Business situation: advance estimates for the fourth quarter of 2002.

Larkins, Daniel

THE U.S. economy grew slowly in the fourth quarter of 2002, according to the "advance" estimates of the national income and product accounts (NIPA's). Production, purchases, and income increased less than in the third quarter. Prices increased somewhat more.

* Real gross domestic product (GDP) increased 0.7 percent after increasing 4.0 percent (table 1 and chart 1). (1)

* Gross domestic purchases slowed to a 1.4-percent increase after increasing 3.9 percent.

* Real disposable personal income increased 2.6 percent after increasing 3.1 percent.

* The price index for gross domestic purchases rose 1.8 percent after rising 1.2 percent.

The deceleration in real GDP reflected a slowdown in consumer spending and downturns in inventory investment and exports.

* Consumer spending increased only 1.0 percent, its smallest increase since early 1993. (2) It contributed only 0.67 percentage point to the growth of real GDP in the fourth quarter after contributing 2.93 percentage points in the third (table 2). Purchases of autos and trucks decreased sharply after surging in the third quarter in response to aggressive sales-incentive programs that included zero-rate financing and generous rebates.

* Inventory accumulation slowed, subtracting 0.56 percentage point from fourth-quarter GDP growth. In the third quarter, a step-up in accumulation had added 0.58 percentage point.

* Exports decreased after increasing. Imports (which are subtracted in the calculation of GDP) increased about as much in the fourth quarter as in the third. (3)

The dampening effects of consumer spending, inventory investment, and exports on GDP growth were partly offset by step-ups in Federal Government spending and residential investment and by an upturn in nonresidential fixed investment.

* Federal Government spending increased more than twice as much as in the third quarter; it added 0.65 percentage point to fourth-quarter growth after adding 0.29 percentage point to third-quarter growth. Defense spending accelerated, and nondefense spending turned up.

* Residential investment increased substantially more than in the third quarter. The increase was the fourth in a row.

* Nonresidential fixed investment registered a small increase after eight consecutive quarterly declines--declines that became progressively smaller in the first three quarters of 2002. In the fourth quarter, structures decreased much less than in the third. The advance estimates for the fourth quarter also show the following:

* The deceleration in GDP growth can be attributed to a downturn in the production of goods (table 3). In contrast, the construction of structures turned up, and the production of services increased about as much as in the third quarter.

* Real motor vehicle output decreased 13.3 percent after jumping 37.1 percent. GDP less motor vehicle output increased 1.3 percent after increasing 3.0 percent.

* Real final sales of computers increased 26.6 percent after surging 78.5 percent. Computer prices decreased a little less than in the third quarter.

* Final sales of domestic product--GDP less inventory investment--increased 1.3 percent after increasing 3.4 percent.

* The personal saving rate increased to 4.3 percent from 3.8 percent. (4)

Prices

Inflation stepped up somewhat in the fourth quarter. The price index for gross domestic purchases, which measures the prices of goods and services purchased by U.S. residents, increased 1.8 percent after increasing 1.2 percent (table 4). The acceleration partly reflected step-ups in food and energy prices; excluding these items, the price index increased 1.4 percent after increasing 1.2 percent (chart 2).

Prices of goods and services purchased by consumers increased 1.9 percent after increasing 1.7 percent. The small step-up was more than accounted for by accelerations in food and energy prices; prices of other consumer purchases increased less than in the third quarter (1.5 percent versus 1.8 percent). The acceleration in energy prices mainly reflected a step-up in the price of gasoline and oil, but prices of other energy products ("electricity and gas" and "fuel oil and coal") also contributed.

Prices paid by government increased 1.7 percent, a little more than in the third quarter. A step-up in prices paid by State and local governments was partly offset by a slowdown in prices paid by the Federal Government.

