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| Survey of Current Business: Business situation: preliminary estimates for the third quarter of 2004 |
THE growth of gross domestic product (GDP) picked up in the third quarter of 2004 and inflation slowed, according to the "preliminary" estimates of the national income and product accounts (NIPAs) (table 1 and chart 1). (1) Real disposable personal income decelerated. A similar picture of GDP growth and prices was shown in the "advance" estimates released in October; however, income growth decelerated more in the advance estimate.
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* Real GDP increased 3.9 percent in the third quarter after increasing 3.3 percent in the second. The advance estimate for the third quarter had shown a 3.7-percent increase. Net exports, consumer spending, and nonresidential fixed investment were revised up in the preliminary estimates, and inventory investment was revised down. (2)
* Prices of goods and services purchased by U.S. residents increased 1.8 percent, the same as in the advance estimate, after increasing 3.5 percent.
* Real disposable personal income increased 2.0 percent after increasing 2.8 percent. The advance estimate for the second quarter had shown a 1.4-percent increase.
The insurance transactions associated with the hurricanes that struck portions of the southern and eastern United States in August and September did not directly affect third-quarter GDP, because of the treatment of insurance services that was introduced as part of the 2003 comprehensive revision of the NIPAs. (3) Estimates of other, indirect, effects of the hurricanes are not available, because these effects may occur with a lag, and they generally cannot be disentangled from the regular source data that BEA uses to prepare the GDP estimates. However, as described in the section on corporate profits, some income-side measures were affected by the hurricanes, and estimates of those effects have been incorporated.
The acceleration in GDP growth in the third quarter mainly reflected a step-up in consumer spending and a smaller decrease in net exports than in the second quarter; these developments were partly offset by a downturn in inventory investment and by a slowdown in residential fixed investment.
* Consumer spending increased 5.1 percent and contributed 3.53 percentage points to GDP growth, 2.43 percentage points more than it contributed in the second quarter. Purchases of durable goods turned up, purchases of nondurable goods accelerated, and purchases of services stepped up slightly.
* Imports, which are subtracted in the calculation of GDP, increased 6.0 percent and subtracted 0.89 percentage point from third-quarter GDP growth, about half as much as they had subtracted in the second quarter. (Exports slowed somewhat, contributing 0.08 percentage point less to GDP growth than in the second quarter.)
* Inventory investment subtracted 0.91 percentage point from GDP growth after adding 0.78 percentage point in the second quarter. Real inventory stocks increased $35.9 billion in the third quarter after increasing $61.1 billion in the second quarter and $40.0 billion in the first quarter.
* Residential fixed investment increased 1.7 percent and contributed 0.10 percentage point to third-quarter GDP growth, 0.76 percentage point less than in the second quarter.
Government spending slowed and nonresidential fixed investment increased at about the same rate as in the second quarter.
* Government spending increased 1.2 percent and contributed 0.23 percentage point to third-quarter GDP growth, 0.18 percentage point less than in the second quarter.
* Nonresidential fixed investment increased 12.9 percent and contributed 1.27 percentage points, 0.06 percentage point more than in the second quarter. Investment in equipment and software accelerated somewhat, and investment in structures decreased slightly after increasing in the second quarter.
The preliminary estimates for the third quarter also show the following:
* Real final sales of domestic product (GDP less the change in private inventories) increased 4.9 percent after increasing 2.5 percent (table 2).
* The production of goods stepped up and the production of services accelerated slightly, but the production of structures turned down.
* Motor vehicle output turned up. Excluding motor vehicles, real GDP increased 3.7 percent after increasing 4.0 percent.
* Final sales of computers stepped up, increasing 20.9 percent after little change in the previous two quarters.
* Gross domestic purchases increased 4.0 percent after increasing 4.2 percent.
* The gross saving rate--saving from all sources as a percentage of gross national income--held steady at 13.9 percent. The net saving rate decreased to 1.2 percent from 2.1 percent in the second quarter. Net saving is a measure of the saving that is available for augmenting the stock of fixed assets; it equals gross saving less consumption of fixed capital (CFC). The decrease in the net saving rate reflected a large increase in the CFC that resulted from the estimated damage to the stock of private fixed assets caused by the third-quarter hurricanes.
Personal Consumption Expenditures
In the third quarter of 2004, real personal consumption expenditures stepped up to a 5.1-percent increase from a 1.6-percent increase in the second quarter (table 3 and chart 2). (Over the past 10 years, consumption spending has increased at an average annual rate of 3.7 percent.) Purchases of durable goods and non-durable goods made the largest contributions to the step-up, but purchases of services also contributed.
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In durable goods, purchases of motor vehicles and parts increased 28.6 percent after a 6.0-percent decrease in the second quarter. Net purchases of used autos and used light trucks turned up, and purchases of new light trucks increased sharply after a moderate increase. In contrast, purchases of new autos decreased after a small increase. Purchases of furniture and household equipment increased more than in the second quarter; in the third quarter, step-ups were posted by video and audio goods, by computers, and by furniture. "Other" durable goods (which includes jewelry and watches) turned up.
In nondurable goods, purchases of gasoline, fuel oil, and other energy goods and of clothing and shoes turned up, and purchases of food and of "other" nondurable goods accelerated.
In services, spending on electricity and gas decreased less than in the second quarter, and spending on recreation (which includes casino gambling), on medical care, and on housing accelerated. In contrast, spending on "other" services and on transportation slowed.
