U.S. Bureau of Economic Analysis,
Survey of Current Business, April 2007. See also
< http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp?Selected=N > (released as February 2007).
For more information:
http://www.bea.gov/National/Index.htm
National income and product accounts
The national income and product accounts (NIPA’s) show the value and composition of the Nation’s output and the
distribution of incomes generated in its production. The accounts include estimates of gross domestic product (GDP)-the
market value of the Nation’s output of goods and services-in current and real terms, GDP price measures, the goods and
services that make up GDP in current and real terms, national income, personal income, and corporate profits. In addition,
BEA produces specialized measures such as estimates of auto and truck output, GDP of corporate business, housing output,
and business inventories and sales. Estimates of gross product originating by industry are prepared annually in current and real
Measures of the inventory and fixed capital stocks consistent with the NIPA output measures are also provided.Further, the accounts provide a consistent framework within which estimates of analytical interest-such as the role of research
and development in the U.S. economy or as the interaction of the economy and the environment-can be developed.
The estimates of GDP are prepared each quarter in the following sequence: Advance estimates are released near the end of
the first month after the end of the quarter; as more detailed and comprehensive data become available, preliminary and final
estimates are released near the end of the second and third months, respectively. Monthly estimates of personal income and
outlays are released near the end of the month following the reference month; estimates for the 2 to 4 most recent months are
revised at that time. Ordinarily, annual NIPA revisions are carried out each summer and cover the months and quarters of the
most recent calendar year and the preceding 2 years. (For example, the July 1994 revision covered 1991, 1992, and 1993.)
These revisions are timed to incorporate newly available major annual source data. Comprehensive (benchmark) revisions are
carried out at about 5-year intervals, a comprehensive revision was released in January 1996. Current quarterly NIPA
estimates appear in a set of 54 “selected” tables each month in the SURVEY OF CURRENT BUSINESS. The full set of
NIPA tables (138 tables) usually is published at the time of annual revisions and comprehensive revisions. Annual estimates of
the fixed capital stock are reported shortly thereafter.
Terms
National income and product account
GDP is measured as the sum of personal consumption expenditures, gross private domestic investment (including change in
business inventories and before deduction of charges for CFC), net exports of goods and services (exports less imports), and
government consumption expenditures and gross investment. GDP excludes intermediate purchases of goods and services by
business.
Personal consumption expenditures is goods and services purchased by persons resident in the United States.
Personal consumption expenditures (PCE) consists mainly of purchases of new goods and of services by individuals from
business. In addition, PCE includes purchases of new goods and of services by nonprofit institutions (including
compensation of employees), net purchases of used goods by individuals and nonprofit institutions, and purchases abroad of
goods and services by U.S. residents. PCE also includes purchases for certain goods and services provided by
government agenciesprimarily tuition payments for higher education, charges for medical care, and charges for water and
sanitary services. Finally, PCE includes imputed purchases that keep PCE invariant to changes in the way that certain
activities are carried outfor example, whether housing is rented or owned, whether financial services are explicitly
charged, or whether employees are paid in cash or in kind.
The following conventions are used to classify each PCE commodity: Durable goods are commodities that can be
stored or inventoried and that have an average life of at least 3 years; nondurable goods are all other commodities
that can be stored or inventoried; and services are commodities that cannot be stored and that are consumed at the
place and time of purchase.
Gross private domestic investment consists of fixed investment and change in business inventories.
Fixed investment consists of both nonresidential fixed investment and residential fixed investment. It
consists of purchases of fixed assets, which are commodities that will be used in a production process for more than 1 year,
including replacements and additions to the capital stock, and it is measured before a deduction for consumption of fixed
capital. It covers all investment by private businesses and by nonprofit institutions in the United States, regardless of
whether the investment is owned by U.S. residents. (Purchases of the same types of equipment and structures by government
agencies are included in government gross investment.) It excludes investment by U.S. residents in other countries.
Nonresidential fixed investment consists of both structures and producers’ durable equipment (PDE).
Nonresidential structures consists of new construction, brokers’ commissions on sales of structures, and net purchases of
used structures by private business and by nonprofit institutions from government agencies. New construction also includes
hotels and motels and mining exploration, shafts, and wells.
Nonresidential PDE consists of private business purchases on capital account of new machinery, equipment such as
furniture, and vehicles (except for personal-use portions of equipment purchased for both business and personal use, which
are included in PCE), dealers’ margins on sales of used equipment, and net purchases of used equipment from government
agencies, from persons, and from the rest of the world.
Residential fixed investment consists of private structures and of residential PDEequipment owned by landlords and
rented to tenants. Investment in structures consists of new units, improvements to existing units, mobile homes, brokers’
commissions on the sale of residential property, and net purchases of used structures from government agencies.
Change in business inventories is the change in the physical volume of goods purchased by private business for use
in the production of other commodities or for resale, valued in average prices of the period. It differs from the change in the
book value of inventories reported by most business; the difference is the inventory valuation adjustment (described on the
next page).
Net exports of goods and services is exports less imports of goods and services. Receipts and
payments of factor income and transfer payments to the rest of the world (net) are excluded.
Government consumption expenditures and gross investment consists of net purchases of goods, services, and
structures from business and from the rest of the world by general government; payments by general government to
households in the form of compensation of employees; the consumption of general government fixed capital, which
represents the value of the current services of fixed assets of general government; net purchases of fixed assets by
government enterprises; inventory change of government enterprises; and a deduction for general government
salesprimarily tuition payments for higher education and charges for medical care. Of this total, gross investment is net
purchases of new and used structures and equipment by general government and government enterprises; all other
transactions are consumption expenditures. Government consumption expenditures and gross investment excludes purchases
by government enterprises (except for fixed assets), transfer payments, interest paid or received by government, subsidies,
and transactions in financial assets and in nonproduced assets, such as land.
Chained-dollar measures
BEA also prepares measures of real GDP and its components in a dollar-denominated form, designated "chained (1992) dollar
estimates." For GDP and most other series, these estimates are computed by multiplying the 1996 current-dollar value by a
corresponding quantity index number and then dividing by 100.
For analyses of changes over time in an aggregate or in a component, the percentage changes calculated from the chained-dollar
estimates and from the chain-type quantity indexes are the same; any differences will be small and due to rounding. However,
because the relative prices used as weights for any period other than the base period differ from those used for the base period, the
chained-dollar values for the detailed GDP components do not necessarily sum to the chained-dollar estimate of GDP or to any
intermediate aggregate. A measure of the extent of such differences is provided in most chained-dollar tables by a “residual” line,
which indicates the difference between GDP (or an other major aggregate) and the sum of the most detailed components in the table.
For periods close to the base year, when there usually has not been much change in the relative prices that are used as the weights
for the chain-type index, the residuals tend to be small, and the chained (1996) dollar estimates can be used to approximate the
contributions to growth and to aggregate the detailed estimates.
As one moves further from the base year, the residual tends to become larger, and the chained-dollar estimates become less useful
for analyses of contributions to growth. In general, the use of chained-dollar estimates to calculate component shares or component
contributions to real growth may be misleading for periods away from the base year. In particular, for components for which relative
prices are changing rapidly, these calculations may be misleading even just a few years from the base year.
referenced on dataset section Notes (#2)