Prices of private nonresidential fixed investment increased after five consecutive quarterly decreases. An increase in the price of structures more than offset a small decrease in the price of equipment and software. Prices of information processing equipment and software decreased at about the average rate of the past 3 years. However, prices of transportation equipment swung up sharply, mainly because of an upturn in motor vehicle prices. The increase in prices of transportation equipment was the largest since 1986; the third-quarter drop had been the largest since 1972. Prices of residential investment increased after no change.

The GDP price index, which measures the prices paid for goods and services produced in the United States, increased 1.8 percent in the fourth quarter, the same as the price index for gross domestic purchases.

Personal Income

The growth of personal income stepped up in the fourth quarter, but the growth of disposable personal income slowed. In the third quarter, tax payments had fallen, boosting disposable income; in the fourth quarter, tax payments changed little.

Personal income, which is measured only in current dollars, increased $88.3 billion (or 4.0 percent) after increasing $79.3 billion (3.6 percent) (table 5). The larger fourth-quarter increase reflected step-ups in nonfarm proprietors' income and in wage and salary disbursements of service and distributive industries. In addition, transfer payments increased a little more than in the third quarter; the fourth-quarter increase included $2.0 billion in retroactive social security payments. (5)

These accelerations were partly offset by changes in farm proprietors' income, which increased less in the fourth quarter than in the third, and in personal interest income, which decreased more in the fourth quarter than in the third. The deceleration in farm proprietors' income reflected, at least in part, a downturn in crop prices. The weakness in interest income reflected a slowdown in the accumulation of interest-bearing assets.

Personal tax and nontax payments decreased slightly in the fourth quarter after a bigger drop in the third quarter. The smaller fourth-quarter decrease was more than accounted for by Federal taxes and primarily reflected the pattern of nonwithheld tax collections.

Current-dollar disposable personal income (DPI) slowed to a 4.6-percent increase in the fourth quarter after increasing 4.9 percent in the third. Real DPI slowed to a 2.6-percent increase after increasing 3.1 percent (chart 3).

The Year 2002

In 2002, production and purchases increased considerably more than in 2001, but they increased less than was typical during the expansion of the 1990s. Real DPI also increased more than in 2001--and more than during the 1990s. Inflation slowed.

Real GDP increased 2.4 percent in 2002 after increasing 0.3 percent in 2001 (table 1). (6) Real gross domestic purchases accelerated more, increasing 2.9 percent after increasing 0.4 percent. The 2002 increases were about a percentage point lower than the average growth rates of these measures during the expansion of the 1990s. (7)

Inventory investment was the largest contributor to the step-up in GDP; it added 0.60 percentage point to GDP growth in 2002 after subtracting 1.24 percentage points in 2001 (table 2). The negative contribution in 2001 had reflected a swing from inventory accumulation to inventory liquidation; the positive contribution in 2002 reflected a virtual cessation of the liquidation.

Consumer spending increased 3.1 percent in 2002 year after increasing 2.5 percent in 2001. Spending on durable goods, nondurable goods, and services all increased more than in 2001. Consumer spending contributed 2.12 percentage points to growth in 2002, 0.45 percentage point more than in 2001.

Government spending also increased more than in 2001. Federal Government spending on national defense more than accounted for the step-up.

Nonresidential fixed investment was weak again in 2002, falling 5.8 percent and subtracting 0.68 percentage point from GDP growth. It had fallen a comparable amount in 2001. In 2002, investment in structures was mainly responsible for the decrease; in 2001, investment in equipment and software had mainly been responsible.

Exports decreased less than in 2001, and imports turned up. The net effect was to subtract more from GDP growth in 2002 than in 2001.

The price index for gross domestic purchases increased 1.2 percent after increasing 1.9 percent (table 4). The slowdown partly reflected a downturn in energy prices and a deceleration in food prices. In addition, prices of investment in nonresidential structures turned down, and prices of residential investment and prices paid by State and local governments decelerated.

