BUSINESS SITUATION.

Larkins, Daniel ; Moran, Larry R. ; Morris, Ralph W. 等

REAL GROSS domestic product (GDP) increased 5.8 percent in the fourth quarter of 1999, according to the "advance" estimates of the national income and product accounts (NIPA's), after increasing 5.7 percent in the third quarter (table 1 and chart 1).(1) The price index for gross domestic purchases increased 2.3 percent after increasing 1.7 percent. Real disposable personal income increased 4.6 percent after increasing 2.9 percent; the personal saving rate (personal saving as a percentage of current-dollar disposable personal income) continued its downtrend, decreasing to 1.9 percent from 2.1 percent.

Table 1--Real Gross Domestic Product, Real Gross Domestic Purchases, and Real Final Sales to Domestic Purchasers [Quarterly estimates seasonally adjusted at annual rates]

 Billions of chained (1996)
 dollars

 Change from preceding period

 1998 1999 1999
 I II

Gross domestic product 351.2 344.7 78.7 40.7
Less: Exports of goods and services 21.7 35.4 -14.4 10.0
Plus: Imports of goods and services 12.7 144.8 37.8 44.5
Equals: Gross domestic purchases 449.3 442.3 125.9 70.8

Less: Change in private inventories 5.2 -32.4 -20.6 -36.1
 Nonfarm 7.0 -31.0 -15.1 -30.0
 Farm -2.1 -1.6 -5.4 -6.5

Equals: Final sales to domestic
purchasers 443.6 470.2 144.2 103.0
 Personal consumption expenditures 264.9 300.1 92.6 73.4
 Durable goods 74.1 83.6 22.8 17.3
 Nondurable goods 65.4 89.3 36.9 14.2
 Services 127.8 132.3 34.5 42.7
 Gross private domestic fixed
 investment 155.8 117.6 33.4 25.1
 Nonresidential fixed investment 126.8 92.9 21.9 20.2
 Structures 10.1 -6.8 -3.8 -3.4
 Equipment and software 118.7 104.9 27.2 25.2
 Residential investment 29.6 25.2 11.1 5.1
 Government consumption
 expenditures and gross investment 25.2 54.3 18.71 4.9
 Federal -4.8 15.2 -.6 2.8
 National defense -6.6 6.4 -3.5 -2.2
 Nondefense 1.7 8.7 2.8 5.0
 State and local 29.8 39.1 19.3 2.2
Addendum: Final sales of domestic
product 345.6 372.4 96.9 72.7

 Billions of
 chained 1996 Percent
 dollars change from
 Change from preceding
 preceding period
 period
 1999 1998 1999
 III IV

Gross domestic product 122.0 126.3 4.3 4.0
Less: Exports of goods and services 28.4 17.6 2.2 3.5
Plus: Imports of goods and services 47.6 35.6 11.6 11.8
Equals: Gross domestic purchases 138.7 142.5 5.4 5.1

Less: Change in private inventories 24.0 27.4 ... ...
 Nonfarm 28.1 30.2 ... ...
 Farm -4.7 -3.4 ... ...

Equals: Final sales to domestic
purchasers 114.4 116.1 5.4 5.4
 Personal consumption expenditures 71.5 77.9 4.9 5.3
 Durable goods 15.1 23.3 11.3 11.4
 Nondurable goods 15.6 26.6 4.0 5.3
 Services 41.4 30.0 4.0 4.0
 Gross private domestic fixed
 investment 26.3 6.2 11.8 8.0
 Nonresidential fixed investment 31.4 7.6 12.7 8.3
 Structures -2.4 -3.3 4.1 -2.7
 Equipment and software 35.7 12.1 15.8 12.0
 Residential investment -3.7 -1.1 9.2 7.2
 Government consumption
 expenditures and gross investment 17.0 31.2 1.7 3.7
 Federal 5.5 20.4 -.9 2.9
 National defense 9.1 15.4 -1.9 1.9
 Nondefense -3.6 5.1 1.0 4.7
 State and local 11.5 10.9 3.2 4.1
Addendum: Final sales of domestic
product 97.9 100.1 4.3 4.4

 Percent change from preceding
 period

 1999
 I II III IV

Gross domestic product 3.7 1.9 5.7 5.8
Less: Exports of goods and services -5.5 4.0 11.5 6.9
Plus: Imports of goods and services 12.5 14.4 14.9 10.6
Equals: Gross domestic purchases 5.8 3.2 6.3 6.3

Less: Change in private inventories ... ... ... ...
 Nonfarm ... ... ... ...
 Farm ... ... ... ...

