Gross Domestic Product, 2nd quarter 2015 (second estimate); Corporate Profits, 2nd quarter 2015 (preliminary estimate)

Historical release narrative reproduced from the official public-domain U.S. Bureau of Economic Analysis source. Statistical tables, charts, standard technical appendices and administrative material are omitted; formatting is adapted for reading. Figures retain the release's original vintage and may have been revised. Consult the linked source for the complete release and current data.

Real gross domestic product -- 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, adjusted for price changes -- increased at an annual rate of 3.7 percent in the second quarter of 2015, according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.6 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 2.3 percent. With the second estimate for the second quarter, nonresidential fixed investment and private inventory investment increased. With the advance estimate, both of these components were estimated to have slightly decreased (see "Revisions" on page 2).

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, state and local government spending, nonresidential fixed investment, residential fixed investment, and private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP in the second quarter reflected an upturn in exports, an acceleration in PCE, a deceleration in imports, an upturn in state and local government spending, and an acceleration in nonresidential fixed investment that were partly offset by decelerations in private inventory investment, in federal government spending, and in residential fixed investment.

Real gross domestic income (GDI) -- the value of the costs incurred and the incomes earned in the production of goods and services in the nation's economy -- increased 0.6 percent in the second quarter, compared with an increase of 0.4 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 2.1 percent in the second quarter, compared with an increase of 0.5 percent in the first quarter.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.5 percent in the second quarter, in contrast to a decrease of 1.6 percent in the first quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.2 percent, compared with an increase of 0.2 percent.

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 3.4 percent in the second quarter, compared with an increase of 2.5 percent in the first.

Current-dollar GDP -- the market value of the goods and services produced by the nation's economy less the value of the goods and services used up in production -- increased 5.9 percent, or $252.7 billion, in the second quarter to a level of $17,902.0 billion. In the first quarter, current-dollar GDP increased 0.8 percent, or $33.3 billion.

Revisions

The upward revision to the percent change in real GDP primarily reflected upward revisions to nonresidential fixed investment, to private inventory investment, to state and local government spending, and to PCE and a downward revision to imports. For information on revisions, see "The Revisions to GDP, GDI, and Their Major Components."

Advance Estimate Second Estimate (Percent change from preceding quarter)

For the first quarter of 2015, real GDI was revised up 0.1 percentage point, from 0.3 percent to 0.4 percent.

Corporate Profits

Profits from current production

Profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) increased $47.5 billion in the second quarter, in contrast to a decrease of $123.0 billion in the first.

Profits of domestic financial corporations increased $33.9 billion in the second quarter, in contrast to a decrease of $23.4 billion in the first. Profits of domestic nonfinancial corporations increased $16.5 billion, in contrast to a decrease of $70.5 billion. The rest-of-the-world component of profits decreased $2.9 billion, compared with a decrease of $29.0 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 $6.0 billion, and payments increased $8.9 billion.

Taxes on corporate income increased $28.3 billion in the second quarter, compared with an increase of $5.5 billion in the first. Profits after tax with IVA and CCAdj increased $19.2 billion, in contrast to a decrease of $128.4 billion.

Dividends increased $1.0 billion in the second quarter, compared with an increase of $6.3 billion in the first. Undistributed profits increased $18.2 billion, in contrast to a decrease of $134.7 billion. Net cash flow with IVA -- the internal funds available to corporations for investment -- increased $28.0 billion, in contrast to a decrease of $135.5 billion.

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. The IVA decreased $78.1 billion in the second quarter, in contrast to an increase of $45.7 billion. The CCAdj increased $8.0 billion, in contrast to a decrease of $208.1 billion.

Gross value added of nonfinancial domestic corporate business

Real gross value added of nonfinancial corporations decreased in the second quarter. Profits per unit of real value added increased, reflecting an increase in unit prices that was partly offset by an increase in unit labor costs; unit nonlabor costs were unchanged.