Abstract: The National Income and Product Accounts (NIPAs) of the U.S. Bureau of Economic Analysis (BEA) are essential for providing timely and comprehensive assessments of the U.S. economy, supporting informed decision-making for policymakers and private sector stakeholders. Among the key measures, gross domestic product (GDP) and gross domestic income (GDI) offer complementary perspectives on economic output. Despite their theoretical equivalence, GDP and GDI estimates often diverge due to differences in underlying source data and release timelines. Corporate profits, a key component of GDI, are particularly volatile and systematically revised upward during BEA’s benchmark revisions, often impacting perceptions of economic health and stock market forecasts. This study investigates whether trends in corporate profit revisions can improve the real-time accuracy of GDI estimates and contribute to a better understanding of economic cycles. First, I analyze BEA’s historical revisions to corporate profits to quantify their magnitude and frequency, identifying systematic trends across different vintage timelines. Second, I examine the contribution of corporate profit revisions to overall GDI revisions. Third, I assess the predictive power of corporate profit revisions for final GDI estimates, evaluating its performance under various vintages. Finally, I compare corporate profits to other GDI components, identifying which variables most effectively predict GDI revisions. Preliminary findings suggest that while corporate profits account for approximately 6\% of the size of GDI, their revisions are a significant driver of overall GDI revisions, with their contribution being approximately 30\%. Additionally, the relationship between corporate profit revisions and GDI appears sensitive to economic cycles, with larger revisions observed during periods of heightened economic volatility. Moreover, understanding the role of corporate profit revisions in shaping economic indicators offers new opportunities to refine forecasting models, ultimately improving real-time assessments of economic performance. This study contributes to the broader literature on economic measurement and forecasting by highlighting the critical role of corporate profits in bridging the gap between GDP and GDI, especially in periods of elevated divergence.

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