Equals: Final sales to domestic
purchasers 6.7 4.7 5.2 5.2
 Personal consumption expenditures 6.5 5.1 4.9 5.3
 Durable goods 12.4 9.1 7.7 11.8
 Nondurable goods 8.9 3.3 3.6 6.1
 Services 4.2 5.2 5.0 3.5
 Gross private domestic fixed
 investment 9.1 6.6 6.8 1.5
 Nonresidential fixed investment 7.8 7.0 10.9 2.5
 Structures -5.8 -5.3 -3.8 -5.3
 Equipment and software 12.5 11.2 15.7 4.9
 Residential investment 12.9 5.5 -3.8 -1.2
 Government consumption
 expenditures and gross investment 5.1 1.3 4.5 8.4
 Federal -.5 2.1 4.1 16.0
 National defense -4.0 -2.6 11.2 18.9
 Nondefense 6.1 10.9 -7.1 11.0
 State and local 8.2 .9 4.8 4.4
Addendum: Final sales of domestic
product 4.6 3.4 4.5 4.6

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 man 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 in NIPA tables 1.2, 1.4, and 1.6. Percent changes are calculated from unrounded data. Percent changes in major aggregates are in NIPA table S.1. (See "Selected NIPA Tables," which begins on page D-2 of this issue.)

[CHART 1 OMITTED]

The largest contributors to the fourth-quarter increase in real GDP were personal consumption expenditures (PCE), government spending, inventory investment, and exports (table 2). (These components, along with private nonresidential fixed investment, also contributed substantially to the third-quarter increase in real GDP.) PCE increased 5.3 percent in the fourth quarter and contributed 3.6 percentage points to the growth in GDP; expenditures for durable goods, for nondurable goods, and for services all increased. Government spending increased 8.4 percent and contributed 1.5 percentage points; spending by the Federal Government and by State and local governments both increased. Inventory investment increased $27.4 billion, as the pace of accumulation increased to $65.4 billion from $38.0 billion, and contributed 1.2 percentage points to GDP growth. Exports increased 6.9 percent and contributed 0.7 percentage point. The increases in these components were partly offset by a 10.6-percent increase in imports, which subtracted 1.4 percentage points from GDP growth.

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

[Quarterly estimates seasonally adjusted at annual rates]

 1998 1999

Percent change at annual rate:
 Gross domestic product 4.3 4.0
Percentage points at annual
 rates:
 Personal consumption
 expenditures 3.24 3.52
 Durable goods .86 .89
 Nondurable goods .79 1.04
 Services 1.59 1.59
 Gross, private domestic
 investment 1.93 .99
 Fixed investment 1.86 1.32
 Nonresidential 1.49 1.02
 Structures .13 -.08
 Equipment and software 1.37 1.10
 Residential .37 .31
 Change in private inventories .07 -.33
 Net exports of goods and
 services -1.18 -1.11
 Exports .25 .38
 Goods .17 .29
 Services .08 .09
 Imports -1.43 -1.49
 Goods -1.21 -1.33
 Services -.22 -.16
 Government consumption
 expenditures and gross
 investment .31 .64
 Federal -.06 .18
 National defense -.08 .08
 Nondefense .02 .10
 State and local .37 .47

 1999
 I II III IV
Percent change at annual rate:
 Gross domestic product 3.7 1.9 5.7 5.8
Percentage points at annual
 rates:
 Personal consumption
 expenditures 4.27 3.36 3.33 3.59
 Durable goods .96 .71 .62 .93
 Nondurable goods 1.68 .64 .73 1.22
 Services 1.63 2.01 1.97 1.43
 Gross, private domestic
 investment .67 -.36 2.25 1.46
 Fixed investment 1.48 1.10 1.16 .28
 Nonresidential .94 .86 1.33 .33
 Structures -.18 -.16 -.11 -.15
 Equipment and software 1.12 1.02 1.44 .48
 Residential .53 .24 -.17 -.05
 Change in private inventories -.80 -1.46 1.09 1.18
 Net exports of goods and
 services -2.13 -1.35 -.72 -.70
 Exports -.61 .42 1.19 .74
 Goods -.74 .32 1.19 .57
 Services .13 .10 0 .17
 Imports -1.52 -1.77 -1.91 -1.44
 Goods -1.28 -1.59 -1.83 -1.13
 Services -.24 -.19 -.08 -.30
 Government consumption
 expenditures and gross
 investment .87 .23 .81 1.45
 Federal -.03 .13 .26 .94
 National defense -.16 -.10 .42 .70
 Nondefense .13 .23 -.16 .24
 State and local .90 .10 .55 .52

NOTE.--More detailed contributions to percent change in real gross domestic product are shown in NIPA table 82 Contributions to percent change in major components of real gross domestic product are shown in tables 83 through 8.6.

Motor vehicles.--Real motor vehicle output increased 6.1 percent in the fourth quarter after increasing 26.2 percent in the third (table 3).(2) The slowdown was more than accounted for by truck output, which decreased after increasing substantially; auto output accelerated.

