Source: U.S. Bureau of Economic Analysis, National Income and Product Accounts of the United States, 1929-97, vol. 1, forthcoming;and Survey of Current Business, May 2000.

http://www.bea.doc.gov/bea/dn1.htm

****************************************************************************************The national income and product accounts (NIPA's) show the value and composition of the Nation's output and thedistribution of incomes generated in its production. The accounts include estimates of gross domestic product (GDP)-themarket value of the Nation's output of goods and services-in current and real terms, GDP price measures, the goods andservices 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 realterms. 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 researchand 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 ofthe first month after the end of the quarter; as more detailed and comprehensive data become available, preliminary and finalestimates are released near the end of the second and third months, respectively. Monthly estimates of personal income andoutlays are released near the end of the month following the reference month; estimates for the 2 to 4 most recent months arerevised at that time. Ordinarily, annual NIPA revisions are carried out each summer and cover the months and quarters of themost 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 arecarried out at about 5-year intervals, a comprehensive revision was released in January 1996. Current quarterly NIPAestimates appear in a set of 54 "selected" tables each month in the SURVEY OF CURRENT BUSINESS. The full set ofNIPA tables (138 tables) usually is published at the time of annual revisions and comprehensive revisions. Annual estimates ofthe fixed capital stock are reported shortly thereafter.

*Terms

Personal saving is personal income less the sum of personal outlays and personal tax and nontax payments. It is thecurrent saving of individuals (including proprietors and partnerships), nonprofit institutions that primarily serve individuals,life insurance carriers, private noninsured welfare funds, and private trust funds. Personal saving may also be viewed as thesum of the net acquisition of financial assets (such as cash and deposits, securities, and the change in the net equity ofindividuals in life insurance and in private noninsured pension plans) and the change in physical assets less the sum of netborrowing and of consumption of fixed capital.

Undistributed profits is corporate profits after tax less dividends.

Inventory valuation adjustment (IVA) for corporations is the difference between the cost of inventory withdrawalsas valued in the source data used to determine profits before tax and the cost of withdrawals valued at replacement cost. It isneeded because inventories as reported in the source data are often charged to cost of sales (that is, withdrawn) at theiracquisition (historical) cost rather than at their replacement cost (the concept underlying the NIPA's). As prices change,companies that value inventory withdrawals at acquisition cost may realize profits or losses. Inventory profits, acapital-gains-like element in profits, result from an increase in inventory prices, and inventory losses, a capital-loss-likeelement in profits, result from a decrease in inventory prices. In the NIPA's, inventory profits or losses are shown asadjustments to business income (corporate profits and nonfarm proprietors' income); they are shown as the IVA with the signreversed. No adjustment is needed to farm proprietors' income because farm inventories are measured on acurrent-market-cost basis.

Private capital consumption adjustment is the difference between private capital consumption allowances and private consumption offixed capital.

Consumption of fixed capital is a charge for the using up of private and government fixed capital located in theUnited States. It is based on studies of prices of used equipment and structures in resale markets. For general governmentand for nonprofit institutions that primarily serve individuals, it is recorded in government consumption expenditures and inpersonal consumption expenditures, respectively, as the value of the current services of the fixed capital assets owned andused by these entities.

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. Itconsists 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 fixedcapital. It covers all investment by private businesses and by nonprofit institutions in the United States, regardless ofwhether the investment is owned by U.S. residents. (Purchases of the same types of equipment and structures by governmentagencies 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).

Government consumption expenditures and gross investment consists of net purchases of goods, services, andstructures from business and from the rest of the world by general government; payments by general government tohouseholds in the form of compensation of employees; the consumption of general government fixed capital, whichrepresents the value of the current services of fixed assets of general government; net purchases of fixed assets bygovernment enterprises; inventory change of government enterprises; and a deduction for general governmentsalesprimarily tuition payments for higher education and charges for medical care. Of this total, gross investment is netpurchases of new and used structures and equipment by general government and government enterprises; all othertransactions are consumption expenditures. Government consumption expenditures and gross investment excludes purchasesby 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.

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