BUSINESS SITUATION.

Larkins, Daniel ; Morris, Ralph W. ; Argueta, Jennifer S. 等

ECONOMIC growth picked up in the first quarter of 2001 after slowing in the two preceding quarters, and income accelerated. At the same time, domestic purchases slowed for the third consecutive quarter, and prices increased more than in the previous quarter.

According to the "advance" estimates of the national income and product accounts (NIPA's):

* Real gross domestic product (GDP)--a measure of domestic production of goods and services--increased 2.0 percent in the first quarter of 2001, twice the growth rate in the fourth quarter of 2000 and about the same as in the third quarter of 2000 (table 1 and chart 1).(1) Despite the step-up, growth in the first quarter was well below the 3.6-percent average rate for the current-expansion (which began in the second quarter of 1991).

[GRAPH OMITTED]

Table 1.--Real Gross Domestic Product, Real Gross Domestic
Purchases, and Real Final Sales to Domestic Purchasers

[Seasonally adjusted at annual rates]

 Billions of chained (1996) dollars

 Level Change from preceding quarter

 2001 2000 2001

 I II III IV I

Gross domestic product 9,439.9 127.1 50.6 24.2 46.2

Less: Exports of goods
 and services 1,133.6 37.0 37.0 -19.0 -6.2
Plus: Imports of goods
 and services 1,538.5 63.5 61.2 -4.9 -43.0

Equals: Gross domestic
purchases 9,817.0 150.7 71.7 37.2 13.8

Less: Change in private
 inventories -7.1 42.0 -6.1 -16.8 -62.8
 Nonfarm -13.1 39.3 -4.9 -16.9 -63.6
 Farm 5.9 2.6 -1.2 .3 .6

Equals: Final sales to
domestic purchasers 9,811.2 110.6 76.8 51.6 72.3

Personal consumption
 expenditures 6,422.6 47.1 69.2 43.5 49.3
 Durable goods 921.5 -11.5 16.5 -7.2 25.5
 Nondurable goods 1,899.6 16.3 21.5 4.8 12.2
 Services 3,617.6 39.5 32.6 43.2 15.1
Private fixed investment 1,794.2 46.7 13.7 -4.2 7.1
 Nonresidential 1,442.2 47.2 26.3 -.5 3.9
 Structures 301.6 3.0 9.6 7.2 7.8
 Equipment and software 1,146.7 46.2 15.8 -9.7 -6.0
 Residential 361.9 1.2 -10.3 -3.3 2.9
Government consumption
 expenditures and
 gross investment 1,605.1 18.6 -5.5 11.4 15.5
 Federal 558.6 21.7 -13.0 5.1 7.7
 National defense 357.9 13.6 -8.9 7.5 4.2
 Nondefense 200.5 8.2 -4.2 -2.3 3.4
 State and local 1,046.0 -2.8 7.3 6.2 7.9

Addendum: Final sales of
domestic product 9,433.9 87.3 55.6 38.6 104.4

 Percent change from
 preceding quarter

 2000 2001

 II III IV I

Gross domestic product 5.6 2.2 1.0 2.0

Less: Exports of goods
 and services 14.3 13.9 -6.4 -2.2
Plus: Imports of goods
 and services 18.6 17.0 -1.2 -10.4

Equals: Gross domestic
purchases 6.5 3.0 1.5 .6

Less: Change in private
 inventories ... ... ... ...
 Nonfarm ... ... ... ...
 Farm ... ... ... ...

Equals: Final sales to
domestic purchasers 4.7 3.2 2.1 3.0

Personal consumption
 expenditures 3.1 4.5 2.8 3.1
 Durable goods -5.0 7.6 -3.1 11.9
 Nondurable goods 3.6 4.7 1.0 2.6
 Services 4.6 3.7 4.9 1.7
Private fixed investment 11.2 3.1 -.9 1.6
 Nonresidential 14.6 7.7 -.1 1.1
 Structures 4.4 14.6 10.4 11.0
 Equipment and software 17.9 5.6 -3.3 -2.1
 Residential 1.3 -10.6 -3.6 3.3
Government consumption
 expenditures and
 gross investment 4.8 -1.4 2.9 4.0
 Federal 17.2 -9.0 3.8 5.7
 National defense 16.9 -9.7 8.9 4.9
 Nondefense 17.8 -7.9 -4.6 7.0
 State and local -1.1 2.9 2.5 3.1

Addendum: Final sales of
domestic product 3.9 2.4 1.7 4.6

NOTE:--Chained (1996) dollar series are calculated as the product of
the chain-type quantity index and the 1996 current-dollar value of the
corresponding series, divided into 100. Because the formula for the
chain-type quantity indexes uses weights of more than one period, the
corresponding chained-dollar estimates usually are not additive.
Chained (1996) dollar levels and residuals, which measure the extent of
nonadditivity in each table, are shown in NIPA table S.1. (See
"Selected NIPA Tables," which begins on page D-2 in this issue.)