Real DPI increased 4.5 percent in 2002, more than twice as much as in 2001 and more than its 3.1-percent average rate of growth in the 1990s. The acceleration reflected a step-up in current-dollar DPI and a deceleration in the prices of goods and services purchased by consumers (tables 4 and 5). The step-up in current-dollar DPI, in turn, mirrored a downturn in personal tax and nontax payments that partly resulted from the Economic Growth and Tax Relief Reconciliation Act of 2001. The personal saving rate increased to 3.9 percent from 2.3 percent.

[GRAPHICS OMITTED]

Table 1. Change in Real Gross Domestic Product, Real Gross
Domestic Purchases, and Real Final Sales to Domestic Purchasers

[Change from preceding period; quarterly estimates seasonally
adjusted at annual rates]

 Billions of chained (1996) dollars

 2002

 2001 2002 I II

Gross domestic product 23.1 221.6 114.4 29.2

Less: Exports of goods
 and services -61.1 -14.4 8.8 34.9
Plus: Imports of goods
 and services -44.0 51.9 29.9 75.8

Equals: Gross domestic
 purchases 39.5 279.9 132.9 62.6

Less: Change in private
 inventories -126.4 60.9 69.5 33.8

Equals: Final sales to
 domestic purchasers 154.2 225.1 72.1 31.6

 Personal consumption
 expenditures 153.3 195.8 49.8 28.6
 Durable goods 53.0 68.6 -16.1 4.8
 Nondurable goods 36.0 58.2 36.4 -0.5
 Services 70.4 78.7 25.6 24.0

 Private fixed investment -64.5 -51.3 -2.0 -3.8
 Nonresidential -69.1 -72.3 -18.0 -7.3
 Structures -4.6 -44.4 -9.5 -11.5
 Equipment and software -67.8 -17.8 -6.6 7.7
 Residential 1.1 14.1 12.6 2.5

 Government consumption
 expenditures and
 gross investment 57.9 72.4 22.8 6.0
 Federal 26.2 42.3 10.6 10.9
 National defense 17.3 34.0 10.5 7.3
 Nondefense 8.8 8.6 0.2 3.6
 State and local 32.0 30.6 12.2 -4.6

Addendum: Final sales
 of domestic product 137.3 167.2 54.5 -1.5

 Billions of
 chained Percent
 (1996) dollars

 2002

 III IV 2001 2002

Gross domestic product 93.2 17.6 0.3 2.4

Less: Exports of goods
 and services 12.2 -4.7 -5.4 -1.3
Plus: Imports of goods
 and services 12.8 14.2 -2.9 3.5

Equals: Gross domestic
 purchases 93.9 33.9 0.4 2.9

Less: Change in private
 inventories 13.9 -15.5 ... ...

Equals: Final sales to
 domestic purchasers 80.1 47.3 1.6 2.3

 Personal consumption
 expenditures 67.5 15.8 2.5 3.1
 Durable goods 51.7 -19.5 6.0 7.4
 Nondurable goods 4.9 18.4 2.0 3.1
 Services 20.8 12.1 2.0 2.2

 Private fixed investment -1.0 12.0 -3.8 -3.2
 Nonresidential -2.4 4.5 -5.2 -5.8
 Structures -13.5 -5.3 -1.7 -16.4
 Equipment and software 15.8 12.1 -6.4 -1.8
 Residential 1.0 6.5 0.3 3.8

 Government consumption
 expenditures and
 gross investment 12.3 19.5 3.7 4.4
 Federal 6.4 15.1 4.8 7.4
 National defense 6.7 10.8 5.0 9.3
 Nondefense -0.2 4.3 4.5 4.2
 State and local 5.9 4.7 3.1 2.9

Addendum: Final sales
 of domestic product 79.3 31.0 1.5 1.8

 Percent

 2002

 I II III IV

Gross domestic product 5.0 1.3 4.0 0.7

Less: Exports of goods
 and services 3.5 14.3 4.6 -1.7
Plus: Imports of goods
 and services 8.5 22.2 3.3 3.7

Equals: Gross domestic
 purchases 5.6 2.6 3.9 1.4

Less: Change in private
 inventories ... ... ... ...