Table 3.--Motor Vehicle Output, Sales, and Inventories

[Seasonally adjusted at annual rates]

 Billions of chained
 (1996) dollars

 Level Change
 from
 preceding
 quarter

 1999 1999

 IV I

Output 361.1 -19.7
 Autos 137.0 -22.0
 Trucks 223.6 2.0

Less: Exports 26.7 -1.8
 Autos 17.0 -1.6
 Trucks 9.7 -.2

Plus: Imports 117.4 9.2
 Autos 97.7 6.6
 Trucks 19.6 2.6

Equals: Gross domestic purchases 452.2 -8.3
 Autos 218.3 -13.3
 Trucks 233.7 4.9

Less: Change in private inventories 16.2 -10.2
 Autos 5.7 -11.2
 Trucks 9.9 .5

Equals: Final sales to domestic purchasers 435.6 1.9
 Autos 212.6 -2.4
 Trucks 223.0 4.3

Addenda:
 Personal consumption expenditures 256.2 .9
 Private fixed investment 163.6 2.2
 Gross government investment 15.6 -1.1

 Billions of chained
 (1996) dollars

 Change from
 preceding quarter

 1999
 II III IV

Output 6.7 20.1 5.3
 Autos 2.3 2.4 7.2
 Trucks 4.4 17.6 -1.8

Less: Exports 2.3 -1.9 2.4
 Autos 2.1 -2.2 1.8
 Trucks .2 .3 .6

Plus: Imports .6 6.8 -.3
 Autos -2.3 8.1 0
 Trucks 2.9 -1.3 -.3

Equals: Gross domestic purchases 5.0 28.9 2.6
 Autos -2.3 12.9 5.3
 Trucks 7.2 15.9 -2.6

Less: Change in private inventories -4.0 10.8 2.9
 Autos -9.6 11.1 2.5
 Trucks 4.7 .2 .5

Equals: Final sales to domestic purchasers 9.0 17.9 -.4
 Autos 6.9 2.1 2.8
 Trucks 2.1 15.8 -3.2

Addenda:
 Personal consumption expenditures 6.1 1.5 3.4
 Private fixed investment 3.8 14.0 -6.4
 Gross government investment .9 2.3 2.5

 Percent change from
 preceding quarter

 1999

 I II III

Output -20.7 8.4 26.2
 Autos -47.7 7.5 7.6
 Trucks 4.1 9.0 38.3

Less: Exports -25.2 43.3 -25.5
 Autos -33.0 67.0 -41.8
 Trucks -8.8 8.4 14.6

Plus: Imports 41.6 2.2 26.8
 Autos 34.4 -9.7 41.2
 Trucks 85.7 80.7 -21.8

Equals: Gross domestic purchases -7.6 4.9 30.4
 Autos -22.5 -4.5 28.5
 Trucks 9.8 14.3 32.2

Less: Change in private inventories
 Autos
 Trucks

Equals: Final sales to domestic purchasers 1.9 9.1 18.3
 Autos -4.7 14.6 4.0
 Trucks 8.7 4.0 33.5

Addenda:
 Personal consumption expenditures 1.4 10.3 2.4
 Private fixed investment 6.0 10.3 41.0
 Gross government investment -30.9 -26.7 115.7

 Percent change from
 preceding quarter

 1999

 IV

Output 6.1
 Autos 24.2
 Trucks -3.1

Less: Exports 44.7
 Autos 56.4
 Trucks 27.2

Plus: Imports -.9
 Autos .1
 Trucks -5.2

Equals: Gross domestic purchases 2.3
 Autos 10.3
 Trucks -4.4

Less: Change in private inventories
 Autos
 Trucks

Equals: Final sales to domestic purchasers -.4
 Autos 5.5
 Trucks -5.6

Addenda:
 Personal consumption expenditures 5.5
 Private fixed investment -14.2
 Gross government investment 102.7

NOTE.--See note to table 1 for an explanation of chained (1996) dollars Truck output includes new trucks only; auto output includes new cars and used cars Chained (1996) dollar levels for motor vehicle output, auto and truck output, and residuals, which measure the extent of nonadditivity in each table, are in NIPA tables 1.4 and 8.9B.

Final sales of motor vehicles to domestic purchasers decreased 0.4 percent after increasing 18.3 percent, as a step-up in consumer purchases was more than offset by a downturn in purchases by businesses (private fixed investment). Truck sales decreased after a sharp increase; auto sales increased a little more than in the third quarter.

Factors frequently considered in analyses of consumer spending were favorable in the fourth quarter. The growth of real disposable personal income picked up to 4.6 percent from 2.9 percent, and the unemployment rate decreased to 4.1 percent from 4.2 percent. The Index of Consumer Sentiment (a measure of consumer attitudes and expectations prepared by the University of Michigan's Survey Research Center) remained at a high level.