* Gross domestic purchases--a measure of domestic demand for goods and services regardless of where they were produced--increased 0.6 percent, less than half the growth rate in the fourth quarter.(2) The smaller increase in gross domestic purchases than in GDP in the first quarter is unusual: In the preceding 8 quarters and in 15 of the preceding 16 quarters, purchases increased more than GDP.

* Both consumer spending and government spending contributed substantially to the increase in real GDP in the first quarter, as they had in the fourth (see NIPA table S.2). The largest offset in the first quarter was a sharp drop in inventory investment that subtracted 2.5 percentage points from GDP growth.(3) Final sales of domestic product--GDP less inventory investment--accelerated to its biggest increase in a year.

* The production of goods increased slightly after decreasing, and the production of structures stepped up; the production of services slowed somewhat (table 2). The fourth-quarter decrease in the production of goods and the first-quarter uptick represent the weakest back-to-back quarters of the current expansion.

Table 2.--Real Gross Domestic Product by Type of Product

[Seasonally adjusted at annual rates]

 Billions of chained (1996) dollars

 Level Change from preceding quarter

 2001 2000 2001

 I II III IV I

Gross domestic product 9,439.9 127.1 50.6 24.2 46.2

 Goods 3,827.8 76.9 39.0 -31.7 1.7
 Services 4,810.8 59.5 14.8 46.0 31.2
 Structures 814.1 -6.1 -1.2 5.3 11.2

Addenda:
 Motor vehicle output 303.9 -4.1 -16.1 -19.9 -15.3
 Gross domestic
 product less motor
 vehicle output 9,132.4 130.6 65.5 42.6 60.0

Final sales of computers ... ... ... ... ...
 Gross domestic product
 less final sales
 of computers ... ... ... ... ...

 Percent change from
 preceding quarter

 2000 2001

 II III IV I

Gross domestic product 5.6 2.2 1.0 2.0

 Goods 8.5 4.1 -3.2 .2
 Services 5.2 1.3 3.9 2.6
 Structures -3.0 -0.6 2.7 5.7

Addenda:
 Motor vehicle output -4.5 -16.9 -21.5 -17.8
 Gross domestic
 product less motor
 vehicle output 6.0 3.0 1.9 2.7

Final sales of computers 55.4 40.6 17.9 21.2
 Gross domestic product
 less final sales
 of computers 5.2 1.8 .8 1.8

NOTE.--See note to table 1 for an explanation of chained
(1996) dollar series. Chained (1996) dollar levels and
residuals for most items are shown in NIPA table 1.4.
Detail on motor vehicle output is shown in NIPA table 8.9B

* The step-up in GDP growth from the fourth quarter to the first reflected a smaller decrease in exports, upturns in residential and nonresidential fixed investment, and an acceleration in consumer spending. (The fourth-quarter deceleration reflected downturns in exports and nonresidential fixed investment and a slowdown in consumer spending.)

* Real disposable personal income increased 2.0 percent in the first quarter after increasing 0.7 percent in the fourth, and the personal saving rate fell to -1.0 percent from -0.7 percent.(4)

* Real final sales of computers posted below-average growth for the second quarter in a row, and real motor vehicle output decreased substantially for the third consecutive quarter (table 2). However, even if these components are excluded, GDP decelerated about 1 percentage point in the fourth quarter and accelerated about 1 percentage point in the first.

Computers.--Real final sales of computers increased 21.2 percent in the first quarter and 17.9 percent in the fourth--the smallest increases since the fourth quarter of 1997 and the smallest two-quarter growth since the second and third quarters of 1994. Consumers and businesses contributed to the softening in the fourth quarter; in the first quarter, consumer purchases bounced back, but the softness in business purchases became more pronounced.

Computer prices decreased sharply in the first quarter after five quarters in which price drops were smaller than usual. Software prices increased slightly in both the first and fourth quarters after increasing substantially for several quarters.

