The following is the unedited transcript of the news release from the U.S. Bureau of Economic Analysis of the Department of Commerce.



GROSS DOMESTIC PRODUCT: THIRD QUARTER 2005 (FINAL)

CORPORATE PROFITS: THIRD QUARTER 2005 (FINAL)


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 4.1 percent in the third quarter of 2005, according to final estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.3 percent.

The GDP estimates released today are based on more complete source data than were available for the preliminary estimates issued last month. In the preliminary estimates, the increase in real GDP was 4.3 percent (see """"""""""""""""Revisions"""""""""""""""" on page 3).

The major contributors to the increase in real GDP in the third quarter were personal consumption expenditures (PCE), equipment and software, federal government spending, and residential fixed investment. The contributions 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 acceleration in real GDP growth in the third quarter primarily reflected a smaller decrease in private inventory investment and accelerations in PCE and in federal government spending that were partly offset by a deceleration in exports, an upturn in imports, and decelerations in state and local government spending and in residential fixed investment.

Final sales of computers contributed 0.16 percentage point to the third-quarter growth in real GDP after contributing 0.32 percentage point to the second-quarter growth. Motor vehicle output contributed 0.56 percentage point to the third-quarter growth in real GDP after subtracting 0.01 percentage point from the second-quarter growth.


The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 4.2 percent in the third quarter, 0.2 percentage point more than the preliminary estimate; this index increased 3.3 percent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 2.5 percent in the third quarter, compared with an increase of 2.1 percent in the second.

Real personal consumption expenditures increased 4.1 percent in the third quarter, compared with an increase of 3.4 percent in the second. Real nonresidential fixed investment increased 8.5 percent, compared with an increase of 8.8 percent. Nonresidential structures increased 2.2 percent,
compared with an increase of 2.7 percent. Equipment and software increased 10.6 percent, compared with an increase of 10.9 percent. Real residential fixed investment increased 7.3 percent, compared with an increase of 10.8 percent.

Real exports of goods and services increased 2.5 percent in the third quarter, compared with an increase of 10.7 percent in the second. Real imports of goods and services increased 2.4 percent, in contrast to a decrease of 0.3 percent.

Real federal government consumption expenditures and gross investment increased 7.4 percent in the third quarter, compared with an increase of 2.4 percent in the second. National defense increased 10.0 percent, compared with an increase of 3.7 percent. Nondefense increased 2.4 percent, in contrast to a decrease of 0.2 percent. Real state and local government consumption expenditures and gross investment increased 0.2 percent, compared with an increase of 2.6 percent.

The real change in private inventories subtracted 0.43 percentage point from the third-quarter change in real GDP after subtracting 2.14 percentage points from the second-quarter change. Private businesses reduced inventories $13.3 billion in the third quarter, following a decrease of $1.7 billion in the second quarter and an increase of $58.2 billion in the first.

Real final sales of domestic product -- GDP less change in private inventories -- increased 4.6 percent in the third quarter, compared with an increase of 5.6 percent in the second.


Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 4.0 percent in the third quarter, compared with an increase of 2.1 percent in the second.