Factors frequently considered in the analysis of consumer spending were mixed in the third quarter (chart 3). The Index of Consumer Sentiment (prepared by the University of Michigan's Survey Research Center) increased after decreasing in the second quarter, and the unemployment rate dropped from 5.6 percent to 5.4 percent, but real disposable personal income registered a fourth consecutive below-average increase. (4)
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Private fixed investment
Real private fixed investment increased 8.8 percent in the third quarter after increasing 13.9 percent in the second (table 4 and chart 4). (5)
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Nonresidential. Real private nonresidential fixed investment increased 12.9 percent in the third quarter after increasing 12.5 percent in the second. Investment in equipment and software increased more than in the second quarter, and investment in structures decreased slightly after an increase.
The step-up in equipment and software reflected step-ups in industrial equipment, in transportation equipment, and in "other" equipment. In contrast, investment in information processing equipment and software increased less than in the second quarter. The step-up in industrial equipment primarily reflected an acceleration in special industry machinery and an upturn in metalworking machinery. In transportation equipment, light trucks accelerated, and autos and "other" trucks turned up; in contrast, aircraft turned down after a second-quarter rebound. In "other" equipment, the upturn was led by an acceleration in construction machinery. Within information processing equipment and software, "other" information processing equipment, computers and peripheral equipment, and software slowed.
The decrease in structures reflected a decrease in power and communication. The third-quarter decrease more than offset increases in the other components of structures; however, for all the components except manufacturing, the increases were less than in the second quarter. In manufacturing, the third-quarter increase followed four quarterly decreases.
Continued from page 1.
Conditions that are frequently considered in the analysis of investment spending have generally been favorable in recent quarters (chart 5). The capacity utilization rate for manufacturing, mining, and utilities increased slightly; this increase was the fifth consecutive quarterly increase. At 77.3 percent, the rate was 3.2 percentage points above its low in the second quarter of 2003, and it was at its highest level since the second quarter of 2001. Long-term interest rates decreased in the third quarter; the yield on AAA bonds has remained below 6 percent since the first quarter of 2003. Real final sales of domestic product stepped up somewhat, increasing 4.9 percent in the third quarter after an average increase of 3.2 percent in the preceding three quarters. Domestic corporations' profits from current production decreased after increasing for 11 consecutive quarters; third-quarter profits were reduced about $80 billion because of hurricanes (see the section "Corporate Profits").
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Residential. Real private residential investment slowed sharply in the third quarter, increasing 1.7 percent after increasing 16.5 percent in the second quarter. The slowdown mainly reflected a downturn in "other" structures, which includes brokers' commissions on the sale of residences. Both single-family and multifamily construction increased less than in the second quarter.
Inventory Investment
Real inventory investment decreased $25.2 billion, to $35.9 billion in the third quarter from $61.1 billion in the second (table 5 and chart 6). This decrease contrasted with a step-up of $21.1 billion in the second quarter.
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Retail trade inventories turned down in the third quarter. The downturn largely reflected a swing from accumulation to liquidation in inventories of motor vehicle dealers. Inventory investment of most other types of retail outlets also fell, but by much less than that of motor vehicle dealers.
Manufacturing inventories increased somewhat less than in the second quarter. A downturn in inventories of chemical manufacturing was partly offset by an acceleration in inventories of plastic and rubber products.
Wholesale trade inventories increased more in the third quarter than in the second quarter. The acceleration was more than accounted for by merchant wholesalers; the biggest contributions were made by an upturn in inventories of apparel wholesalers and an acceleration in inventories of miscellaneous durable goods.
Farm inventories increased more than in the second quarter. Crop inventories mainly accounted for the acceleration.
The ratio of real private nonfarm inventories to final sales of goods and structures decreased to 3.50 from 3.55. A ratio that includes all final sales of domestic businesses in the denominator decreased to 2.21 from 2.22. (6) Both ratios have been trending down for decades.
Exports and Imports
The growth of real exports of goods and services slowed somewhat in the third quarter, and the growth of real imports of goods and services slowed more sharply (table 6).
Real exports of goods and services increased 6.3 percent after increasing 7.3 percent (chart 7). Exports of goods increased 9.1 percent after increasing 6.0 percent. The acceleration reflected an upturn in exports of foods, feeds, and beverages and step-ups in exports of automotives and in "other" exports that were partly offset by a downturn in exports of nonautomotive consumer goods and by a slowdown in exports of industrial supplies and materials.
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Exports of services increased 0.2 percent after increasing 10.2 percent. The deceleration primarily reflected downturns in transfers under U.S. military sales contracts, in passenger fares, and in "other" transportation and decelerations in travel and in "other" private services.
Real imports of goods and services increased 6.0 percent after increasing 12.6 percent (chart 8). Imports of goods increased 5.6 percent after increasing 13.0 percent. A downturn in imports of nonautomotive consumer goods and a deceleration in nonautomotive capital goods were partly offset by an upturn in imports of petroleum.
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Imports of services also slowed, increasing 8.3 percent after increasing 10.6 percent. A deceleration in travel was partly offset by an acceleration in royalties and license fees.
Government Spending
Government spending increased 1.2 percent in the third quarter after increasing 2.2 percent in the second quarter (table 7 and chart 9). Spending by the Federal Government increased more than in the second quarter, and spending by state and local governments turned down.
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National defense spending increased 9.8 percent after increasing 1.9 percent. The step-up reflected an acceleration in consumption expenditures and an upturn in gross investment. The acceleration in consumption expenditures primarily reflected an acceleration in services. The upturn in gross investment was both in structures and in equipment and software; within equipment and software, investment in ships and missiles turned up.
Federal nondefense spending decreased 5.2 percent after increasing 4.4 percent. The downturn was primarily accounted for by a downturn in gross investment that mainly reflected a downturn in equipment and software. Consumption expenditures decreased more than in the second quarter, largely reflecting a downturn in consumption expenditures of nondurable goods.
At the state and local level, gross investment decreased 8.9 percent after increasing 10.0 percent; the downturn was mainly accounted for by structures. Consumption expenditures accelerated in the third quarter, primarily reflecting an acceleration in employee compensation.