Factors specific to motor vehicle purchases were mixed. Interest rates on new-car loans increased, but manufacturers continued to offer attractive sales-incentive programs.

Imports of motor vehicles decreased slightly after a substantial increase,

and exports increased substantially after decreasing.

Motor vehicle inventory investment increased less than in the third quarter. The inventory-sales ratio for new domestic autos, which is calculated from units data, increased to 2.3 at the end of the fourth quarter from 2.1 at the end of the third; the traditional industry target is 2.4.

Prices

The price index for gross domestic purchases, which measures the prices paid for goods and services purchased by U.S. residents, increased 2.3 percent in the fourth quarter after increasing 1.7 percent in the third (table 4). Prices of gross domestic purchases less food and energy increased 2.0 percent after increasing 1.2 percent (chart 2). The step-ups were accounted for by prices of PCE and of private nonresidential fixed investment.

Table 4.--Price Indexes

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

 1998 1999

Gross domestic product 1.2 1.4
Less: Exports of goods and services -2.3 -.4
Plus: Imports of goods and services -5.3 .3

Equals: Gross domestic purchases .7 1.5
Less: Change in private inventories
Equals: Final sales to domestic
 purchasers .8 1.5
 Personal consumption expenditures .9 1.6
 Food 1.7 2.0
 Energy goods and services(1) -7.5 3.7
 Other personal consumption
 expenditures 1.3 1.4

 Private nonresidential fixed investment -1.8 -1.3
 Structures 3.1 2.7
 Equipment and software -3.4 -2.5
 Private residential investment 2.6 4.0
 Government consumption expenditures
 and gross investment 1.5 2.7
 Federal 1.1 3.0
 National defense .8 2.7
 Nondefense 1.6 3.6
 State and local 1.8 2.5
Addendum: Gross domestic purchases
 less food and energy 1.0 1.4

 1999
 I II

Gross domestic product 2.0 1.3
Less: Exports of goods and services -.5 .7
Plus: Imports of goods and services -3.0 5.2

Equals: Gross domestic purchases 1.6 1.9
Less: Change in private inventories
Equals: Final sales to domestic
 purchasers 1.7 2.0
 Personal consumption expenditures 1.4 2.2
 Food 2.5 1.2
 Energy goods and services(1) -2.5 26.9
 Other personal consumption
 expenditures 1.4 1.3

 Private nonresidential fixed investment -.9 -1.4
 Structures 1.3 2.2
 Equipment and software -1.6 -2.5
 Private residential investment 4.0 3.6
 Government consumption expenditures
 and gross investment 3.8 2.9
 Federal 8.6 .9
 National defense 7.6 1.0
 Nondefense 10.4 .7
 State and local 1.4 4.0
Addendum: Gross domestic purchases
 less food and energy 1.7 1.2

 1999
 III IV

Gross domestic product 1.1 2.0
Less: Exports of goods and services 1.3 2.4
Plus: Imports of goods and services 6.2 4.2

Equals: Gross domestic purchases 1.7 2.3
Less: Change in private inventories
Equals: Final sales to domestic
 purchasers 1.8 2.3
 Personal consumption expenditures 1.8 2.5
 Food 2.1 2.2
 Energy goods and services(1) 14.2 10.6
 Other personal consumption
 expenditures 1.2 2.1

 Private nonresidential fixed investment -1.3 .1
 Structures 3.4 3.9
 Equipment and software -2.7 -1.0
 Private residential investment 4.1 3.5
 Government consumption expenditures
 and gross investment 3.3 3.0
 Federal 1.8 2.2
 National defense 1.8 2.0
 Nondefense 1.8 2.6
 State and local 4.2 3.4
Addendum: Gross domestic purchases
 less food and energy 1.2 2.0

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

NOTE.--Percent changes in major aggregates are in NIPA table 8.1. Index number levels are in tables 7.1, 7.2, and 7.4.

[CHART 2 OMITTED]

PCE prices increased 2.5 percent after increasing 1.8 percent. Prices of PCE other than food and energy increased 2.1 percent after increasing 1.2 percent; prices of clothing and shoes turned up, and prices of brokerage services, of housing, and of household operation other than electricity and gas accelerated. Food prices increased about the same as in the third quarter; step-ups in meat and dairy prices were offset by downturns in prices of poultry and of fruits and vegetables. Prices of energy goods and services increased 10.6 percent after increasing 14.2 percent, reflecting decelerations in the prices of gasoline and oil and of natural gas.

Prices of private nonresidential fixed investment increased 0.1 percent after decreasing 1.3 percent. Prices of equipment and software decreased 1.0 percent after decreasing 2.7 percent; software prices stepped up, and auto prices decreased much less than in the third quarter. Prices of structures increased 3.9 percent after increasing 3.4 percent.

