The Bureau of Economic Analysis (BEA) is working on a multi-pronged action plan to improve its estimates of gross domestic product (GDP) by identifying and mitigating potential sources of “residual” seasonality. That’s when seasonal patterns remain in data even after they are adjusted for seasonal variations.
Each spring, BEA conducts an extensive review–receiving updated seasonally adjusted data from the agencies that supply us with data used in our calculation of GDP. Most of the data the feeds into GDP is seasonally adjusted by the source agency, not BEA. At the same time, BEA examines its own seasonal factors for those series that BEA seasonally adjusts itself. All that work takes place in preparation for BEA’s annual revision to GDP and its major components, which will be released on July 30.
As a result of this ongoing work, BEA is aware of the potential for residual seasonality in GDP and its components, and the agency is looking for ways to minimize this phenomenon.
• One of the areas we’re currently reviewing is possible residual seasonality in measures of federal government defense services spending. Initial research suggests that the first and fourth quarter growth rates are lower on average than those of the third and second quarters. BEA is developing methods for addressing what it has found.
• Time frame to implement: Improvement will take place with the release of second quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
• BEA also will begin adjusting certain inventory investment series that currently aren’t seasonally adjusted.
• Time frame to implement: Improvement will take place with the release of second-quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
• Also as part of this year’s seasonal adjustment review, BEA is planning to seasonally adjust a number of series from the Census Bureau’s quarterly services survey that now have sufficient time spans to which seasonal adjustment techniques can be applied. Currently, these series are smoothed using a four-quarter moving average to attempt to smooth out seasonal trends in the data. While BEA’s review had not identified residual seasonality in the PCE services estimates, applying statistical seasonal adjustment techniques to these indicators will improve the accuracy of the underlying trends in PCE estimates.
• Time frame to implement: Improvement will take place with the release of second quarter GDP on July 30. Period covered 2012, 2013, 2014, and forward.
• BEA will review all series entering the GDP calculations to identify, and where feasible, mitigate any residual seasonality within its existing seasonal adjustment methodologies.
• Time frame to implement: Review will take place with the release of second-quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
• Longer term–beyond July 30–BEA will continue looking at components of GDP to determine if there are opportunities to improve seasonal adjustment methodologies. Should BEA identify other areas of potential residual seasonality, BEA will develop methods to address these findings. If research suggests that residual seasonality originates with already seasonally adjusted source data, BEA will work alongside its source data agencies to determine the appropriate course of action.
Additional information will be available in an upcoming article in BEA’s Survey of Current Business that’s slated to be published in mid-June.
Written by: John H. Thompson
The Census Bureau, as well as the rest of the Department of Commerce, is an enthusiastic proponent of open government. Since the first census in 1790, a key part of our mission has been to collect and distribute data and statistics about American people, places and economy. Our data help governments, businesses and individuals make better-informed decisions, and we’re keen for it to provide value to as many people as possible.
As part of Sunshine Week 2015, we highlighted the ways we continue to embrace the principles of transparency, participation and collaboration. Census Bureau employees, other federal agencies and the public shared many great ideas and initiatives – from new digital tools that make our data useful to new audiences to webcasting our advisory committee meetings and updates about our plans for the 2020 Census.
Of course, a big topic in our discussion about open government was the Freedom of Information Act (FOIA). Celebrating its 50th birthday next year, FOIA gives individuals and organizations the right to access federal agencies’ records (with a few exceptions, such as some personnel information). Did you know that you can submit a FOIA request to any agency, asking for access to records on any topic?
To ask for materials from the Census Bureau under FOIA, you can submit a written request, or use FOIAonline or email firstname.lastname@example.org to submit a request electronically. The Census Bureau has a step-by-step FAQ to help guide you through the process. You can see the range of FOIA requests that the Census Bureau gets by generating a report in FOIAonline. Additionally, you can search for FOIA requests, appeals, and previously released records stored across multiple agencies, in a central repository on FOIAonline.
The public expects and deserves to have access to even more information and data, and the Census Bureau is always seeking ways to be even more accessible, and to involve the public in our data and decision-making processes. I encourage you to visit www.census.gov for a wealth of agency information, statistics and data tools – including our FOIA Library of frequently requested documents.