Prices
Inflation as measured by the price index for gross domestic purchases was 1.8 percent in the third quarter; in the second quarter, inflation was 3.5 percent (table 8). The deceleration partly reflected a sharp deceleration in energy prices and a moderate deceleration in food prices. Excluding energy and food prices, the price index increased 1.6 percent in the third quarter after a 2.5-percent increase in the second (chart 10).
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Prices of goods and services purchased by consumers increased 1.1 percent after increasing 3.1 percent; food and energy prices increased less than in the second quarter. Excluding food and energy, prices paid by consumers increased 0.7 percent after increasing 1.7 percent.
Prices of private nonresidential fixed investment increased 1.0 percent after increasing 1.7 percent. Prices of equipment and software decreased after increasing slightly; in contrast, prices of structures increased more than in the second quarter.
Prices paid by government increased 3.4 percent after increasing 4.3 percent. Prices paid by the Federal Government slowed; both national defense and non-defense prices contributed to the deceleration. Prices paid by state and local governments increased 4.4 percent in the third quarter, 0.8 percentage point less than in the second.
The GDP price index, which measures the prices paid for goods and services produced in the United States, increased 1.3 percent, 0.5 percentage point less than the price index for gross domestic purchases. The smaller increase in the GDP price index reflected a smaller increase in export prices (which are included in the GDP price index) than in import prices (which are included in the price index for gross domestic purchases).
Revisions
The preliminary estimate of a 3.9-percent increase in real GDP in the third quarter is 0.2 percentage point more than the advance estimate released in October (table 9). In the past 20 years, the average revision, without regard to sign, from the advance estimate to the preliminary estimate has been 0.5 percentage point.
The upward revision to third-quarter real GDP reflected upward revisions to net exports and to consumer spending that were partly offset by a downward revision to inventory investment.
In the preliminary estimate, net exports added 0.35 percentage point more to the GDP growth rate than in the advance estimate. Exports increased more than previously reported, and imports (which are subtracted in the calculation of GDP) increased less. The revisions to both exports and imports mainly reflected the incorporation of newly available Census Bureau data on trade in goods for September.
Consumer spending contributed 0.30 percentage point more to GDP growth in the preliminary estimate than in the advance estimate. The upward revision to consumer spending mainly reflected the incorporation of revised Census Bureau data on retail sales for August and September.
Continued from page 2.
Inventory investment contributed 0.43 percentage point less to GDP growth in the preliminary estimate than in the advance estimate. Within inventory investment, nonfarm inventories were revised down, and farm inventories were revised up. The downward revision to nonfarm inventory investment reflected the incorporation of newly available Census Bureau data on inventories for September and revised data for August. The upward revision to farm inventories reflected the incorporation of newly available data from the Department of Agriculture.
In addition to these revised estimates for the third quarter, estimates of wages and salaries and of related series for the second quarter have been revised. These revisions reflect the incorporation of newly available tabulations of wages and salaries of employees covered by state unemployment insurance from the Bureau of Labor Statistics. Wage and salary accruals are now estimated to have increased $70.7 billion in the second quarter, an upward revision of $10.0 billion, and real disposable personal income (DPI) is now estimated to have increased 2.8 percent in the second quarter, an upward revision of 0.4 percentage point. Real DPI in the third quarter is now estimated to have increased 2.0 percent, an upward revision of 0.6 percentage point.
Corporate Profits
Profits from current production decreased $27.6 billion (2.4 percent at a quarterly rate) in the third quarter after increasing $8.3 billion (0.7 percent) in the second quarter (table 10).7 In the third quarter, profits of domestic industries decreased, and profits from the rest of the world increased; in contrast, in the second quarter, profits of domestic industries increased, and profits from the rest of the world decreased. (8)
Third-quarter profits from current production were reduced $79.7 billion (annual rate) because of Hurricanes Charley, Frances, Ivan, and Jeanne. Benefits paid by insurance companies reduced their profits by $69.3 billion. In addition, profits of other companies were reduced $10.4 billion by uninsured losses. (9)
Taxes on corporate income decreased $9.8 billion (3.6 percent) in the third quarter, and after-tax profits from current production decreased $17.8 billion (2.0 percent).
The decrease in profits of domestic industries was more than accounted for by financial corporations. Profits of financial corporations decreased $46.7 billion (13.4 percent) in the third quarter, reflecting the effect of the hurricanes on the profits of insurance companies; in the second quarter, profits of financial corporations decreased $7.9 billion (2.2 percent). In contrast, profits of nonfinancial corporations increased $10.2 billion (1.6 percent) in the third quarter after increasing $36.2 billion (6.0 percent) in the second. The third-quarter increase reflected an increase in gross value added, as both unit prices and profits per unit changed little.
Profits from the rest of the world increased $8.8 billion (4.7 percent) after decreasing $20.0 billion (9.7 percent). The turnaround reflected a downturn in payments by domestic affiliates to foreign parents, which are deducted in the calculation of profits from the rest of the world. These payments decreased $2.5 billion (2.1 percent) after increasing $26.6 billion (28.4 percent). Receipts from foreign affiliates of domestic parents increased at about the same rate in the third quarter as in the second.
Net cash flow from current production, a profits-related measure of internally generated funds available for investment, increased $20.4 billion. (10) The ratio of cash flow to nonresidential fixed investment, an indicator of the extent to which the current level of investment could be financed by internally generated corporate funds decreased to 104.4 in the third quarter from 106.2 in the second. However, the ratio remained above 100 for the eighth consecutive quarter.
