Abstract: The National Income and Product Accounts (NIPAs) produced by the U.S. Bureau of Economic Analysis (BEA) provide key measures of U.S. economic activity, including gross domestic product (GDP) and gross domestic income (GDI). Although conceptually equivalent, GDP and GDI often diverge due to differences in source data and revision timing. This study focuses on corporate profits, a small but volatile component of GDI that is frequently revised, especially during the BEA’s annual (A1) and benchmark (C1) revisions. I examine how revisions to corporate profits influence GDI revisions and whether they can improve real-time estimates of GDI. First, I document the size and timing of corporate profit revisions, which are consistently larger than those of other GDI components. Second, I find that while corporate profits make up only about 6% of GDI, they account for almost twice of its revisions. Third, regression analysis shows that corporate profit revisions, especially from the A1 vintage, help predict final GDI more effectively than earlier estimates. Lastly, I compare GDI, GDP, and corporate profit vintages, finding that A1 is the most informative for forecasting final GDI. These results highlight the outsized role of corporate profits in driving GDI revisions and the value of tracking revision patterns over time. Understanding these dynamics can improve real-time forecasting and help bridge gaps between GDP and GDI, especially during periods of economic uncertainty.

Keywords: GDP, GDI, Corporate Profits, Data Revisions, Forecasting, Real-Time Data.