Prices of government consumption expenditures and gross investment increased 3.0 percent after increasing 3.3 percent. A slowdown in prices paid by State and local governments more than offset a step-up in prices paid by the Federal Government. Prices paid by State and local governments increased 3.4 percent after increasing 4.2 percent. Prices paid by the Federal Government increased 2.2 percent after increasing 1.8 percent.

The GDP price index, which measures the prices paid for goods and services produced in the United States, increased 2.0 percent after increasing 1.1 percent. The GDP price index, unlike the price index for gross domestic purchases, includes the prices of exports and excludes the prices of imports. Export prices increased 2.4 percent after increasing 1.3 percent; prices accelerated for automotive vehicles, engines, and parts, for civilian aircraft, engines, and parts, and for durable industrial supplies and materials. Import prices increased 4.2 percent after increasing 6.2 percent; prices slowed substantially for nonpetroleum industrial supplies and materials and for petroleum and products.

Personal income

Current-dollar disposable personal income (DPI) increased 7.2 percent in the fourth quarter after increasing 4.8 percent in the third. The personal saving rate (saving as a percentage of current-dollar BPI) decreased to 1.9 percent from 2.1 percent, as personal outlays increased more than DPI; the decrease in the saving rate was the smallest in several quarters (chart 3).

[CHART 3 OMITTED]

Personal income increased $139.2 billion after increasing $98.8 billion (table 5). The step-up was primarily accounted for by upturns in farm proprietors' income and in rental income of persons; wage and salary disbursements increased less than in the third quarter, and other components of personal income increased about the same amount in both quarters.

Table 5--Personal Income and Its Disposition

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

 Level
 1999
 1999 IV

 Wage and salary disbursements 4,472.7 4,577.2
 Private industries 3,746.3 383.9
 Goods-producing industries 1,082.6 1,102.2
 Manufacturing 779.9 791.4
 Distributive industries 1,005.5 1,024.8
 Service industries 1,658.1 1,711.9
 Government 726.4 738.2
 Other labor income 535.8 543.8
 Proprietors' income with IVA
 and CCAdj 658.0 682.7
 Farm 31.3 37.5
 Nonfarm 626.7 645.2
 Rental income of persons with
 CCAdj 146.1 148.2
 Personal dividend income 364.3 373.1
 Personal interest income 930.6 955.6
 Transfer payments to persons 1,018.2 1,030.2
 Less: Personal contributions
 for social insurance 334.5 340.2
Personal income 77,912.0 7,970.6
Less: Personal tax and nontax
 payments 1,152.0 1,183.2
Equals: Disposable personal
 income 6,639.2 6,787.4
Less: Personal outlays 6,480.9 6,656.6
Equals: Personal saving 1,583.0 130.8
Addenda: Special factors in
 personal income:

 In wages and salaries:
 Manufacturing bonus payments 2.5
 Due to Hurricane Floyd ... 0
 Federal Government and
 Postal Service pay
 adjustments 6.2

 In farm proprietors' income:
 Subsidies 1.7
 Due to Hurricane Floyd 0

 In nonfarm proprietors' income:
 Due to Hurricane Floyd 0

 In rental income of persons
 with CCAdj:
 Subsidies ... 3.7
 Due to Hurricane Floyd -.2

 In transfer payments to persons:
 Social security retroactive
 payments ... 1.2
 Cost-of-living adjustments in
 Federal transfer programs ... 6.6
 Earned Income Tax Credit and
 Child Tax Credit payments 3.4

 In personal contributions for
 social insurance:
 Tax rate, base, and law change ... 3.0
 Supplementary medical
 insurance premiums ... .8

 In personal tax and nontax
 payments:
 Tax law changes ... -5.7
 Minnesota's tax rebate 0

 Change from
 preceding period

 1998 1999

 Wage and salary disbursements 297.1 286.7
 Private industries 268.8 253.1
 Goods-producing industries 63.2 43.9
 Manufacturing 38.7 22.4
 Distributive industries 65.5 60.9
 Service industries 140.1 148.2
 Government 28.4 33.6
 Other labor income 14.8 20.1
 Proprietors' income with IVA
 and CCAdj 27.5 51.9
 Farm -4.4 6.2
 Nonfarm 31.9 45.7
 Rental income of persons with
 CCAdj 7.2 8.7
 Personal dividend income 14.9 1.6
 Personal interest income 42.9 32.8
 Transfer payments to persons 21.2 34.6
 Less: Personal contributions
 for social insurance 17.8 18.6
Personal income 407.8 432.3
Less: Personal tax and nontax
 payments 104.3 79.4
Equals: Disposable personal
 income 303.4 353.0
Less: Personal outlays 344.9 424.3
Equals: Personal saving -41.4 -71.4
Addenda: Special factors in
 personal income:

 In wages and salaries:
 Manufacturing bonus payments ... ...
 Due to Hurricane Floyd ... ...
 Federal Government and
 Postal Service pay
 adjustments ... ...