Government Sector
"Net government saving," the difference between current receipts and expenditures, was -$367.7 billion in the third quarter of 2004, decreasing $6.0 billion from -$361.7 billion in the second quarter (table 11). (11) Net Federal Government saving decelerated in the third quarter, and net state and local government saving turned down.
Federal
Net Federal Government saving was -$376.2 billion in the third quarter of 2004, increasing $3.8 billion from -$380.0 billion in the second quarter. Both current receipts and current expenditures decelerated.
Current receipts. Federal Government current receipts increased $14.8 billion in the third quarter after increasing $33.8 billion in the second quarter. The deceleration was more than accounted for by decelerations in current tax receipts and in contributions for government social insurance. These decelerations were partly offset by an upturn in income receipts on assets.
Current tax receipts increased $5.4 billion after increasing $24.6 billion. The deceleration was more than accounted for by a downturn in taxes on corporate income, which decreased $7.8 billion after increasing $11.6 billion. The deceleration was also partly attributable to personal current taxes, which increased $12.9 billion after increasing $13.2 billion.
Contributions for government social insurance increased $8.7 billion after increasing $9.7 billion. The deceleration was mostly accounted for by contributions for social security (old-age, survivors, disability, and health insurance trust funds), which increased $7.6 billion after increasing $8.6 billion, reflecting a deceleration in wage and salary disbursements.
Income receipts on assets increased $0.6 billion after decreasing $0.7 billion. The upturn was mostly attributable to an upturn in interest receipts. Interest receipts from the rest of the world turned up, increasing $0.5 billion after decreasing $0.6 billion.
Current expenditures. Federal Government current expenditures increased $11.0 billion after increasing $22.8 billion. The deceleration was mostly accounted for by a downturn in interest payments and a slowdown in current transfer payments. The deceleration was partly offset by an acceleration in consumption expenditures.
Interest payments decreased $0.7 billion after increasing $9.6 billion. The downturn was mostly accounted for by a downturn in interest paid to persons and business, which decreased $5.3 billion after increasing $3.8 billion, reflecting lower interest expense payments on the public debt.
Current transfer payments increased $0.1 billion after increasing $2.0 billion. The slowdown was more than accounted for by "other current transfer payments," which decreased $11.0 billion after decreasing $4.8 billion; the third-quarter decrease was partly offset by an acceleration in government social benefits.
Grants-in-aid to state and local governments decreased $9.8 billion after increasing $5.9 billion. The downturn was more than accounted for by a downturn in grants for Medicaid, which decreased $17.8 billion after increasing $8.9 billion.
"Other current transfer payments to the rest of the world" decreased $1.2 billion after decreasing $10.7 billion. The second-quarter decrease followed a first-quarter increase that included a payment of $2.8 billion ($11.2 billion at an annual rate) to Israel and Egypt for economic support.
Government social benefits increased $11.2 billion after increasing $6.8 billion. The acceleration was mainly accounted for by government social benefits to persons, which increased $11.1 billion after increasing $6.8 billion. Payments for unemployment programs decreased $1.1 billion after decreasing $8.0 billion.
Consumption expenditures increased $12.7 billion after increasing $9.2 billion. The acceleration was more than accounted for by an acceleration in defense consumption expenditures. Nondefense consumption expenditures turned down.
Defense consumption expenditures increased $13.5 billion after increasing $8.4 billion. Expenditures for services accelerated, increasing $11.3 billion alter increasing $6.1 billion. These expenditures include expenditures for research and development, for transportation of materials, for travel, and for other services.
Nondefense consumption expenditures decreased $0.6 billion after increasing $0.7 billion. The downturn was more than accounted for by spending for nondurable goods, which decreased $1.3 billion after increasing $0.4 billion. Commodity Credit Corporation sales, which are treated as deductions from consumption expenditures, increased $3.2 billion after decreasing $1.4 billion.
State and local
Net state and local government saving was $8.5 billion in the third quarter of 2004, decreasing $9.8 billion from $18.3 billion in the second quarter. Current receipts turned down, and current expenditures decelerated.
Continued from page 3.
Current receipts. State and local government current receipts decreased $7.0 billion after increasing $33.3 billion. The downturn was more than accounted for by a downturn in current transfer receipts and by a deceleration in current tax receipts.
Current transfer receipts decreased $14.7 billion after increasing $8.1 billion. The downturn was mostly accounted for by the downturn in Federal grants-in-aid, which decreased $9.8 billion after in creasing $5.9 billion mainly because of a downturn in Medicaid grants. The downturn was also attributable to a downturn in "other" transfer receipts, specifically transfer receipts from business, which decreased $6.4 billion after increasing $0.7 billion, reflecting the effect of the hurricanes on the transactions of state-owned insurance enterprises in Florida and Louisiana.
Current tax receipts increased $7.4 billion after increasing $24.9 billion. The deceleration was mostly accounted for by a deceleration in personal current taxes, which increased $0.8 billion after increasing $10.8 billion, mainly as a result of a deceleration in personal income taxes.
Current expenditures. State and local government current expenditures increased $2.8 billion after increasing $26.9 billion. The deceleration was more than accounted for by a downturn in government social benefits.
Government social benefits decreased $11.1 billion after increasing $14.7 billion. The downturn was mostly accounted for by a downturn in Medicaid payments that had been boosted by an increase in the Federal matching rate for Medicaid as a result of the Job and Growth Tax Relief Reconciliation Act of 2003; this increase expired at the end of the second quarter of 2004.
Net lending or net borrowing
"Net lending or net borrowing (-)" is an alternative measure of the government fiscal position. Net lending is the financing requirement of the government sector, and it is derived as net government saving plus the consumption of fixed capital and "capital transfers received (net)" less gross investment and net purchases of nonproduced assets. (12)
Net borrowing increased $0.3 billion in the third quarter after decreasing $7.7 billion in the second quarter. Federal Government net borrowing increased $4.1 billion after decreasing $12.3 billion. The upturn was mainly accounted for by "capital transfers received (net)," which decreased $6.2 billion after increasing $1.2 billion. State and local government net borrowing turned down, decreasing $3.8 billion after increasing $4.6 billion.
