter, compared with
a decrease of $40.7 billion in the first quarter. Profits of domestic nonfinancial corporations increased
$64.8 billion, compared with an increase of $3.8 billion. The rest-of-the-world component of profits
decreased $8.6 billion, compared with a decrease of $9.3 billion. This measure is calculated as the
difference between receipts from the rest of the world and payments to the rest of the world. In the
second quarter, receipts increased $8.5 billion, and payments increased $17.1 billion.

http://lawprofessors.typepad.com/intfinlaw/2017/09/national-income-and-product-accounts-gross-domestic-product-second-quarter-2017-second-estimate-corporate-profits-second.html

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