Equals: Final sales to
 domestic purchasers 3.0 1.3 3.3 1.9

 Personal consumption
 expenditures 3.1 1.8 4.2 1.0
 Durable goods -6.3 2.0 22.8 -7.3
 Nondurable goods 7.9 -0.1 1.0 3.9
 Services 2.9 2.7 2.3 1.3

 Private fixed investment -0.5 -1.0 -0.3 3.1
 Nonresidential -5.8 -2.4 -0.8 1.5
 Structures -14.2 -17.6 -21.4 -9.3
 Equipment and software -2.7 3.3 6.7 5.0
 Residential 14.2 2.7 1.1 6.8

 Government consumption
 expenditures and
 gross investment 5.6 1.4 2.9 4.6
 Federal 7.4 7.5 4.3 10.1
 National defense 11.6 7.8 6.9 11.2
 Nondefense 0.4 6.9 -0.3 8.3
 State and local 4.6 -1.7 2.2 1.7

Addendum: Final sales
 of domestic product 2.4 -0.1 3.4 1.3

NOTE. Chained (1996) dollar series are calculated as the product
of the chain-type quantity index and the 1996 current-dollar value
of the corresponding series, divided by 100. Because the formula
for the chain-type quantity indexes uses weights of more than one
period, the corresponding chained-dollar estimates usually are
not additive. Chained (1996) dollar levels and residuals, which
measure the extent of nonadditivity in each table are shown in
NIPA tables 1.2, 1.4, and 1,6. Percent changes are calculated
from unrounded data. Percent changes in major aggregates are shown
in NIPA table S.1 (See "Selected NIPA Tables; which begins on page
D-2 in this issue.)

Table 2. Contributions to Percent Change in Real Gross Domestic
Product

[Quarterly estimates seasonally adjusted at annual rates]

 2002

 2001 2002 I II III IV

Percent change at
 annual rate:
 Gross domestic
 product 0.3 2.4 5.0 1.3 4.0 0.7

Percentage points at
 annual rates:
 Personal consumption
 expenditures 1.67 2.12 2.22 1.22 2.93 0.67
 Durable goods 0.48 0.60 -0.55 0.16 1.74 -0.64
 Nondurable goods 0.39 0.62 1.57 -0.02 0.22 0.77
 Services 0.80 0.89 1.20 1.08 0.97 0.55

 Gross private
 domestic
 investment -1.90 0.08 2.53 1.16 0.55 -0.10
 Fixed investment -0.65 -0.51 -0.07 -0.15 -0.03 0.46
 Nonresidential -0.66 -0.68 -0.66 -0.27 -0.08 0.16
 Structures -0.05 -0.52 -0.44 -0.53 -0.62 -0.24
 Equipment and
 software -0.61 -0.16 -0.22 0.26 0.53 0.40
 Residential 0.01 0.17 0.60 0.12 0.05 0.30
 Change in private
 inventories -1.24 0.60 2.60 1.31 0.58 -0.56

 Net exports of goods
 and services -0.18 -0.61 -0.75 -1.40 -0.01 -0.68
 Exports -0.59 -0.14 0.33 1.29 0.45 -0.17
 Goods -0.47 -0.24 -0.23 0.99 0.28 -0.47
 Services -0.13 0.10 0.56 0.30 0.17 0.30
 Imports 0.42 -0.47 -1.08 -2.69 -0.47 -0.51
 Goods 0.40 -0.40 -0.40 -2.74 -0.40 -0.31
 Services 0.01 -0.07 -0.68 0.05 -0.07 -0.20

 Government consump-
 tion expenditures
 and gross
 investment 0.65 0.81 1.04 0.27 0.56 0.86
 Federal 0.29 0.47 0.47 0.47 0.29 0.65
 National defense 0.19 0.37 0.46 0.32 0.29 0.46
 Nondefense 0.10 0.10 0.01 0.16 -0.01 0.19
 State and local 0.36 0.35 0.56 -0.21 0.27 0.21

NOTE. More detailed contributions to percent change in real gross
domestic product are shown in NIPA table 8.2. Contributions to percent
change in major components of real gross domestic product are shown
in tables 8.3 through 8.6.