BEA’s estimates of GDP are seasonally adjusted to remove fluctuations that normally occur at about the same time and the same magnitude each year. Seasonal adjustment ensures that the remaining movements in GDP, or any other economic series, better reflect true patterns in economic activity. Examples of factors that may influence seasonal patterns include weather, holidays, and production schedules. (See “Why and how are seasonal adjustments made?“)
Much of the data used by BEA to estimate GDP are seasonally adjusted by the source data agencies. For example, BEA uses seasonally-adjusted inventory and retail sales data from the U.S. Census Bureau and seasonally-adjusted consumer price indexes from the U.S. Bureau of Labor Statistics. BEA does seasonally adjust some data itself, such as Treasury data used to measure federal government spending. There are also instances where BEA cannot apply seasonal adjustment statistical techniques to its source data because the time series is too short to adequately capture seasonal trends.
BEA and its source data agencies regularly review and update their seasonal adjustment procedures to account for changes in seasonal patterns that emerge over time. Despite regular reviews and updates, changes in seasonal patterns can sometimes lead to ‘residual seasonality’—that is, the manifestation of seasonal patterns in data that have already been seasonally adjusted. There are several reasons that residual seasonality might arise:
BEA is currently examining GDP components for residual seasonality, which may lead to improved seasonal adjustment methods. For example, BEA has recently recognized the possibility of residual seasonality in its measure of federal government defense services spending. Also, BEA is testing for seasonality in a number of not-seasonally-adjusted series from the Census Bureau’s quarterly services survey that now have sufficient time spans to which seasonal adjustment techniques can be applied. If necessary, improvements to the seasonal adjustment methods for these series will be introduced as part of the regular annual revision to the national income and product accounts, scheduled for release in July 2015.
Gaining a detailed picture of the role the United States plays in the global market place is made easier by the wealth of international investment statistics produced by the Bureau of Economic Analysis. So it’s critically important that we get the most accurate information possible from businesses, private funds, and others who fill out our BEA surveys.
To that end, BEA recently released some guidance on when private funds may need to fill out a BE-10 survey, which collects information on U.S. direct investment abroad. The guidance is in the form of several Frequently Asked Questions (FAQs).
The new FAQs answer questions such as:
Other resources for assisting the filing of the 2014 BE-10 survey can be found here.
The Bureau of Economic Analysis plans to launch two new statistics that will serve as tools to help businesses, economists, policymakers and the American public better analyze the performance of the U.S. economy. These tools will be available on July 30 and emerge from an annual BEA process where improvements and revisions to GDP data are implemented. BEA created these two new tools in response to demand from our customers.
Average of Gross Domestic Product (GDP) and Gross Domestic Income (GDI)
Final Sales to Private Domestic Purchasers
This new data tool is just one of the ways that BEA is innovating to better measure the 21st Century economy and provide business and households better tools for understanding that economy. Providing businesses and individuals with new data tools like these is a priority of the Commerce Department’s “Open for Business Agenda.”
Brent Moulton, Associate Director for National Economic Accounts of the Bureau of Economic Analysis (BEA), has been selected to receive the 2015 Julius Shiskin Memorial Award for Economic Statistics. The award recognizes unusually original and important contributions in the development of economic statistics or in the use of statistics in interpreting the economy.
Dr. Moulton is recognized for his leadership in implementing major innovations into the U.S. national accounts, international standards for national accounts, and expanded integration of U.S. statistical programs. He is also recognized for his work at the Bureau of Labor Statistics (BLS) in developing innovations that improved the reliability of the Consumer Price Index (CPI). Dr. Moulton is the 43nd recipient of the Award; he will be honored at events hosted by the three sponsors of the award: the Washington Statistical Society, the National Association for Business Economics, and the Business and Economics Section of the American Statistical Association.
At BEA, Dr. Moulton was responsible for the incorporation of innovations into the U.S. national accounts that have kept them up-to-date to the changing U.S. economy. In these and other areas, policymakers, business economists, and academics have applauded Dr. Moulton for providing significantly more accurate and relevant information for monetary policy, tax policy and projections, fiscal policy, and business planning. The innovations incorporated into the accounts included the following:
Dr. Moulton is recognized for his leadership in the developing improved international standards for national accounts. He was one of the initiators of the 2008 update of the System of National Accounts (SNA), the handbook for GDP measurement prepared by the United Nations, the International Monetary Fund, the Organization for Economic Cooperation and Development, the World Bank, and the European Union.