Gross government investment turned down, decreasing $1.1 billion after increasing $13.6 billion. (13) Federal Government gross investment decreased $0.2 billion alter increasing $1.9 billion. State and local government gross investment decreased $0.8 billion after increasing $11.6 billion; the deceleration was mostly accounted for by a downturn in gross investment for structures, which decreased $1.2 billion after increasing $11.1 billion.
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Table 1. Real Gross Domestic Product and Components
[Seasonally adjusted at annual rates]
Change from preceding
period (percent)
2003 2004
IV I II III
Gross domestic product (GDP) 4.2 4.5 3.3 3.9
Personal consumption expenditures 3.6 4.1 1.6 5.1
Durable goods 3.9 2.2 -0.3 17.2
Nondurable goods 5.1 6.7 0.1 4.8
Services 2.8 3.3 2.7 2.9
Gross private domestic investment 13.9 12.3 19.0 2.8
Fixed investment 10.5 4.5 13.9 8.8
Nonresidential 11.0 4.2 12.5 12.9
Structures 7.9 -7.6 6.9 -0.3
Equipment and software 12.0 8.0 14.2 17.2
Residential 9.6 5.0 16.5 1.7
Change in private inventories
Net exports of goods and services
Exports 17.5 7.3 7.3 6.3
Goods 16.1 9.1 6.0 9.1
Services 20.6 3.4 10.2 0.2
Imports 17.1 10.6 12.6 6.0
Goods 18.4 12.7 13.0 5.6
Services 11.1 1.2 10.6 8.3
Government consumption
expenditures and gross
investment 1.6 2.5 2.2 1.2
Federal 4.8 7.1 2.7 4.7
National defense 11.6 10.6 1.9 9.8
Nondefense -7.5 0.2 4.4 -5.2
State and local -0.1 0.0 1.9 -0.8
Contribution to percent
change in real GDP
(percentage points)
2003 2004
IV I II III
Gross domestic product (GDP) 4.2 4.5 3.3 3.9
Personal consumption expenditures 2.50 2.90 1.10 3.53
Durable goods 0.33 0.19 -0.02 1.37
Nondurable goods 1.01 1.33 0.03 0.96
Services 1.15 1.39 1.10 1.21
Gross private domestic investment 2.04 1.86 2.85 0.46
Fixed investment 1.57 0.69 2.07 1.37
Nonresidential 1.07 0.42 1.21 1.27
Structures 0.18 -0.19 0.16 -0.01
Equipment and software 0.89 0.61 1.05 1.28
Residential 0.50 0.27 0.86 0.10
Change in private inventories 0.47 1.17 0.78 -0.91
Net exports of goods and services -0.66 -0.76 -1.06 -0.27
Exports 1.55 0.70 0.70 0.62
Goods 1.00 0.60 0.41 0.62
Services 0.56 0.10 0.30 0.01
Imports -2.22 -1.46 -1.77 -0.89
Goods -1.96 -1.43 -1.52 -0.69
Services -0.26 -0.03 -0.25 -0.20
Government consumption
expenditures and gross
investment 0.31 0.48 0.41 0.23
Federal 0.33 0.48 0.18 0.32
National defense 0.50 0.47 0.09 0.44
Nondefense -0.18 0.00 0.10 -0.12
State and local -0.02 0.00 0.23 -0.09
Share of
current-
dollar
GDP
(percent)
2004
III
Gross domestic product (GDP) 100.0
Personal consumption expenditures 70.1
Durable goods 8.5
Nondurable goods 20.2
Services 41.4
Gross private domestic investment 16.5
Fixed investment 16.2
Nonresidential 10.5
Structures 2.4
Equipment and software 8.1
Residential 5.7
Change in private inventories 0.3
Net exports of goods and services -5.2
Exports 10.1
Goods 7.0
Services 3.0
Imports 15.3
Goods 12.8
Services 2.5
Government consumption
expenditures and gross
investment 18.6
Federal 6.9
National defense 4.7
Nondefense 2.2
State and local 11.7
NOTE. Percent changes are from NIPA table 1.1.1, and contributions to
percent change are from NIPA table 1.1.2. Shares are from NIPA table
1.1.10.
Table 2. Real Gross Domestic Product by Type of Product
[Seasonally adjusted at annual rates]
Change from preceding
period (percent)
2003 2004
IV I II III
Gross domestic product (GDP) 4.2 4.5 3.3 3.9
Final sales of domestic
product 3.7 3.3 2.5 4.9
Change in private inventories
Goods 5.8 8.2 2.5 8.1
Services 3.1 3.0 2.3 2.6
Structures 5.4 0.7 12.7 -1.3
Addenda:
Motor vehicle output 2.9 8.8 -15.2 10.1
GDP excluding motor vehicle
output 4.2 4.3 4.0 3.7
Final sales of computers 29.0 0.1 0.1 20.9
GDP excluding final sales of
computers 4.0 4.5 3.3 3.8
Contribution to percent
change in real GDP
(percentage points)
2003 2004
IV I II III
Gross domestic product (GDP) 4.2 4.5 3.3 3.9
Final sales of domestic
product 3.71 3.32 2.52 4.86
Change in private inventories 0.47 1.17 0.78 -0.91
Goods 1.90 2.65 0.82 2.60
Services 1.77 1.76 1.30 1.48
Structures 0.52 0.07 1.19 -0.13
Addenda:
Motor vehicle output 0.11 0.30 -0.58 0.33
GDP excluding motor vehicle
output 4.08 4.18 3.88 3.62
Final sales of computers 0.26 0.00 0.00 0.18
GDP excluding final sales of
computers 3.93 4.48 3.30 3.77
Share of
current-
dollar
GDP
(percent)
2004
III
Gross domestic product (GDP) 100.0
Final sales of domestic
product 99.7
Change in private inventories 0.3
Goods 32.7
Services 57.2
Structures 10.1
Addenda:
Motor vehicle output 3.4
GDP excluding motor vehicle
output 96.6
Final sales of computers 1.0
GDP excluding final sales of
computers 99.0
NOTE. Percent changes are from NIPA table 1.2.1, and contributions to
percent change are from NIPA table 1.2.2. Shares are calculated from
NIPA table 1.2.5.
