International Financial Law Prof Blog

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

Saturday, July 7, 2018

National Income and Product Accounts Gross Domestic Product: First Quarter 2018 (Third Estimate) Corporate Profits: First Quarter 2018 (Revised Estimate)

Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the first quarter of 2018
(table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth
quarter, real GDP increased 2.9 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 2.2 percent.
With this third estimate for the first quarter, the general picture of economic growth remains the same;
private inventory investment and personal consumption expenditures (PCE) were revised down (see
"Updates to GDP" on page 2).

Real GDP: Percent Change from Preceding Quarter
Real gross domestic income (GDI) increased 3.6 percent in the first quarter, compared with an increase
of 1.0 percent in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of
U.S. economic activity that equally weights GDP and GDI, increased 2.8 percent in the first quarter,
compared with an increase of 2.0 percent in the fourth quarter (table 1).

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

The deceleration in real GDP growth in the first quarter reflected decelerations in PCE, exports, state
and local government spending, and federal government spending and a downturn in residential fixed
investment. These movements were partly offset by a smaller decrease in private inventory investment
and a larger increase in nonresidential fixed investment. Imports, which are a subtraction in the
calculation of GDP, decelerated.

Current-dollar GDP increased 4.2 percent, or $206.0 billion, in the first quarter to a level of $19.96
trillion. In the fourth quarter, current-dollar GDP increased 5.3 percent, or $253.5 billion (table 1 and
table 3).

The price index for gross domestic purchases increased 2.7 percent in the first quarter, compared with
an increase of 2.5 percent in the fourth quarter (table 4). The PCE price index increased 2.5 percent,
compared with an increase of 2.7 percent. Excluding food and energy prices, the PCE price index
increased 2.3 percent, compared with an increase of 1.9 percent (appendix table A).


Updates to GDP

The percent change in real GDP was revised down 0.2 percentage point from the second estimate,
reflecting downward revisions to private inventory investment, PCE, and exports that were partly offset
by an upward revision to nonresidential fixed investment. Imports were revised up. 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  Third Estimate
			             (Percent change from preceding quarter)

Real GDP                               2.3               2.2              2.0
Current-dollar GDP                     4.3               4.2              4.2
Real GDI                                …                2.8              3.6
Average of Real GDP and Real GDI        …                2.5              2.8
Gross domestic purchases price index   2.8               2.7              2.7
PCE price index                        2.7               2.6              2.5


Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital
consumption adjustment) increased $39.5 billion in the first quarter, in contrast to a decrease of $1.1
billion in the fourth quarter.

Profits of domestic financial corporations increased $7.0 billion in the first quarter, in contrast to a
decrease of $14.6 billion in the fourth quarter. Profits of domestic nonfinancial corporations increased
$28.8 billion, compared with an increase of $19.4 billion. Rest-of-the-world  profits increased $3.7
billion, in contrast to a decrease of $5.9 billion. In the first quarter, receipts increased $20.9 billion, and
payments increased $17.2 billion.

https://lawprofessors.typepad.com/intfinlaw/2018/07/national-income-and-product-accounts-gross-domestic-product-first-quarter-2018-third-estimate-corporate-profits-first-qua.html

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