Written by: John H. Thompson
Right now, the U.S. Census Bureau is conducting a survey to gather user feedback on American Community Survey data products. The American Community Survey is an indispensable resource that provides data about who we are and how our population is changing. We want to ensure the American Community Survey program continues to produce relevant, timely and accessible data products that the public needs.
The American Community Survey provides vital information about the American population. It is the only source of quality information about the people in all of our nation’s communities, including information on age, children, veterans, income, employment, education and so on. Not surprisingly, governments, businesses, researchers and advocates extensively use American Community Survey data to make better decisions to make our country stronger.
Most of the statistics you see about the people in our communities either come directly from the American Community Survey or are derived in part from it. There is no substitute for the American Community Survey, and the Census Bureau is committed to making it as meaningful as possible to data users and the communities they serve.
If you’re among the many users of American Community Survey data, we want to hear from you. We’re looking for feedback on the content of data products and usage of geographic areas, the coinciding documentation that’s currently provided on our website, and data product access and dissemination.
To take the ACS Data Products Survey, please visit our website by May 29, 2015. It should take no longer than 15 minutes to complete.
For more information about the American Community Survey program, you can also sign up to receive email updates, become a member of the American Community Survey Data Users Online Community, or register to attend the second annual American Community Survey Data Users Conference on May 11-13, 2015.
The U.S. Bureau of Economic Analysis finds that early estimates of real Gross Domestic Product are reliable, with evidence indicating only minor improvements to accuracy from advance to second to third quarterly estimates, as measured by mean absolute revisions or standard deviations (see Fixler, Greenaway-McGrevey, and Grimm, “The Revisions to GDP, GDI, and Their Major Components,” Survey of Current Business, August 2014). BEA estimates GDP quarterly in three monthly vintages, with the “advance” estimate 30 days following the reference quarter, the “second” estimate 60 days following and the “third” estimate 90 days following. Annual revisions occur each year for a three-year period, with comprehensive revisions across the entire time series occurring in years ending in three and eight. BEA regularly tests the reliability of each successive vintage of GDP estimates.
BEA’s Alyssa Holdren (see Holdren, “Gross Domestic Product and Gross Domestic Income Revisions and Source Data,” Survey of Current Business, June 2014) illustrates that successive vintage estimates of real Gross Domestic Product contain increasing amounts of quality source data covering the components of GDP. More than three-fifths of the initial, or advance, estimate of GDP is based on trend projections or indirect indicators, and only two-fifths are based on direct indicators. With each successive quarterly vintage the portion of quality data increases, with slightly more than one-half of the second estimates and one-third of the third estimates are based on data rather than proxies.
With respect to the annual revisions, the three current annual vintages contain still greater amounts of increasingly high quality annual-frequency source data. Reflecting the better data, the correlations between the successive early vintage estimates and the latest estimates increase from 0.78 for the advance estimates to 0.96 for the third annual estimates, with reasonably smooth increments between successive vintages. This pattern indicates a gradually tightening relationship, with no apparent jumps with later vintages.
The relationship between the advance and the latest estimates may also be visualized in a scatter diagram.
The scatter portrays a reasonably tight relationship. This suggests that the early estimates, which contain much more judgmental inputs, are not particularly less reliable than the latest estimates, which contain all available source data and thus relatively little judgment. As such, the early estimates should be viewed as generally accurate and not substantively less reliable than later vintage estimates.
The various estimates reflect a balance between timeliness of early estimates to inform policy and business investment decisions, and the accuracy accrued with the incorporation of increasingly quality source data. The relationships between the earliest estimates and the latest suggest an appropriate balance, although continuing to improve the reliability of the earliest vintages remains a priority for BEA.
The U.S. monthly international trade deficit increased in March 2015 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $35.9 billion in February (revised) to $51.4 billion in March, as imports increased more than exports. The previously published February deficit was $35.4 billion. The goods deficit increased $14.9 billion from February to $70.6 billion in March. The services surplus decreased $0.6 billion from February to $19.2 billion in March.