 In farm proprietors' income:
 Subsidies ... ...
 Due to Hurricane Floyd ... ...

 In nonfarm proprietors' income:
 Due to Hurricane Floyd ... ...

 In rental income of persons
 with CCAdj:
 Subsidies ... ...
 Due to Hurricane Floyd ... ...

 In transfer payments to persons:
 Social security retroactive
 payments ... ...
 Cost-of-living adjustments in
 Federal transfer programs ... ...
 Earned Income Tax Credit and
 Child Tax Credit payments ... ...

 In personal contributions for
 social insurance:
 Tax rate, base, and law change ... ...
 Supplementary medical
 insurance premiums ... ...

 In personal tax and nontax
 payments:
 Tax law changes ... ...
 Minnesota's tax rebate ... ...

 Change from
 preceding period

 1999
 I II

 Wage and salary disbursements 74.2 61.1
 Private industries 61.2 55.6
 Goods-producing industries 6.3 12.2
 Manufacturing 1.4 7.8
 Distributive industries 16.4 11.3
 Service industries 38.6 31.9
 Government 1.3 5.5
 Other labor income 5.9 5.0
 Proprietors' income with IVA
 and CCAdj 2.8 15.4
 Farm -8.6 1.6
 Nonfarm 11.5 13.7
 Rental income of persons with
 CCAdj 1.6 0.2
 Personal dividend income 4.2 5.1
 Personal interest income 1.0 13.1
 Transfer payments to persons 16.8 5.8
 Less: Personal contributions
 for social insurance 6.9 3.4
Personal income 99.4 102.4
Less: Personal tax and nontax
 payments 11.8 14.6
Equals: Disposable personal
 income 87.6 878.0
Less: Personal outlays 12.0 114.9
Equals: Personal saving -32.4 -27.1
Addenda: Special factors in
 personal income:

 In wages and salaries:
 Manufacturing bonus payments 0 0
 Due to Hurricane Floyd 0 0
 Federal Government and

 Postal Service pay
 adjustments 6.2 0

 In farm proprietors' income:
 Subsidies 3.1 4.9
 Due to Hurricane Floyd 0 0

 In nonfarm proprietors' income:
 Due to Hurricane Floyd 0 0

 In rental income of persons
 with CCAdj:
 Subsidies .4 1.4
 Due to Hurricane Floyd 0 0

 In transfer payments to persons:
 Social security retroactive
 payments -1.2 0
 Cost-of-living adjustments in
 Federal transfer programs 6.3 0
 Earned Income Tax Credit and
 Child Tax Credit payments 3.4 0

 In personal contributions for
 social insurance:
 Tax rate, base, and law change 3.0 0
 Supplementary medical
 insurance premiums .8 0

 In personal tax and nontax
 payments:
 Tax law changes -5.7 0
 Minnesota's tax rebate 0 0

 Change from
 preceding period

 1999
 III IV

 Wage and salary disbursements 76.8 67.8
 Private industries 67.8 59.9
 Goods-producing industries 15.1 12.0
 Manufacturing 11.6 5.0
 Distributive industries 15.8 11.4
 Service industries 37.0 36.4
 Government 9.0 7.9
 Other labor income 5.5 5.3
 Proprietors' income with IVA
 and CCAdj -1.3 28.7
 Farm -13.1 16.5
 Nonfarm 11.8 12.2
 Rental income of persons with
 CCAdj -9.8 9.2
 Personal dividend income 5.8 6.1
 Personal interest income 18.3 16.8
 Transfer payments to persons 7.7 8.9
 Less: Personal contributions
 for social insurance 4.4 3.5
Personal income 98.8 139.2
Less: Personal tax and nontax
 payments 21.0 22.8
Equals: Disposable personal
 income 77.8 116.4
Less: Personal outlays 106.3 125.1
Equals: Personal saving -28.5 -8.7
Addenda: Special factors in
 personal income:

 In wages and salaries:
 Manufacturing bonus payments 0 2.5
 Due to Hurricane Floyd .3 -.3
 Federal Government and
 Postal Service pay
 adjustments 0 0

 In farm proprietors' income:
 Subsidies -7.9 16.8
 Due to Hurricane Floyd -.6 .6

 In nonfarm proprietors' income:
 Due to Hurricane Floyd -.4 .4

 In rental income of persons
 with CCAdj:
 Subsidies -1.8 3.7
 Due to Hurricane Floyd -4.7 4.5

 In transfer payments to persons:
 Social security retroactive
 payments 0 1.2
 Cost-of-living adjustments in
 Federal transfer programs 0 .3
 Earned Income Tax Credit and
 Child Tax Credit payments 0 0

 In personal contributions for
 social insurance:
 Tax rate, base, and law change 0 0
 Supplementary medical
 insurance premiums 0 0

 In personal tax and nontax
 payments:
 Tax law changes 0 0
 Minnesota's tax rebate -5.2 5.2

NOTE/--Most dollar levels are in NIPA table 21

IVA Inventory valuation adjustment

CCAdj Capital consumption adjustment

Farm proprietors' income increased $16.5 billion after decreasing $13.1 billion. The upturn primarily reflected the pattern of farm subsidy payments, which increased $16.8 billion after decreasing $7.9 billion.