Table 3. Change in Real Gross Domestic Product by Type of Product

[Change from preceding period; quarterly estimates seasonally
adjusted at annual rates]

 Billions of chained (1996) dollars

 2002

 2001 2002 I II III IV

Gross domestic product 23.1 221.6 114.4 29.2 93.2 17.6

 Goods -84.4 117.9 72.6 3.6 80.4 -23.9
 Services 97.5 132.3 34.1 42.3 30.9 33.1
 Structures -0.8 -22.4 11.6 -17.2 -10.9 3.6

Addenda:
 Motor vehicle output -20.6 40.6 7.9 6.7 28.5 -13.1
 Gross domestic
 product less motor
 vehicle output 41.8 184.7 106.9 23.3 67.9 29.0

 Final sales of
 computers ... ... ... ... ... ...
 Gross domestic
 product less
 final sales of
 computers ... ... ... ... ... ...

 Percent

 2002

 2001 2002 I II III IV

Gross domestic product 0.3 2.4 5.0 1.3 4.0 0.7

 Goods -2.3 3.3 8.3 0.4 9.0 -2.5
 Services 2.1 2.7 2.8 3.5 2.5 2.7
 Structures -0.1 -2.8 6.1 -8.4 -5.5 1.9

Addenda
 Motor vehicle output -6.1 12.8 9.9 8.1 37.1 -13.3
 Gross domestic
 product less motor
 vehicle output 0.5 21.0 4.9 1.0 3.0 1.3

 Final sales of
 computers 9.1 13.0 -7.8 13.1 78.5 26.6
 Gross domestic
 product less
 final sales of
 computers 0.2 2.3 5.1 1.2 3.6 0.6

NOTE. See note to table 1 for an explanation of chained (1996)
dollar series. Chained (1996) dollar levels and residuals for
most items are shown in NIPA table 1.4. Detail on motor vehicle
output is shown in NIPA table 8.9B.

Table 4. Price Indexes

[Percent change at annual rates; quarterly estimates based on
seasonally adjusted index numbers (1996=100)]

 2002

 2001 2002 I II III IV

Gross domestic product 2.4 1.1 1.3 1.2 1.0 1.8

Less: Exports of goods and
 services -0.8 -0.2 -0.8 3.0 3.5 0.8
Plus: Imports of goods and
 services -2.9 0.3 -1.6 11.1 4.4 1.4

Equals: Gross domestic
 purchases 1.9 1.2 1.2 2.3 1.2 1.8

Less: Change in private
 inventories ... ... ... ... ... ...

Equals: Final sales to
 domestic purchasers 1.9 1.2 1.1 2.3 1.3 1.8

 Personal consumption
 expenditures 2.0 1.4 1.1 2.7 1.7 1.9
 Durable goods -1.9 -2.8 -4.2 -2.9 -1.9 -2.2
 Nondurable goods 1.5 0.4 0.2 4.6 0.6 1.6
 Services 3.1 2.7 2.7 3.0 3.0 3.0

 Private fixed investment 1.2 -0.4 -1.5 -0.2 -0.9 1.4
 Nonresidential 0.2 -1.4 -2.0 -1.4 -1.3 0.4
 Structures 5.0 -0.7 -3.6 0.7 0.4 2.1
 Equipment and software -1.5 -1.6 -1.5 -2.1 -1.9 -0.2
 Residential 4.1 2.0 0.0 3 0.0 4.0