Exports of goods and services increased $1.6 billion, or 0.9 percent, in March to $187.8 billion. Exports of goods increased $1.5 billion and exports of services increased $0.2 billion.
Imports of goods and services increased $17.1 billion, or 7.7 percent, in March to $239.2 billion. Imports of goods increased $16.4 billion and imports of services increased $0.8 billion.
Goods by geographic area (seasonally adjusted, Census basis)
For more information, read the full report.
The Bureau of Economic Analysis launched today a new data tool on its website that gives users a snapshot of statistics on trade and investment between the United States and another country by simply clicking on a world map.
These fast facts at your fingertips can include:
The country snapshots, or factsheets, also contain charts and can be printed or downloaded to a spreadsheet. The new data tool pulls statistics from BEA’s international data sets on exports, imports, direct investment, and the activities of multinational enterprises into a single easy-to-digest resource. Similar to the BEA’s BEARFACTS regional factsheets for state and regional economic data, the new international factsheets can be used to quickly get up to speed for a business presentation, a news story, or a school research project.
Users select a country from an interactive world map or a searchable menu of countries. The tool generates a country factsheet with graphs and tables showing the latest data on U.S. trade and investment with that country. A PDF of the factsheet is available for easy printing. The tool also provides data tables containing more detailed statistics that can be downloaded in Excel format.
To access the new international data tool, visit http://bea.gov/international/factsheet/.
Personal income increased less than 0.1 percent in March after rising 0.4 percent in February. Wages and salaries, the largest component of personal income, rose 0.2 percent in March after rising 0.3 percent in February.
Current-dollar disposable personal income (DPI), after-tax income, increased less than 0.1 percent in March after rising 0.5 percent in February.
Real DPI, income adjusted for taxes and inflation, decreased 0.2 percent in March after increasing 0.3 percent in February.
Real consumer spending (PCE), spending adjusted for price changes, increased 0.3 percent in March after decreasing less than 0.1 percent in February. Spending on durable goods increased 2.0 percent in March after decreasing 1.1 percent February.
PCE prices increased 0.2 percent in March, the same increase as in February. Excluding food and energy, PCE prices increased 0.1 percent in March, the same increase as in February.
Personal saving rate
Personal saving as a percent of DPI was 5.3 percent in March and 5.7 percent in February.
For more information, read the full report.
Real gross domestic product (GDP) increased 0.2 percent in the first quarter of 2015, according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2014, real GDP increased 2.2 per- cent. In the first quarter, the dollar strengthened against major currencies, imports and exports were delayed be- cause of labor disputes in key ports, energy prices declined, and several regions experienced severe weather.
First-quarter GDP highlights
The following contributed to the increase in real GDP:
These positive contributions to real GDP growth were largely offset by the following:
Personal income and personal saving
Real disposable personal income (DPI)—personal income adjusted for inflation and taxes—increased 6.2 percent in the first quarter, compared with 3.6 percent in the fourth quarter of 2014. Personal saving as a percentage of current-dollar DPI was 5.5 percent, compared with 4.6 percent.
Prices of goods and services bought by U.S. resi- dents decreased 1.5 percent in the first quarter, after decreasing 0.1 percent in the fourth quarter of 2014. The first-quarter decline was the largest since the first quarter of 2009.
Energy prices declined more than in the fourth quarter. Food prices also fell.
Excluding food and energy, prices increased 0.3 percent in the first quarter after increasing 0.7 percent in the fourth quarter.
For more information, read the full report.
Nondurable goods manufacturing was the leading contributor to U.S. economic growth in the fourth quarter of 2014. Both private goods- and services-producing sectors contributed to the increase, while the government sector decreased. Overall, 15 of 22 industry groups contributed to the 2.2 percent increase in real GDP.
For more information, read the full report.
When a disaster strikes, understanding the economic impact on the affected community is a key to developing a recovery plan. BEA’s regional input-output modeling, RIMS II, provides disaster recovery officials a tool to model the impact on an affected community.