Rental income of persons increased $9.2 billion after decreasing $9.8 billion. The upturn was largely accounted for by a rebound from $4.7 billion of uninsured losses in the third quarter that had resulted from Hurricane Floyd.

Wage and salary disbursements increased $67.8 billion after increasing $76.8 billion. Disbursements slowed most in the goods-producing and the distributive industries. In private wages and salaries, the slowdown mainly reflected a downturn in average weekly hours and a slowdown in average hourly earnings.

The Year 1999

In 1999, the U.S. economy experienced another year of above-average growth in production and income and below-average inflation. Real GDP and real DPI both increased 4.0 percent, a little less than in 1998 but above their average growth rates for the current expansion; for the expansion, which began in the second quarter of 1991, the average annual growth rates are 3.6 percent for real GI)V and 3.0 percent for real DPI.(3) The price index for gross domestic purchases increased 1.5 percent in 1999, up from 0.7 percent in 1998 but less than the 1.8-percent average rate of increase for the expansion as a whole.

PCE increased 5.3 percent in 1999 and contributed 3.5 percentage points to the growth of real GDP; almost half of the PCE increase was in services. Nonresidential fixed investment increased 8.3 percent and contributed 1.0 percentage points to real GDP growth; equipment and software more than accounted for the increase. Government spending increased 3.7 percent and contributed 0.6 percentage point; most of the increase was accounted for by State and local government. The contributions of these components were partly offset by imports, which increased 11.8 percent and subtracted 1.5 percentage points from GDP growth.

The growth in real DPI reflected a larger increase in current-dollar DPI than in PCE prices. The increase in current-dollar DPI was largely accounted for by wage and salary disbursements, which increased $286.7 billion (or 6.8 percent); proprietors' income, transfer payments to persons, and personal interest income also contributed. Personal tax and nontax payments increased $79.4 billion. The personal saving rate decreased to 2.4 percent from 3.7 percent.

The increase in the price index for gross domestic purchases mainly reflected increases in prices of PCE and of government consumption expenditures and gross investment that were partly offset by a decrease in prices of nonresidential fixed investment. About half of the step-up in gross domestic purchases prices was attributable to an acceleration in food prices and an upturn in energy prices; the price index for gross domestic purchases excluding food and energy increased 1.4 percent after increasing 1.0 percent.

Fourth-Quarter 1999 Advance GDP Estimate: Source Data and Assumptions

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

Personal consumption expenditures: Sales of retail stores (3) and unit auto and truck sales (3);

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

Residential investment:. Construction put in place (2) and single-family housing starts (3);

Change in private inventories: Manufacturing and trade inventories (2) 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: Federal outlays (3), State and local construction put in place (2), and State and local employment (3);

GDP prices: Consumer price index (3), producer price index (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 listing of assumptions is available from STAT-USA/Internet, a service of the U.S. Department of Commerce, or from the BEA Web site <www.bea.doc.gov>.

Table A.--Summary of Major Data Assumptions for Advance Estimates, 1999:IV

[Billions of dollars, seasonally adjusted at annual rates]

 1999
 July August

Fixed investment:
 Nonresidential structures:
 Buildings, utilities, and
 farm:
 Value of new nonresidential
 construction put in place 183.3 181.0
 Equipment and software:
 Manufacturers' shipments of
 complete civilian aircraft 37.9 56.2
 Manufacturers' shipments of
 nondefense capital goods
 other than aircraft 585.3 575.0
 Residential structures:
 Value of new residential
 construction put in place:
 1-unit structures 211.3 210.7
 2-or-more-unit structures 27.6 27.9

Change in private inventories,
 nonfarm:
 Change in inventories for
 manufacturing and trade
 (except nonmerchant
 wholesalers) for industries
 other than motor vehicles
 and equipment in trade 49.9 35.4

Net exports:(2)
 Exports of goods:
 U.S. exports of goods,
 balance-of-payments basis 670.7 709.7
 Excluding nonmonetary
 gold 668.9 704.9
 Imports of goods:
 U.S. exports of goods,
 balance-of-payments basis 1,047.7 1,071.2
 Excluding nonmonetary
 gold 1,045.0 1,063.3
 Net exports of goods (exports
 less imports) -377.1 -361.6
 Excluding nonmonetary
 gold -376.1 -358.4