Table 3. Real Personal Consumption Expenditures
[Seasonally adjusted at annual rates]
Change from preceding
period (percent)
2003 2004
IV I II III
Personal consumption
expenditures (PCE) 3.6 4.1 1.6 5.1
Durable goods 3.9 2.2 -0.3 17.2
Motor vehicles and parts -1.8 -5.8 -6.0 28.6
Furniture and household
equipment 9.8 11.1 7.4 11.6
Other (1) 7.4 6.2 -0.2 3.8
Nondurable goods 5.1 6.7 0.1 4.8
Food 2.6 8.1 2.3 4.2
Clothing and shoes 3.9 16.3 -5.3 6.1
Gasoline, fuel oil, and other
energy goods 19.1 -2.3 -13.2 3.5
Other (2) 5.8 3.1 4.5 5.6
Services 2.8 3.3 2.7 2.9
Housing 0.8 2.1 2.0 2.4
Household operation 7.5 3.2 -0.9 0.0
Electricity and gas 17.5 3.5 -8.0 -3.0
Other household operation 1.6 3.1 4.0 2.0
Transportation -0.5 2.0 2.9 1.5
Medical care 3.1 3.2 4.4 5.0
Recreation 4.0 5.9 0.3 2.8
Other (3) 3.2 4.4 3.3 2.5
Contribution to percent
change in real PCE
(percentage points)
2003 2004
IV I II III
Personal consumption
expenditures (PCE) 3.6 4.1 1.6 5.1
Durable goods 0.48 0.27 -0.03 1.96
Motor vehicles and parts -0.10 -0.33 -0.34 1.40
Furniture and household
equipment 0.41 0.45 0.31 0.48
Other (1) 0.17 0.15 -0.01 0.09
Nondurable goods 1.45 1.90 0.04 1.38
Food 0.36 1.10 0.32 0.59
Clothing and shoes 0.16 0.62 -0.22 0.24
Gasoline, fuel oil, and other
energy goods 0.47 -0.06 -0.42 0.10
Other (2) 0.46 0.25 0.35 0.44
Services 1.64 1.98 1.56 1.74
Housing 0.13 0.33 0.30 0.37
Household operation 0.41 0.18 -0.05 0.00
Electricity and gas 0.35 0.08 -0.18 -0.06
Other household operation 0.05 0.10 0.13 0.07
Transportation -0.02 0.07 0.11 0.05
Medical care 0.52 0.55 0.74 0.84
Recreation 0.16 0.24 0.01 0.12
Other (3) 0.44 0.61 0.45 0.36
Share of
current-
dollar
PCE
(percent)
2004
III
Personal consumption
expenditures (PCE) 100.0
Durable goods 12.2
Motor vehicles and parts 5.5
Furniture and household
equipment 4.3
Other (1) 2.4
Nondurable goods 28.8
Food 14.0
Clothing and shoes 3.9
Gasoline, fuel oil, and other
energy goods 3.0
Other (2) 8.0
Services 59.0
Housing 15.1
Household operation 5.5
Electricity and gas 2.1
Other household operation 3.3
Transportation 3.7
Medical care 17.0
Recreation 4.1
Other (3) 13.8
(1.) Includes jewelry and watches, opthalmic products and orthopedic
equipment, books and maps, bicycles and motorcycles, guns and sporting
equipment, photographic equipment, boats, and pleasure aircraft.
(2.) Includes tobacco, toilet articles, drug preparations and sundries,
stationery and writing supplies, toys, film, flowers, clearing
preparations and paper products, semidurable house furnishings, and
magazines and newspapers.
(3.) Includes personal care, personal business, education and research,
religious and welfare activities, and net foreign travel.
NOTE. Percent changes are from NIPA table 2.3.1, and contributions to
percent change are from NIPA table 2.3.2. Shares are calculated from
NIPA table 2.3.5.