For instance, if a hurricane forces the temporary closure of oil refineries, fisheries or ports in a region, the disruption could affect the overall regional economy. RIMS II provides local officials with a cost-effective way to estimate that impact on the overall regional economy.
RIMS II is already widely used in both the public and private sectors for estimating the economic impact of an event, construction project, or other change in a local economy. In the public sector, for example, state and local government officials use BEA’s regional modeling system to estimate the regional impacts of military base closings. State transportation departments use it to estimate the regional impacts of airport construction and expansion. In the private sector, business people, analysts and consultants use BEA’s regional model to estimate the regional impacts of a variety of projects, such as the development of shopping malls and sports stadiums.
To effectively use BEA’s regional modeling system, users must provide detailed information on the initial changes in output, earnings, or employment in each region and industry affected by a disaster. For instance, a disruption may lead to a lengthy layoff of 1,500 workers at a local port. The multipliers can then be used to estimate the total impact of the disaster on regional output, earnings and employment.
Earlier this year, BEA announced some changes to the regional input-output modeling system. The updated model will continue to produce regional “multipliers” that can be used in economic impact studies to estimate the total economic impact of a project on a region and will still be updated with new regional information on an annual basis. The main difference is the underlying national information used in the model will be updated on a less frequent basis. The important regional information used in the model will still be updated on an annual basis.
This is just one way BEA’s products support a key pillar of the Department of Commerce’s strategic plan. That is – ensuring “communities and businesses have the necessary information, products and services to prepare for and prosper in a changing environment.”
The Economics and Statistics Administration’s family of statistical agencies – the Bureau of Economic Analysis (BEA) and U.S. Census Bureau – are announcing an important new initiative that will lead to an acceleration of key trade data as well as improved accuracy of the advance estimate of Gross Domestic Product (GDP). GDP is widely considered the most important measure of the U.S. economy. Additionally, American businesses, policymakers, and the public have made clear – and we have listened – that there is an enormous appetite for timelier, high quality trade data to improve decisions and better support our interconnected global economy.
The Census Bureau’s new advanced trade release will arrive approximately one week ahead of the monthly report “U.S. International Trade in Goods and Services,” also known as the FT900 and will provide more timely statistics regarding the export and import of goods and supplies.
The first release is set for July 30, 2015, at 8:30 a.m. and will feature advance statistics for June 2015. The new advance trade release will focus on goods and will list them by “end-use” category, such as consumer goods, capital goods or industrial supplies. It will include both seasonally adjusted and unadjusted data, and will be available on Census’s website: www.census.gov/trade.
This “flash” estimate of trade in goods will provide BEA with more accurate data for their Advance Estimate of GDP and will reduce GDP revisions over time.
I am excited the Commerce Department has committed to making our data even more useful to our customers in the public and private sectors, and this initiative – and the collaboration of ESA’s premier statistical agencies – is one of many ways we are making good on our promise to transform the Department’s data capabilities, a key pillar in our Open for Business Agenda.
For more information on the advance trade release call the Michael C. Cook, Sr. at 301-763-4083 at Census Bureau; for information about its potential impact on GDP contact Jeannine Aversa 202.606.2649.
The U.S. monthly international trade deficit decreased in February 2015 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit decreased from $42.7 billion in January (revised) to $35.4 billion in February, as imports decreased more than exports. The previously published January deficit was $41.8 billion. The goods deficit decreased $7.4 billion from January to $55.2 billion in February. The services surplus decreased $0.1 billion from January to $19.7 billion in February.
Exports of goods and services decreased $3.0 billion, or 1.6 percent, in February to $186.2 billion. Exports of goods decreased $2.9 billion and exports of services decreased $0.1 billion.
Imports of goods and services decreased $10.2 billion, or 4.4 percent, in February to $221.7 billion. Imports of goods decreased $10.3 billion while imports of services increased less than $0.1 billion.
Goods by geographic area (seasonally adjusted, Census basis)
For more information, read the full report.
The Census Bureau’s plans to produce an advance monthly report on international trade in goods will allow the Bureau of Economic Analysis to incorporate three months of official trade data into its first estimate of quarterly Gross Domestic Product, helping to improve the accuracy of this major economic measure.
