The following is the unedited transcript of the news release from the Department of Commerce.


GROSS DOMESTIC PRODUCT: FOURTH QUARTER 2005 (ADVANCE)


Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.1 percent in the fourth quarter of 2005, according to advance estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.

The Bureau emphasized that the fourth-quarter """"advance"""" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The fourth-quarter """"preliminary"""" estimates, based on more comprehensive data, will be released on February 28, 2006.

The major contributors to the increase in real GDP in the fourth quarter primarily reflected positive contributions from private inventory investment, personal consumption expenditures (PCE), equipment and software, exports, and residential fixed investment that were partly offset by a negative contribution from federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the fourth quarter primarily reflected a deceleration in PCE, an acceleration in imports, a downturn in federal government spending, and decelerations in equipment and software and in residential fixed investment that were partly offset by an upturn in private inventory investment.

Final sales of computers contributed 0.33 percentage point to the fourth-quarter growth in real GDP after contributing 0.16 percentage point to the third-quarter growth. Motor vehicle output subtracted 0.58 percentage point from the fourth-quarter growth in real GDP after contributing 0.56 percentage point to the third-quarter growth.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 3.3 percent in the fourth quarter, compared with an increase of 4.2 percent in the third. Excluding food and energy prices, the price index for gross domestic purchases increased 2.9 percent in the fourth quarter, compared with an increase of 2.5 percent in the third.


FOOTNOTE.--Quarterly estimates 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 are annualized. """"Real"""" estimates are in chained (2000) dollars. Price indexes are chain-type measures.



Real personal consumption expenditures increased 1.1 percent in the fourth quarter, compared with an increase of 4.1 percent in the third. Durable goods purchases decreased 17.5 percent, in contrast to an increase of 9.3 percent. Nondurable goods purchases increased 5.1 percent, compared with an increase of 3.5 percent. Services expenditures increased 3.2 percent, compared with an increase of 3.3 percent.Real nonresidential fixed investment increased 2.8 percent in the fourth quarter, compared with an increase of 8.5 percent in the third. Nonresidential structures increased 0.7 percent, compared with an increase of 2.2 percent. Equipment and software increased 3.5 percent, compared with an increase of 0.6 percent. Real residential fixed investment increased 3.5 percent, compared with an increase of 7.3 percent.

Real exports of goods and services increased 2.4 percent in the fourth quarter, compared with an increase of 2.5 percent in the third. Real imports of goods and services increased 9.1 percent, compared with an increase of 2.4 percent.

Real federal government consumption expenditures and gross investment decreased 7.0 percent in the fourth quarter, in contrast to an increase of 7.4 percent in the third. National defense decreased 13.1 percent, in contrast to an increase of 10.0 percent. Nondefense increased 6.9 percent, compared with an increase of 2.4 percent. Real state and local government consumption expenditures and gross investment increased 0.4 percent, compared with an increase of 0.2 percent.

The real change in private inventories added 1.45 percentage points to the fourth-quarter change in real GDP after subtracting 0.43 percentage point from the third-quarter change. Private businesses increased inventories $25.7 billion in the fourth quarter, following decreases of $13.3 billion in the third quarter and $1.7 billion in the second.

Real final sales of domestic product -- GDP less change in private inventories -- decreased 0.3 percent in the fourth quarter, in contrast to an increase of 4.6 percent in the third.


Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 2.2 percent in the fourth quarter, compared with an increase of 4.0 percent in the third.


Disposition of personal income

Current-dollar personal income increased $231.6 billion (9.4 percent) in the fourth quarter, compared with an increase of $45.3 billion (1.8 percent) in the third. The acceleration in personal income partly reflected a rebound from the third-quarter impacts of Hurricanes Katrina and Rita. Rental income and proprietors'' income were reduced by the uninsured property damage caused by the hurricanes, and current transfer receipts were increased by insurance settlements related to the hurricanes. For more information, see the FAQs on """"Disasters"""" on BEA''s Web site.

Personal current taxes increased $18.4 billion in the fourth quarter, compared with an increase of $9.9 billion in the third.

Disposable personal income increased $213.2 billion (9.8 percent) in the fourth quarter, compared with an increase of $35.4 billion (1.6 percent) in the third. Real disposable personal income increased 7.0 percent, in contrast to a decrease of 2.0 percent.


Personal outlays increased $87.7 billion (3.9 percent) in the fourth quarter, compared with an increase of $172.7 billion (7.9 percent) in the third. Personal saving -- disposable personal income less personal outlays -- was a negative $33.3 billion in the fourth quarter, compared with a negative $158.9 billion in the third. The personal saving rate -- saving as a percentage of disposable personal income -- increased from a negative 1.8 percent in the third quarter to a negative 0.4 percent in the fourth. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from the previous periods. For more information, see the FAQs on """"Personal Saving"""" on BEA''s Web site.


Current-dollar GDP

Current-dollar GDP -- the market value of the nation''s output of goods and services -- increased 4.2 percent, or $129.6 billion, in the fourth quarter to a level of $12,735.3 billion. In the third quarter, current-dollar GDP increased 7.6 percent, or $227.7 billion.


2005 GDP

Real GDP increased 3.5 percent in 2005 (that is, from the 2004 annual level to the 2005 annual level), compared with an increase of 4.2 percent in 2004.

The major contributors to the increase in real GDP in 2005 were personal consumption expenditures (PCE), equipment and software, exports, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased in 2005.

The deceleration in real GDP in 2005 primarily reflected a downturn in private inventory investment and decelerations in PCE and in federal government spending that were partly offset by a deceleration in imports.

The price index for gross domestic purchases increased 3.2 percent in 2005, compared with an increase of 2.9 percent in 2004.

Current-dollar GDP increased 6.4 percent, or $745.1 billion, in 2005. Current-dollar GDP increased 7.0 percent, or $763.1 billion, in 2004.

During 2005 (that is, measured from the fourth quarter of 2004 to the fourth quarter of 2005), real GDP increased 3.1 percent. Real GDP increased 3.8 percent during 2004. The price index for gross domestic purchases increased 3.4 percent during 2005, the same increase as during 2004.




Available at: www.bea.gov/bea/rels.htm