Table 4. Real Private Fixed Investment
[Seasonally adjusted at annual rates]
Change from preceding
period (percent)
2003 2004
IV I II III
Private fixed investment
(PFI) 10.5 4.5 13.9 8.8
Nonresidential 11.0 4.2 12.5 12.9
Structures 7.9 -7.6 6.9 -0.3
Commercial and health care -6.3 -9.1 21.3 0.6
Manufacturing -4.1 -16.8 -14.2 18.3
Power and communication 71.4 -13.4 -37.0 -21.1
Mining exploration, shafts,
and wells 13.7 6.7 20.0 9.6
Other structures (1) 2.3 -7.0 16.8 1.8
Equipment and software 12.0 8.0 14.2 17.2
Information processing
equipment and software 16.3 16.4 14.1 7.6
Computers and peripheral
equipment 31.5 6.5 26.5 21.0
Software (2) 9.3 16.9 8.7 7.3
Other (3) 15.0 22.1 12.7 0.9
Industrial equipment -4.5 6.6 2.1 27.2
Transportation equipment 11.9 -15.0 26.1 35.4
Other equipment (4) 16.5 8.3 16.1 23.0
Residential 9.6 5.0 16.5 1.7
Structures 9.5 4.9 16.7 1.6
Permanent site 21.6 6.8 9.0 3.0
Single family 24.8 7.2 8.9 2.6
Multifamily -4.4 2.9 9.8 6.1
Other structures (5) 7.2 2.1 30.5 -0.5
Equipment 2.7 11.9 3.7 8.8
Contribution to percent
change change in real PFI
(percentage points)
2003 2004
IV I II III
Private fixed investment
(PFI) 10.5 4.5 13.9 8.8
Nonresidential 7.20 2.73 8.11 8.19
Structures 1.22 -1.19 1.07 -0.05
Commercial and health care -0.42 -0.60 1.24 0.04
Manufacturing -0.03 -0.15 -0.12 0.13
Power and communication 1.30 -0.35 -1.03 -0.48
Mining exploration, shafts,
and wells 0.29 0.14 0.42 0.21
Other structures (1) 0.08 -0.25 0.55 0.06
Equipment and software 5.97 3.92 7.05 8.24
Information processing
equipment and software 4.11 4.01 3.67 1.96
Computers and peripheral
equipment 1.70 0.37 1.47 1.16
Software (2) 0.91 1.54 0.87 0.71
Other (3) 1.50 2.10 1.33 0.10
Industrial equipment -0.36 0.52 0.17 1.99
Transportation equipment 0.92 -1.26 1.88 2.48
Other equipment (4) 1.31 0.66 1.32 1.81
Residential 3.34 1.75 5.76 0.64
Structures 3.28 1.70 5.74 0.60
Permanent site 4.25 1.43 1.99 0.66
Single family 4.34 1.37 1.78 0.53
Multifamily -0.09 0.06 0.21 0.13
Other structures (5) -0.97 0.27 3.75 -0.06
Equipment 0.06 0.05 0.02 0.04
Share of
current-
dollar PFI
(percent)
2004
III
Private fixed investment
(PFI) 100.0
Nonresidential 64.6
Structures 14.7
Commercial and health care 6.3
Manufacturing 0.8
Power and communication 2.0
Mining exploration, shafts,
and wells 2.3
Other structures (1) 3.4
Equipment and software 49.9
Information processing
equipment and software 25.4
Computers and peripheral
equipment 5.8
Software (2) 9.5
Other (3) 10.0
Industrial equipment 8.1
Transportation equipment 8.0
Other equipment (4) 8.5
Residential 35.4
Structures 34.9
Permanent site 21.7
Single family 19.6
Multifamily 2.1
Other structures (5) 13.2
Equipment 0.5
(1.) Consists primarily of religious, educational, vocational, lodging,
railroads, farm, and amusement and recre-ational structures, net
purchases of used structures, and brokers' commissions on the sale of
structures.
(2.) Excludes software "embedded," or bundled, in computers and other
equipment.
(3.) Includes communication equipment, nonmedical instruments, medical
equipment and instruments, photocopy and related equipment, and office
and accounting equipment.
(4.) Consists primarily of furniture and fixtures, agricultural
machinery, construction machinery, mining and oiltield machinery,
service industry machinery, and electrical equipment not elsewhere
classified.
(5.) Consists primarily of manufactured homes, improvements,
dormitories, net purchases of used structures, and brokers'
commissions on the sale of residential structures.
NOTE. Percent changes are from NIPA table 5.3.1, and contributions to
percent change are from NIPA table 5.3.2. Shares are calculated from
NIPA table 5.3.5.
Table 5. Real Change in Private Inventories, by Industry
[Billions of chained (2000) dollars; seasonally adjusted at annual
rates]
Level
2003
III IV
Change in private
inventories (CIPI) -3.5 8.6
Farm -0.7 3.5
Mining, utilities, and construction 1.2 3.5
Manufacturing -20.4 -13.1
Durable-goods industries -17.7 -1.8
Nondurable-goods industries -2.9 -10.9
Wholesale trade 2.3 4.0
Durable-goods industries -6.9 9.7
Nondurable-goods industries 8.6 -5.2
Retail trade 13.7 9.4
Motor vehicle and parts dealers 4.3 -0.9
Food and beverage stores 0.8 -2.1
General merchandise stores 0.6 3.3
Other retail stores 8.2 9.2
Other industries 0.5 0.8
Residual (1) 0.5 -0.5
Addenda: Ratios of private
inventories to final sales of
domestic business:
Private inventories to final sales 2.45 2.42
Nonfarm inventories to final
sales 2.24 2.22
Nonfarm inventories to final
sales of goods and structures 3.59 3.55
Level
2004
I II III
Change in private
inventories (CIPI) 40.0 61.1 35.9
Farm 5.1 3.0 3.9
Mining, utilities, and construction -4.5 -1.7 5.1
Manufacturing 3.0 9.1 7.5
Durable-goods industries -2.2 5.9 6.2
Nondurable-goods industries 5.0 3.3 1.4
Wholesale trade 8.5 20.0 32.5
Durable-goods industries 11.1 16.4 25.5
Nondurable-goods industries -2.0 4.0 7.5
Retail trade 25.6 29.9 -19.2
Motor vehicle and parts dealers 18.7 17.1 -22.7
Food and beverage stores 0.3 1.6 -0.2
General merchandise stores 3.0 2.7 0.7
Other retail stores 4.3 8.9 1.9
Other industries 2.8 2.3 4.2
Residual (1) -1.6 -2.4 2.4
Addenda: Ratios of private
inventories to final sales of
domestic business:
Private inventories to final sales 2.42 2.43 2.41
Nonfarm inventories to final
sales 2.22 2.22 2.21
Nonfarm inventories to final
sales of goods and structures 3.54 3.55 3.50
Change from preceding
quarter
2003 2004
IV I II III
Change in private
inventories (CIPI) 12.1 31.4 21.1 -25.2
Farm 4.2 1.6 -2.1 0.9
Mining, utilities, and construction 2.3 -8.0 2.8 6.8
Manufacturing 7.3 16.1 6.1 -1.6
Durable-goods industries 15.9 -0.4 8.1 0.3
Nondurable-goods industries -8.0 15.9 -1.7 -1.9
Wholesale trade 1.7 4.5 11.5 12.5
Durable-goods industries 16.6 1.4 5.3 9.1
Nondurable-goods industries -13.8 3.2 6.0 3.5
Retail trade 4.3 16.2 4.3 -49.1
Motor vehicle and parts dealers -5.2 19.6 -1.6 -39.8
Food and beverage stores -2.9 2.4 1.3 -1.8
General merchandise stores 2.7 -0.3 -0.3 -2.0
Other retail store 1.0 -4.9 4.6 -7.0
Other industries 0.3 2.0 -0.5 1.9
Residual (1) -1.0 -1.1 -0.8 4.8
Addenda: Ratios of private
inventories to final sales of
domestic business:
Private inventories to final sales
Nonfarm inventories to final
sales
Nonfarm inventories to final
sales of goods and structures
(1.) The residual is the difference between the first line and the sum
of the most detailed lines. It reflects the fact that chained-dollar
estimates are usually not additive, because the quantity indexes on
which they are based embody weights of more than one period.