BEA Director Brian Moyer praised the move as an example of cross-agency collaboration.
“Accelerating trade data so they are included in our initial estimates of Gross Domestic Product represents a significant improvement in our ability to measure the U.S. economy accurately,” said BEA Director Moyer. “The work between BEA and the Census Bureau to make this happen underscores how interagency collaboration and innovation result in a payoff for taxpayers and our data customers.”
The first GDP report incorporating Census’ “advance” trade data will be released Thursday, July 30 with BEA’s advance estimate of second-quarter GDP.
“We expect Census’ advance trade data report to improve the accuracy of our initial, or advance, estimates of quarterly Gross Domestic Product and reduce revisions by filling in a data gap with actual trade data for the third month of the quarter,” said BEA Associate Director for National Economic Accounts Brent Moulton. “This improvement will make our advance GDP estimates more useful to businesses, policymakers and the American public. In calculating the advance estimate, BEA does have actual trade data for two months of a quarter but is missing data for the third month and has to rely on assumptions to fill that gap. Those assumptions have been an important source of revisions to our GDP estimates. The inclusion of actual trade data for the third month of the quarter is the latest effort by the Commerce Department to produce the best possible measure of the U.S. economy.”
Written by: John H. Thompson
Today, April 1, marks Census Day for the Savannah, Georgia and Maricopa County, Arizona areas, sites where two important test censuses are underway.
During the decennial census every 10 years, Census Day provides the reference day for measuring the population. We’re using the same reference day for the 2015 Census Tests in the Savannah and Maricopa County areas.
If you live in one of our 2015 test sites, I encourage you to learn more about the tests by visiting www.census.gov/2015censustests. Your participation is appreciated and will help us make critical design decisions that will shape how the rest of America participates in the next census in 2020. Mandated by the Constitution, the decennial census counts the residents of the United States once a decade. It determines the number of seats each state has in the U.S House of Representatives, and how over $400 billion in federal funds are distributed to state, tribal, and local communities each year. The census is a huge undertaking, and the cost has increased significantly each decade. Our design changes will help us hold the cost down in 2020.
We are conducting these tests five years before the actual Census Day on April 1, 2020, to learn how to leverage new technologies and apply innovative methods to census operations in a real-world census environment. Our goal is a more efficient and cost-effective census that continues to produce high quality data.
We are testing different things at each site. In the 20 counties in Georgia and South Carolina that are part of the Savannah area test, we are exploring new outreach and promotion strategies to inform the public about the census. We are also learning the best ways to allow residents to complete the questionnaire quickly and securely over the Internet.
In Maricopa County, we are evaluating new technologies for collecting and processing responses to the census. We also will be testing a new field management structure to see if it improves the efficiency and effectiveness of operations to interview households that don’t complete their census test questionnaire during the self-response phase.
The timing of these tests is critical as we must make important design decisions later this year. By 2018, we must lock in operating systems and methods for the 2020 Census. These tests, and those planned for 2016 and 2017, will give us the information we need to build our systems and develop the processes we will use to implement the largest peacetime operation conducted in the United States.
The 2020 Census will be unlike any other in history thanks to the tests we are conducting now. The new methods that we are researching will result in savings estimated to be approximately $5 billion from the projected cost of using methods from the 2010 Census.
The U.S. net international investment position was -$6,915.3 billion (preliminary) at the end of 2014 as the value of U.S. liabilities exceeded the value of U.S. assets. At the end of 2013, the net position was -$5,383.0 billion.
For more, see the full report.
The U.S. net international investment position was -$6,915.3 billion (preliminary) at the end of the fourth quarter of 2014 as the value of U.S. liabilities exceeded the value of U.S. assets. At the end of the third quarter, the net position was -$6,129.4 billion (revised).
For more, see the full report.
The Economics and Statistics Administration (ESA) plays three key roles within the Department of Commerce (DOC). ESA provides timely economic analysis, disseminates national economic indicators, and oversees the U.S. Census Bureau (Census) and the Bureau of Economic Analysis (BEA). In this latter role, ESA works closely with the leadership at BEA and Census on high priority management, budget, employment, and risk management issues, integrating the work of these agencies with the priorities and requirements of the Department of Commerce and other government entities.