 Government consumption
 expenditures
 and gross investment 2.4 1.7 3.6 2.8 1.4 1.7
 Federal 1.7 2.8 8.4 2.3 1.3 0.6
 National defense 1.6 2.4 7.3 2.0 1.5 1.2
 Nondefense 1.9 3.5 10.4 2.9 1.0 -0.4
 State and local 2.7 1.1 1.1 3.1 1.5 2.2

Addenda:
 Gross domestic purchases:
 Food 3.0 1.9 2.4 0.4 0.7 1.7
 Energy 2.3 -6.3 -8.7 29.9 3.8 12.0
 Less food and energy 1.8 1.4 1.4 1.5 1.2 1.4
 Personal consumption
 expenditures:
 Food 3.0 2.0 2.4 0.5 0.9 1.7
 Energy goods and
 services (1) 2.8 -6.1 -9.1 29.6 3.3 10.5
 Less food and energy 1.8 1.5 1.4 1.9 1.8 1.5

1. Consists of gasoline, fuel oil, and other energy goods and of
electricity and gas.

NOTE. Percent changes in major aggregates are shown in NIPA table
8.1. Index numbers are shown in tables 7.1, 7.2, and 7.4.


Table 5. Personal Income and Its Disposition

[Billions of dollars; quarterly estimates seasonally adjusted
at annual rates]

 Change from
 Level preceding
 period

 2002

 2002 IV 2001 2002

 Wage and salary
 disbursements 5,023.9 5,096.7 114.3 73.3
 Private industries 4,171.0 4,231.0 72.4 31.2
 Goods-producing
 industries 1,123.1 1,128.1 -21.3 -19.3
 Manufacturing 764.5 766.1 -40.0 -24.9
 Distributive industries 1,118.9 1,129.9 14.4 9.7
 Service industries 1,929.0 1,973.1 79.3 40.8
 Government 852.9 865.7 41.9 42.1

 Other labor income 610.8 630.9 26.2 40.4

 Proprietors' income with
 IVA and CCAdj 756.9 772.9 13.1 29.0
 Farm 12.7 10.9 -3.6 -6.3
 Nonfarm 744.2 761.9 16.6 35.4

 Rental income of persons
 with CCAdj 143.9 136.7 -8.7 6.0
 Personal dividend income 433.8 443.8 33.5 24.6
 Personal interest income 1,077.3 1,076.1 14.3 -14.0

 Transfer payments to persons 1,287.1 1,315.4 100.1 116.7

 Less: Personal contributions
 for social insurance 385.5 391.0 13.9 13.2

Personal Income 8,948.1 9,081.6 278.7 262.8

Less: Personal tax and nontax
 payments 1,118.1 1,106.6 5.7 -174.0

Equals: Disposable personal
 income 7,830.0 7,975.0 273.0 436.8

Less: Personal outlays 7,521.7 7,629.6 304.9 298.2

Equals: Personal saving 308.2 345.3 -31.8 138.5

Addenda: Special factors in
 personal income:

 In government wages and
 salaries:
 Federal pay raise ... 9.0 ... ...
 Effects of the September 11
 terrorist attacks ... 2.3 ... ...

 In transfer payments to
 persons:
 Social security retroactive
 payments ... 2.0 ... ...
 Cost-of-living adjustments
 in Federal transfer
 programs ... 13.3 ... ...
 Correction for error in
 indexing for social
 security and supplemental
 security income benefits ... 0.0 ... ...

 In personal tax and nontax
 payments:
 Federal tax law changes ... -42.9 ... ...
 Refunds and State tax law
 changes ... 0.0 ... ...