NOTE. Real change in private inventories is from NIPA table 5.6.6B, and
ratios of private inventories to final sales of domestic business are
from NIPA table 5.7.6B.
Table 6. Real Exports and Imports of Goods and Services
[Seasonally adjusted at annual rates]
Change from preceding period
(percent)
2003 2004
IV I II III
Exports of goods and
services 17.5 7.3 7.3 6.3
Exports of goods (1) 16.1 9.1 6.0 9.1
Foods, feeds, and beverages -6.0 -30.0 -24.3 28.3
Industrial supplies and
materials 5.2 14.4 6.9 0.3
Capital goods, except
automotive 31.0 13.1 6.2 6.2
Automotive vehicles, engines,
and parts 14.8 5.1 8.2 35.0
Consumer goods, except
automotive 11.3 18.6 18.2 -0.3
Other 7.3 11.4 16.1 27.7
Exports of services (1) 20.6 3.4 10.2 0.2
Imports of goods and
services 17.1 10.6 12.6 6.0
Imports of goods (1) 18.4 12.7 13.0 5.6
Foods, feeds, and beverages 18.9 2.3 7.4 -10.1
Industrial supplies and
materials, except
petroleum and products 0.7 16.9 38.2 25.2
Petroleum and products 16.5 39.1 -33.1 5.3
Capital goods, except
automotive 26.0 13.4 30.6 13.9
Automotive vehicles, engines,
and parts 21.7 6.0 10.1 3.2
Consumer goods, except
automotive 21.9 9.6 20.5 -9.7
Other 11.8 -2.2 -10.7 16.4
Imports of services (1) 11.1 1.2 10.6 8.3
Addenda:
Exports of agricultural goods (2) -19.1 -23.2 -19.1 24.6
Exports of nonagricultural
goods 20.1 12.7 8.5 7.9
Imports of nonpetroleum
goods 18.6 9.8 20.9 5.6
Contribution to percent change
in real exports and imports
(percentage points)
2003 2004
IV I II III
Exports of goods and
services 17.5 7.3 7.3 6.3
Exports of goods (1) 11.21 6.30 4.19 6.28
Foods, feeds, and beverages -0.32 -1.83 -1.35 1.21
Industrial supplies and
materials 0.87 2.23 1.14 0.04
Capital goods, except
automotive 8.25 3.61 1.75 1.75
Automotive vehicles, engines,
and parts 1.13 0.38 0.60 2.33
Consumer goods, except
automotive 0.99 1.50 1.49 -0.03
Other 0.28 0.41 0.57 0.98
Exports of services (1) 6.24 1.04 3.06 0.05
Imports of goods and
services 17.1 10.6 12.6 6.0
Imports of goods (1) 15.11 10.41 10.82 4.67
Foods, feeds, and beverages 0.68 0.08 0.27 -0.37
Industrial supplies and
materials, except
petroleum and products 0.16 1.87 3.97 2.95
Petroleum and products 1.33 3.13 -3.88 0.51
Capital goods, except
automotive 4.83 2.55 5.43 2.57
Automotive vehicles, engines,
and parts 2.88 0.82 1.33 0.42
Consumer goods, except
automotive 4.64 2.08 4.21 -2.12
Other 0.60 -0.11 -0.51 0.70
Imports of services (1) 1.97 0.21 1.78 1.36
Addenda:
Exports of agricultural goods (2)
Exports of nonagricultural
goods
Imports of nonpetroleum
goods
Share of
current-
dollar
exports
and
imports
(percent)
2004
III
Exports of goods and
services 100.0
Exports of goods (1) 70.0
Foods, feeds, and beverages 4.6
Industrial supplies and
materials 17.0
Capital goods, except
automotive 28.1
Automotive vehicles, engines,
and parts 7.8
Consumer goods, except
automotive 8.6
Other 4.0
Exports of services (1) 30.0
Imports of goods and
services 100.0
Imports of goods (1) 83.5
Foods, feeds, and beverages 3.4
Industrial supplies and
materials, except
petroleum and products 13.2
Petroleum and products 10.0
Capital goods, except
automotive 19.4
Automotive vehicles, engines,
and parts 12.8
Consumer goods, except
automotive 20.2
Other |
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