Motor vehicles.--Consumer purchases of motor vehicles turned up. Manufacturers continued to offer attractive sales-incentive programs on a broad selection of car and truck models, interest rates on new-car loans at commercial banks decreased (to 9.2 percent from 9.6 percent), and motor-vehicle prices held relatively steady after decreasing.

Business purchases of motor vehicles also turned up, perhaps partly reflecting an increase in purchases by companies with commercial and rental fleets.

Motor vehicle inventories decreased sharply--the biggest decrease in 5 years. The inventory-sales ratio for new domestic autos, which is calculated from units data, dropped to 2.4 at the end of the first quarter after jumping to 2.9 at the end of the fourth.

Prices

The price index for gross domestic purchases, which measures the prices paid for goods and services purchased by U.S. residents, increased 2.8 percent in the first quarter after increasing 1.9 percent in the fourth (table 3). The acceleration partly reflected the effect of a pay raise for Federal employees on the prices of Federal Government consumption expenditures, but it mainly reflected step-ups in the prices of several categories of personal consumption expenditures (PCE) for services. Prices of gross domestic purchases less food and energy increased 2.4 percent after increasing 1.6 percent (chart 2).

[GRAPH OMITTED]

Table 3.--Price Indexes

[Percent change at annual rates; based on seasonally
adjusted index numbers (1996=100)]

 2000 2001

 II III IV I

Gross domestic product 2.4 1.6 2.0 3.2

Less: Exports of goods and services 1.9 .7 .5 -.4
Plus: Imports of goods and services .2 3.8 .2 -2.1

Equals: Gross domestic purchases 2.1 2.0 1.9 2.8

Less: Change in private inventories ... ... ... ...

Equals: Final sales to domestic purchasers 2.1 2.0 1.9 2.8

 Personal consumption expenditures 2.1 1.8 1.9 3.3
 Durable goods -.6 -2.3 -1.1 -0.7
 Nondurable goods 3.3 2.2 2.0 1.9
 Services 2.0 2.5 2.5 4.8
 Private fixed investment 1.9 2.0 1.1 .2
 Nonresidential 1.6 1.8 .1 -1.3
 Structures 3.7 5.0 5.4 6.6
 Equipment and software 1.0 .8 -1.6 -3.8
 Residential 2.6 2.7 4.4 5.4
 Government consumption expenditures and
 investment 2.7 2.9 2.8 3.8
 Federal .6 2.6 1.5 5.4
 National defense .8 2.9 1.4 4.3
 Nondefense .4 2.1 1.7 7.3
 State and local 3.8 3.1 3.5 3.0

Addenda:
 Gross domestic purchases:
 Food 2.3 3.5 1.8 4.0
 Energy 11.2 11.1 10.3 8.1
 Less mod and energy 1.7 1.5 1.6 2.4
 Personal consumption expenditures:
 Food 2.3 3.7 1.6 4.0
 Energy goods and services (1) 13.0 8.6 8.9 10.8
 Less food and energy 1.4 1.1 1.6 2.7

(1.) Consists of gasoline, fuel oil, and other energy goods and of
electricity and gas.

NOTE.--Percent changes in major aggregates are shown in NIPA table
8.1. Index numbers are shown in tables 7.1, 7.2. and 7.4.

Prices of PCE increased 3.3 percent after increasing 1.9 percent. The acceleration was mainly accounted for by services and largely reflected step-ups in the prices of financial services, electricity and gas, and medical care (mainly in physician and "other professional" services).(5) Food prices also picked up, reflecting an acceleration in the prices of food purchased for consumption away from home.

Prices of private nonresidential fixed investment decreased after edging up. The downturn was accounted for by equipment and software prices, mainly by computer prices, which declined more in the first quarter than in the fourth.

Prices of government consumption expenditures and gross investment increased more than in the fourth quarter. Prices paid by the Federal Government increased 5.4 percent after increasing 1.5 percent. The step-up reflected the pay raise for civilian and military personnel; excluding the pay raise, prices paid by the Federal Government increased 1.3 percent in the first quarter.(6) Prices paid by State and local governments increased slightly less than in the fourth quarter.

The GDP price index, which measures the prices paid for goods and services produced in United States, increased 3.2 percent after increasing 2.0 percent. Unlike the price index for gross domestic purchases, the GDP price index includes the prices of exports and excludes the prices of imports. Both import prices and export prices decreased after increasing, but the downturn in import prices was more pronounced. The decrease in import prices primarily reflected a sharp drop in the price of imported petroleum.

