Gross Domestic Product, 2nd quarter 2016 (third estimate); Corporate Profits, 2nd quarter 2016 (revised 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 increased at an annual rate of 1.4 percent in the second quarter of 2016 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.8 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 1.1 percent. With the third estimate for the second quarter, the general picture of economic growth remains the same. The most notable change from the second to third estimate is that nonresidential fixed investment increased in the second quarter; in the previous estimate, nonresidential fixed investment decreased (see "Updates to GDP" on page 2).

Real gross domestic income (GDI) decreased 0.2 percent in the second quarter, in contrast to an increase of 0.8 percent 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 0.6 percent in the second quarter, compared with an increase of 0.8 percent in the first (table 1).

The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment. These were partly offset by negative contributions from private inventory investment, 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 an acceleration in PCE and upturns in nonresidential fixed investment and in exports. These were partly offset by a larger decrease in private inventory investment, downturns in state and local government spending and in residential fixed investment, and an upturn in imports.

Current-dollar GDP increased 3.7 percent, or $168.5 billion, in the second quarter to a level of $18,450.1 billion (table 1 and table 3). In the first quarter, current dollar GDP increased 1.3 percent, or $58.8 billion.

The price index for gross domestic purchases increased 2.1 percent in the second quarter, compared with an increase of 0.2 percent in the first (table 4). The PCE price index increased 2.0 percent, compared with an increase of 0.3 percent. Excluding food and energy prices, the PCE price index increased 1.8 percent, compared with an increase of 2.1 percent (appendix table A).

Updates to GDP

The upward revision to the percent change in real GDP primarily reflected upward revisions to nonresidential fixed investment, private inventory investment, and exports. 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

Corporate Profits (table 12)

Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) decreased $12.5 billion in the second quarter, in contrast to an increase of $66.0 billion in the first.

Profits of domestic financial corporations increased $5.6 billion in the second quarter, compared with an increase of $8.1 billion in the first. Profits of domestic nonfinancial corporations decreased $56.1 billion, in contrast to an increase of $84.8 billion. The rest-of-the-world component of profits increased $38.0 billion, in contrast to a decrease of $26.9 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 $37.5 billion, and payments decreased $0.5 billion.