The following is the un-edited press release from the U.S. Bureau of Economic Analysis of the U.S. Department of Commerce.




GROSS DOMESTIC PRODUCT: SECOND QUARTER 2005 (PRELIMINARY)
CORPORATE PROFITS: SECOND QUARTER 2005 (PRELIMINARY)

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 3.3 percent in the second quarter of 2005, according to preliminary estimates released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.8 percent.

The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the increase in real GDP was 3.4 percent (see """"Revisions"""" on page 3).

The major contributors to the increase in real GDP in the second quarter were personal
consumption expenditures, exports, equipment and software, residential fixed investment, and
government spending. The contribution of these components were partly offset by a negative
contribution from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the second quarter primarily reflected a downturn in private inventory investment that was partly offset by a deceleration in imports and an acceleration in exports.

Final sales of computers contributed 0.33 percentage point to second-quarter real GDP growth after contributing 0.37 percentage point to first-quarter growth. Motor vehicle output contributed 0.01 percentage point to second-quarter real GDP growth after contributing 0.15 percentage point to the first-quarter growth.


The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 3.1 percent in the second quarter, 0.1 percentage point less than the advance estimate; this index increased 2.9 percent in the first quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.9 percent in the second quarter, compared with an increase of 3.0 percent in the first.

Real personal consumption expenditures increased 3.0 percent in the second quarter, compared with an increase of 3.5 percent in the first. Real nonresidential fixed investment increased 8.4 percent, compared with an increase of 5.7 percent. Nonresidential structures increased 2.7 percent, in contrast to a decrease of 2.0 percent. Equipment and software increased 10.4 percent, compared with an increase of 8.3 percent. Real residential fixed investment increased 9.8 percent, compared with an increase of 9.5 percent.

Real exports of goods and services increased 13.2 percent in the second quarter, compared with an increase of 7.5 percent in the first. Real imports of goods and services increased 0.5 percent, compared with an increase of 7.4 percent.

Real federal government consumption expenditures and gross investment increased 1.6 percent in the second quarter, compared with an increase of 2.4 percent in the first. National defense increased 2.4 percent, compared with an increase of 3.0 percent. Nondefense decreased 0.1 percent, in contrast to an increase of 1.1 percent. Real state and local government consumption expenditures and gross investment increased 3.3 percent, compared with an increase of 1.6 percent.

The real change in private inventories subtracted 1.99 percentage points from the second-quarter change in real GDP, after adding 0.29 percentage point to the first-quarter change. Private businesses increased inventories $2.6 billion in the second quarter, following increases of $58.2 billion in the first quarter and $50.1 billion in the fourth.

Real final sales of domestic product -- GDP less change in private inventories -- increased 5.4 percent in the second quarter, compared with an increase of 3.5 percent in the first.


Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 1.9 percent in the second quarter, compared with an increase of 4.0 percent in the first.


Gross national product