 Change from preceding period

 2002

 I II III IV

 Wage and salary
 disbursements 26.4 39.5 46.3 53.1
 Private industries 11.2 31.5 37.6 44.5
 Goods-producing
 industries -6.4 4.4 4.7 2.1
 Manufacturing -10.5 5.9 1.7 -0.9
 Distributive industries 11.5 5.2 5.0 9.6
 Service industries 6.1 22.0 27.8 32.9
 Government 15.2 8.0 8.7 8.6

 Other labor income 14.5 13.3 13.4 13.4

 Proprietors' income with
 IVA and CCAdj 17.1 -0.9 11.2 14.2
 Farm 2.5 -14.2 3.2 0.2
 Nonfarm 14.6 13.3 8.0 13.9

 Rental income of persons
 with CCAdj 2.0 12.2 -9.4 -7.4
 Personal dividend income 6.4 6.6 7.0 6.5
 Personal interest income -3.0 12.4 -1.6 -4.6

 Transfer payments to persons 47.0 30.6 15.8 17.0

 Less: Personal contributions
 for social insurance 7.8 3.1 3.4 4.0

Personal Income 102.5 110.6 79.3 88.3

Less: Personal tax and nontax
 payments -172.9 -15.0 -14.5 -0.7

Equals: Disposable personal
 income 275.5 125.5 93.8 89.0

Less: Personal outlays 66.7 81.6 105.1 46.6

Equals: Personal saving 208.9 43.9 -11.3 42.3

Addenda: Special factors in
 personal income:

 In government wages and
 salaries:
 Federal pay raise 8.4 0.6 0.0 0.0
 Effects of the September 11
 terrorist attacks -0.5 0.3 -0.2 -1.0

 In transfer payments to
 persons:
 Social security retroactive
 payments -1.8 0.0 0.0 2.0
 Cost-of-living adjustments
 in Federal transfer
 programs 12.8 0.0 0.0 -0.2
 Correction for error in
 indexing for social
 security and supplemental
 security income benefits -0.5 0.1 -0.1 0.0

 In personal tax and nontax
 payments:
 Federal tax law changes -42.6 -0.3 0.0 0.0
 Refunds and State tax law
 changes -0.2 0.2 1.0 0.1

NOTE. Most dollar levels are in NIPA table 2.1.

IVA Inventory valuation adjustment.

CCAdj Capital consumption adjustment.

RELATED ARTICLE: Fourth-quarter 2002 advance NIPA estimates: source data and assumptions.

The "advance" estimate for the fourth quarter is based on the following major source data; as more and better data become available, the estimates will be revised. (The number of months for which data were available is shown in parentheses.)

Personal consumption expenditures: Sales of retail stores (3), unit auto and truck sales (3), and consumers' shares of auto and truck sales (2);

Nonresidential fixed investment: Unit auto and truck sales (3), construction put in place (2), manufacturers' shipments of machinery and equipment other than aircraft (3), shipments of civilian aircraft (2), and exports and imports of machinery and equipment (2);

Residential investment: Construction put in place (2), single-family housing starts (3), sales of new houses (3), and sales of existing houses (3);

Change in private inventories: Trade and nondurable manufacturing inventories (2), durable manufacturing inventories other than semiconductors (3), and unit auto and truck inventories (3);

Net exports of goods and services: Exports and imports of goods and services (2);

Government consumption expenditures and gross investment: Some Federal outlays were available for 2 months, others for 3, State and local construction put in place (2), and State and local employment (3);

GDP prices: Consumer price indexes (3), producer price indexes (3), U.S. import and export price indexes (3), and values and quantities of petroleum imports (2).

BEA made assumptions for source data that were not available. Table A shows the assumptions for key series; a more comprehensive list is available on BEA's Web site at <www.bea.gov>.