Government consumption
 expenditures and gross
 investment:
 State and local:
 Structures:
 Value of new construction
 put in place 141.9 143.3

 1999
 September October

Fixed investment:
 Nonresidential structures:
 Buildings, utilities, and
 farm:
 Value of new nonresidential
 construction put in place 180.9 178.1
 Equipment and software:
 Manufacturers' shipments of
 complete civilian aircraft 29.7 46.8
 Manufacturers' shipments of
 nondefense capital goods
 other than aircraft 568.7 579.9
 Residential structures:
 Value of new residential
 construction put in place:
 1-unit structures 211.0 212.7
 2-or-more-unit structures 28.1 27.0

Change in private inventories,
 nonfarm:
 Change in inventories for
 manufacturing and trade
 (except nonmerchant
 wholesalers) for industries
 other than motor vehicles
 and equipment in trade 57.3 56.5

Net exports:(2)
 Exports of goods:
 U.S. exports of goods,
 balance-of-payments basis 707.2 707.1
 Excluding nonmonetary
 gold 695.5 702.3
 Imports of goods:
 U.S. exports of goods,
 balance-of-payments basis 1,069.7 1,088.9
 Excluding nonmonetary
 gold 1,058.2 1,082.5
 Net exports of goods (exports
 less imports) -362.5 -381.8
 Excluding nonmonetary
 gold -362.7 -380.2

Government consumption
 expenditures and gross
 investment:
 State and local:
 Structures:
 Value of new construction
 put in place 144.6 142.8

 1999
 November December(1)

Fixed investment:
 Nonresidential structures:
 Buildings, utilities, and
 farm:
 Value of new nonresidential
 construction put in place 183.9 183.4
 Equipment and software:
 Manufacturers' shipments of
 complete civilian aircraft 38.9 48.3
 Manufacturers' shipments of
 nondefense capital goods
 other than aircraft 573.5 571.2
 Residential structures:
 Value of new residential
 construction put in place:
 1-unit structures 215.0 220.1
 2-or-more-unit structures 28.9 28.1

Change in private inventories,
 nonfarm:
 Change in inventories for
 manufacturing and trade
 (except nonmerchant
 wholesalers) for industries
 other than motor vehicles
 and equipment in trade 84.7 73.6

Net exports:(2)
 Exports of goods:
 U.S. exports of goods,
 balance-of-payments basis 714.5 723.6
 Excluding nonmonetary
 gold 702.4 713.8
 Imports of goods:
 U.S. exports of goods,
 balance-of-payments basis 1,103.8 1,115.2
 Excluding nonmonetary
 gold 1,091.8 1,105.4
 Net exports of goods (exports
 less imports) -389.3 -391.6
 Excluding nonmonetary
 gold -389.3 -391.6

Government consumption
 expenditures and gross
 investment:
 State and local:
 Structures:
 Value of new construction
 put in place 152.4 146.2

(1.) Assumed

(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

Updated Schedule for Publication of Revised Estimates

In October 1999, BEA released revised estimates of the national income and product accounts (NIPA's) for 1959-99 that incorporated the latest comprehensive NIPA revision. Below is an approximate schedule for publication in the SURVEY OF CURRENT BUSINESS of additional NIPA estimates and of other estimates that will incorporate the results of this revision. April 2000: Revised NIPA estimates, 1929-58

April 2000: Fixed assets and consumer durable goods (fixed reproducible tangible wealth), 1925-98

May 2000: Gross product by industry, 1987-98

June 2000: State personal income, 1969-99

July 2000: Local area personal income, 1969-98

Fall 2000: Gross state product, 1977-98

In addition, these estimates will be posted on BEA's Web site at <www.bea.doc.gov> as soon as they are available.

(1.) Quarterly estimates in the NIPA's are expressed at seasonally adjusted annual rates. Quarter-to-quarter dollar changes are the differences between the published estimates. Quarter-to-quarter percent changes are annualized and are calculated from unrounded data unless otherwise specified.

Real estimates are calculated using a chain-type Fisher formula with annual weights for all years and for all quarters except those for the most recent year, which are calculated using quarterly weights; real estimates are expressed both as index numbers (1996 = 100) and as chained (1996) dollars. Price indexes (1996 = 100) are also calculated using a chain-type Fisher formula.

(2.) For more information on motor-vehicle developments, see "Motor Vehicles, 1999" in this issue.

(3.) The 1999 increases are calculated from annual levels for 1998 and 1999. From fourth-quarter 1998 to fourth-quarter 1999, real GDP increased 4.2 percent, and real DPI increased 3.8 percent.