Personal Income

Income growth stepped up in the first quarter after a small increase in the fourth (chart 3):

* Real disposable personal income (DPI) increased 2.0 percent after increasing 0.7 percent.

* Current-dollar DPI increased 5.3 percent after increasing 2.6 percent.

[GRAPH OMITTED]

The smaller pickup in real DPI than in current-dollar DPI reflected the acceleration in PCE prices.

The personal saving rate continued its downtrend, reaching -1.0 percent in the first quarter, its lowest quarterly level since the beginning of the series in 1946. A negative saving rate indicates that outlays are being financed by the sale of assets, by borrowing, or by using savings from previous periods. Incomplete data suggest that growth in consumer credit accelerated in the first quarter.

Although stock market prices dropped last year, they had risen substantially for an extended period before that, and the resulting gains have contributed to consumers' ability to spend in excess of current income.

Personal income increased $121.2 billion in the first quarter after increasing $80.7 billion in the fourth (table 4). The step-up mainly reflected accelerations in transfer payments and in government wages and salaries and an upturn in farm proprietors' income.

Table 4.--Personal Income and Its Disposition

[Billions of dollars; seasonally adjusted at annual rates]

 Level Change from
 preceding
 quarter

 2001 2000

 I II III

 Wage and salary/disbursements 4,948.9 79.7 64.8
 Private industries 4,165.7 69.5 59.5
 Goods-producing industries 1,183.8 16.2 14.3
 Manufacturing 823.0 10.3 8.3
 Distributive industries 1,165.7 24.8 22.4
 Service industries 1,816.3 28.6 22.9
 Government 783.2 10.3 5.2

 Other labor income 541.1 6.5 7.1

 Proprietors' income with IVA
 and CCAdj 723.4 15.6 15.3
 Farm 20.9 2.4 10.2
 Nonfarm 702.5 13.3 5.0

 Rental income of persons
 with CCAdj 138.0 -4.8 -2.7
 Personal dividend income 414.2 5.7 7.1
 Personal interest income 1,047.0 19.7 11.6

 Transfer payments to persons 1,115.3 19.2 8.1

 Less: Personal contributions
 for social insurance 376.9 5.4 4.3

Personal income 8,550.9 136.3 106.9

Less: Personal tax and nontax
payments 1,371.6 37.9 30.9

Equals: Disposable personal
income 7,179.2 98.4 76.0

Less: Personal outlays 7,253.6 88.7 110.4

Equals:. Personal saving -74.3 9.6 -34.4

Addenda: Special factors in
personal income:

 In wages and salaries:
 Federal pay raise 5.5 0 0

 In farm proprietors' income:
 Federal subsidies(1) 4.7 .4 13.0

 In rental income of persons
 with CCAdj:
 Federal subsidies(1) 1.0 0 2.9

 In transfer payments
 to persons:
 Elimination of social
 security earnings test 0 9.2 -9.2
 Social security retroactive
 payments 0 0 .6
 Cost-of-living adjustments
 in Federal transfer
 programs 16.6 0 0
 In personal tax and nontax
 payments:
 Federal tax law changes -4.4 0 0
 Refunds and State tax
 law changes -1.8 1.9 -.5

 Change from
 preceding
 quarter

 2000 2001

 IV I

 Wage and salary/disbursements 67.1 76.9
 Private industries 64.4 61.8
 Goods-producing industries 11.9 10.5
 Manufacturing 5.0 -3.4
 Distributive industries 26.3 21.3
 Service industries 26.1 30.1
 Government 2.8 15.0

 Other labor income 6.4 7.1

 Proprietors' income with IVA
 and CCAdj -11.6 10.2
 Farm -13.7 2.9
 Nonfarm 2.1 7.3

 Rental income of persons
 with CCAdj -2.7 2.6
 Personal dividend income 7.5 7.0
 Personal interest income 8.6 -4.5

 Transfer payments to persons 9.8 31.3

 Less: Personal contributions
 for social insurance 4.5 9.3

Personal income 80.7 121.2

Less: Personal tax and nontax
payments 34.6 28.9

Equals: Disposable personal
income 46.1 92.2

Less: Personal outlays 83.9 115.0

Equals:. Personal saving -37.8 -22.7

Addenda: Special factors in
personal income:

 In wages and salaries:
 Federal pay raise 0 5.5

 In farm proprietors' income:
 Federal subsidies(1) -14.2 1.7

 In rental income of persons
 with CCAdj:
 Federal subsidies(1) -3.1 .3

 In transfer payments
 to persons:
 Elimination of social
 security earnings test 0 0
 Social security retroactive
 payments .5 -1.1
 Cost-of-living adjustments
 in Federal transfer
 programs .3 16.3
 In personal tax and nontax
 payments:
 Federal tax law changes 0 -4.4
 Refunds and State tax
 law changes 2.7 -.7

(1.) Payments authorized by the Agricultural Risk Protection
Act of 2000.

NOTE:--Most dollar levels ate in NIPA table 2.1.
IVA Inventory valuation adjustment

CCAdj Capital consumption adjustment

* The acceleration in transfer payments primarily reflected cost-of-living adjustments to benefits under social security and other Federal programs.

* The acceleration in government wages and salaries reflected the pay raises for Federal civilian and miliary personnel.

* The upturn in farm proprietors' income reflected the quarterly pattern of Federal farm subsidy payments, which increased $1.7 billion in the first quarter after decreasing $14.2 billion in the fourth; excluding these subsidies, farm proprietors' income increased $1.2 billion after increasing $0.5 billion.(7)

Nonfarm proprietors' income also stepped up in the first quarter, reflecting an upturn in single-family construction (the part of the construction industry in which proprietorships and partnerships are concentrated).

These developments were partly offset by a downturn in personal interest income that mainly reflected the pattern of falling interest rates.

Personal contributions for social insurance--which is subtracted in calculating personal income--increased $9.3 billion after increasing $4.5 billion. The step-up reflected an increase in the social security taxable earnings base for employees and the self-employed (from $76,200 to $80,400) and an increase in the monthly premium for Medicare supplementary medical insurance.

Personal tax and nontax payments increased $28.9 billion after increasing $34.6 billion. The deceleration primarily reflected the indexation provisions of the Federal income tax law.

First-Quarter 2001 Advance GDP Estimate: Source data and Assumptions

The "advance" GDP estimate for the first quarter is based on preliminary and incomplete source data; as more and better data become available, the estimate will be revised. The advance estimate is based on the following major source data. (The number of months for which data were available is shown in parentheses.)

Personal consumption expenditures: Sales of retail stores (3) and unit auto and truck sales (3);

Nonresidential fixed investment: Unit auto and truck sales (3), construction put in place (2), manufacturers' shipments of machinery and equipment other than aircraft (3), shipments of civilian aircraft (2), and exports and imports of machinery and equipment (2);

Residential investment: Construction put in place (2) and single-family housing starts (3);

Change in private inventories: Manufacturing and trade inventories (2) and unit and truck inventories (3);

Net exports of goods and services: Exports and imports of goods and services (2);

Goverment consumption expenditures and gross investment: Some Federal outlays were available for 2 months, others for 3, State and local construction put in place (2), State and local employment (3), and the employment cost index for the quarter;

GDP prices: Consumer price index (3), producer price index (3), U.S. import and export price indexes (3), and values and quantities of petroleum imports (2).

BEA made assumptions for source data that were not available. Table A shows the consumptions for key series; a more comprehensive list is available on BEA's web site at <www.bea.doc.gov> and on STAT-USA's Web site at <www.stat-usa.gov>.

Table A.--Summary of Major Data Assumptions
for Advance Estimates, 2001:1

[Billions of dollars, seasonally adjusted at annual rates]

 2000

 October November December
Private fixed investment:
 Nonresidential structures:
 Buildings:
 Value of new nonresidential
 construction put in place 222.1 224.5 219.7
 Equipment and software:
 Manufacturers' shipments of
 complete aircraft 34.9 35.4 31.3

 Residential structures:
 Value of new residential
 construction put in place:
 1-unit structures 226.1 227.1 229.1
 2-unit-or-more 27.2 28.3 28.6

Change in private inventories,
 nonfarm:
 Change in inventories for
 manufacturing and trade (except
 nonmerchant wholesalers) for
 industries other than motor
 vehicles and equipment in trade 80.1 38.0 -.4
Net exports:(2)
 Exports of goods:
 U.S. exports of goods,
 international-transactions
 -accounts basis 795.9 790.2 769.4
 Excluding gold 790.3 783.5 762.0
 Imports of goods:
 U.S. imports of goods,
 international-transactions
 -accounts basis 1,275.4 1,259.7 1,244.2
 Excluding gold 1,269.0 1,252.6 1,237.5
 Net exports of goods -479.4 -469.5 -474.8
 Excluding gold -478.7 -469.1 -475.5