Table A. Summary of Major Data Assumptions for Advance
Estimates, 2002:IV

[Billions of dollars, seasonally adjusted at annual rates]

 2002

 July August September

Private fixed investment:
 Nonresidential structures:
 Buildings:
 Value of new nonresidential
 construction put in place 163.7 159.8 156.5

Equipment and software:
 Manufacturers' shipments of
 complete aircraft 38.6 28.6 31.9

Residential structures:
 Value of new residential
 construction put in place:
 1-unit structures 261.8 259.3 263.8
 2-unit-or-more 33.4 33.4 33.0

Change in private inventories:
 Change in inventories for
 nondurable manufacturing 10.2 10.9 16.4
 Change in inventories for merchant
 wholesale and retail industries
 other than motor vehicles and
 equipment 31.0 12.4 26.3

Net exports: (2)
 Exports of goods:
 U.S. exports of goods,
 international-transactions-
 accounts basis 709.3 699.3 699.2
 Excluding gold 705.3 696.0 695.7
 Imports of goods:
 U.S. imports of goods,
 international-transactions-
 accounts basis 1,177.7 1,207.4 1,194.8
 Excluding gold 1,174.6 1,204.3 1,191.9
 Net exports of goods -468.4 -508.0 -495.6
 Excluding gold -469.3 -508.3 -496.3

Government:
 State and local:
 Structures:
 Value of new construction
 put in place 185.8 186.4 190.5

 2002

 December
 October November (1)

Private fixed investment:
 Nonresidential structures:
 Buildings:
 Value of new nonresidential
 construction put in place 158.9 158.7 158.9

Equipment and software:
 Manufacturers' shipments of
 complete aircraft 32.2 31.1 23.1

Residential structures:
 Value of new residential
 construction put in place:
 1-unit structures 267.1 271.3 274.2
 2-unit-or-more 32.0 32.1 32.5

Change in private inventories:
 Change in inventories for
 nondurable manufacturing 2.0 -7.3 -2.2
 Change in inventories for merchant
 wholesale and retail industries
 other than motor vehicles and
 equipment -34.4 14.7 -5.1

Net exports: (2)
 Exports of goods:
 U.S. exports of goods,
 international-transactions-
 accounts basis 688.4 695.6 691.8
 Excluding gold 684.9 691.3 688.2
 Imports of goods:
 U.S. imports of goods,
 international-transactions-
 accounts basis 1,163.1 1,227.5 1,224.0
 Excluding gold 1,159.4 1,224.6 1,220.4
 Net exports of goods -474.7 -531.9 -532.2
 Excluding gold -474.5 -533.3 -532.2

Government:
 State and local:
 Structures:
 Value of new construction
 put in place 187.9 191.9 189.9

1. Assumption.

2. Nonmonetary gold is included in balance-of-payments-basis
exports and imports but is not used directly in the estimation
of NIPA exports and imports.

(1.) Quarterly estimates in the NIPA's are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and annualized. "Real" estimates are in chained (1996) dollars, and price indexes are chain-type measures.

(2.) In this article, "consumer spending" is shorthand for the NIPA series "personal consumption expenditures" "government spending" is shorthand for "government consumption expenditures and gross investment" and "inventory investment" is shorthand for "change in private inventories."

(3.) Imports of goods and services are included in gross domestic purchases but not in GDP. Exports of goods and services are included in GDP but not in gross domestic purchases.

(4.) The personal saving rate is measured as personal saving as a percentage of current-dollar disposable personal income. The fourth-quarter estimate of the national saving rate (which is measured as gross saving as a percentage of gross national product) will be available at the end of March along with the "final" estimates of fourth-quarter GDP.

(5.) These payments result when the Social Security Administration recalculates benefits of recent retirees on the basis of updated information on the earnings base.

(6.) The 2002 increase is calculated from annual levels for 2001 and 2002. From the fourth quarter of 2001 to the fourth quarter of 2002, real GDP increased 2.8 percent, real DPI increased 5.9 percent, and the price index for gross domestic purchases increased 1.6 percent.

(7.) From the trough of the recession in the first quarter of 1991 to the peak in the fourth quarter of 2000, real GDP increased at an average annual rate of 3.5 percent, and real gross domestic purchases increased 3.9 percent.