Government:
 State and local:
 Structures:
 Value of new construction
 put in place 170.1 171.0 172.8

 2001

 January February March(1)

Private fixed investment:
 Nonresidential structures:
 Buildings:
 Value of new nonresidential
 construction put in place 231.6 231.9 225.0
 Equipment and software:
 Manufacturers' shipments of
 complete aircraft 33.5 45.5 32.1

 Residential structures:
 Value of new residential
 construction put in place:
 1-unit structures 233.5 238.7 236.0
 2-unit-or-more 29.8 30.7 30.6

Change in private inventories,
 nonfarm:
 Change in inventories for
 manufacturing and trade (except
 nonmerchant wholesalers) for
 industries other than motor
 vehicles and equipment in trade 31.4 -10.0 .8
Net exports:(2)
 Exports of goods:
 U.S. exports of goods,
 international-transactions
 -accounts basis 774.9 782.9 776.7
 Excluding gold 769.2 776.1 769.6
 Imports of goods:
 U.S. imports of goods,
 international-transactions
 -accounts basis 1,248.8 1,183.2 1,213.3
 Excluding gold 1,242.6 1,177.2 1,206.2
 Net exports of goods -473.9 -400.2 -436.6
 Excluding gold -473.4 -401.0 -436.6

Government:
 State and local:
 Structures:
 Value of new construction
 put in place 175.2 172.2 171.3

(1.) Assumption.

(2.) Nonmonetary gold is included in balance-of-payments-basis
exports and imports but is not used directly in the estimation
of NIPA exports and imports.

BEA Estimates of Wages and Salaries for 2000

The annual change from 1999 to 2000 in the national income and product accounts (NIPA) estimate of wage and salary disbursements is about $75 billion less than the change in the U.S. total of the State estimates of wage and salary disbursements that appears elsewhere in this issue. As explained in the "Note on the Estimates of State Personal Income" on page 24, the State estimates incorporate newly available Bureau of Labor Statistics tabulations of wages and salaries of employees covered by unemployment insurance for 2000. These and other data will be incorporated into the NIPA estimates in the upcoming annual NIPA revision, which is scheduled for release July 27, 2001.

(1.) Quarterly estimates in the NIPA's are expressed at seasonally adjusted annual rates. Quarter-to-quarter dollar changes are the differences between the published estimates. Quarter-to-quarter percent changes are annualized and are calculated from unrounded data unless otherwise specified.

Real estimates are calculated using a chain-type Fisher formula with annual weights for all years and quarterly weights for all quarters; real estimates are expressed both as index numbers (1996=100) and as chained (1996) dollars. Price indexes (1996=100) are also calculated using a chain-type Fisher formula.

(2.) Gross domestic purchases is calculated as the sum of personal consumption expenditures, gross private domestic investment, and government consumption expenditures and gross investment; thus, gross domestic purchases includes imports of goods and services, which are subtracted in the calculation of GDP, and does not include exports of goods and services, which are added in the calculation of GDP.

(3.) In the NIPA's, consumer spending is shown as personal consumption expenditures, government spending is shown as government consumption expenditures and gross investment, and inventory investment is shown as change in private inventories.

(4.) The personal saving rate is measured as personal saving as a percentage of current-dollar disposable personal income. The first-quarter estimate of the national saving rate (which is measured as gross saving as a percentage of gross national product) will be released at the end of May with the "preliminary" estimate of first-quarter GDP.

(5.) Financial services include brokerage charges, investment counseling, bank service charges, trust services, safe deposit, services furnished without payment by financial intermediaries except life insurance carriers, and expense of handling life insurance and pension plans.

Other professional services includes medical laboratories, eye examinations, and all other professional medical services.

(6.) In the NIPA's an increase in the rate of Federal employee compensation is treated as an increase in the price of employee services purchased by the Federal Government.

(7.) Federal farm subsidy payments also affected rental income of persons, which increased $2.6 billion after decreasing $2.7 billion. Excluding subsidy payments to owners of leased farmland (nonoperator landlords), rental income increased $2.3 billion after increasing $0.4 billion.