Archive for July, 2012



Quarterly GDP by Industry Data Improves Understanding of the Economy

In 2009, annual gross domestic product (GDP) for durable goods manufacturing showed a double-digit decline. The industry was the leading annual contributor to the bottoming out of the U.S. economy for that year. But looking at the results through a new experimental quarterly data series reveals a more nuanced and complete picture of what was happening in durable goods manufacturing. It shows that the decline in 2009 largely came from big drops in the fourth quarter of 2008 and the first quarter of 2009. After that durable goods actually increased for seven straight quarters.

This is an example of how BEA’s experimental quarterly GDP by industry statistics can provide a more detailed and precise view of how various industries are contributing to overall economic activity in the country, particularly around turning points. The recent recession and recovery illustrated the need for data that track how industries respond quarter to quarter, rather than year to year, to recessions and to various stimulus programs and other factors during a recovery.

While annual statistics on GDP by industry can be used to describe the leading contributors to business cycle dynamics over a full recession and recovery period, they are less useful in providing a picture of the dynamic U.S. economy as it is evolving. Annual data aren’t sufficient when trying to fully analyze the response of industries to changes in economic conditions and public policy, and they aren’t sufficient for gauging the economic impact and effectiveness of specific programs.

Quarterly data are not only important for improving our long-term understanding of the national economy, but also for more quickly assessing, monitoring, and adjusting decisions as the economy evolves. These statistics supplement other timely quarterly data—such as employment, wages and salaries, consumer spending, business investment, industrial production, and price statistics—allowing for a more complete analysis of business cycle dynamics and the sources of U.S. economic growth. Quarterly GDP by industry statistics also enhance the existing quarterly national income and product accounts statistics by providing a comprehensive accounting of consumer spending, investment, international trade, and industry performance on a quarterly basis.

BEA’s recently issued prototype of quarterly GDP by industry statistics updated an earlier prototype of estimates for 2007–2009 to include data for 2010–2011. It also presented quarterly estimates for gross output (that is, sales) for the first time. Adding a comprehensive set of statistics on quarterly gross output provides analysts with important information on industry-level performance. For example, coming out of the recession in 2009, GDP for the manufacturing sector grew even faster than total output for the manufacturing industry. That was a sign that productivity at factories had increased over the same period. Gross output also provides an industry breakdown of total sales, regardless of whether or not these sales are part of that industry’s contribution to GDP.

BEA plans to release one more set of prototype quarterly estimates as part of its annual revision of the industry accounts and to begin regularly producing quarterly GDP by industry statistics in 2014. Quarterly GDP by industry statistics would be available within 30 days of BEA’s third release of quarterly GDP. The quarterly data will provide industry by industry detail. As the quality of these statistics improves, BEA plans to expand the industry detail from the current 22 industries to the 65 industries now shown in the published annual statistics.

While progress continues on developing the quarterly GDP by industry statistics, more work remains before they are ready for regular production. In the meantime, BEA welcomes comments on the proposal. They can be emailed to IndustryEconomicAccounts@bea.gov. You can address comments to Carol Moylan, Associate Director for Industry Economic Accounts.

If You Respond to BEA’s International Surveys, Please Read This!

New changes in the method of informing businesses about requirements for submitting Bureau of Economic Analysis (BEA) surveys will increase the efficiency of the process and reduce paperwork for both survey respondents and BEA. The new procedures involve the collection of data through BEA’s surveys of direct investment and international trade in services.

In the past, each time BEA made a change to the reporting requirements for a survey, it was also required to change the federal regulations regarding that survey. This required public notification and a period to receive comments—known as a rulemaking—before the change could go into effect. For instance, a rulemaking was required to change the reporting threshold of a survey or to add or delete certain items from the survey. Under the new procedures, BEA will directly notify survey respondents about any future changes to reporting requirements, streamlining what at times had been a cumbersome process.

For its mandatory annual and quarterly surveys, BEA will publish a notice with specific reporting requirements—including who is required to respond to the survey, the manner of reporting, identification of applicable report forms, and the time and place of filing reports—in the Federal Register. We will also directly notify survey respondents by mail that they are required to file.

BEA published its plans to make this change in the Federal Register and gave the public a chance to comment on it. The final rule establishing this new procedure can be found here.

The new rule is NOT retroactive. It does not apply to any surveys that were approved before the rule establishing the new procedure was finalized. Direct investment and international trade in services surveys that BEA is currently conducting—the 2011 BE–11, 2011 BE–15, 2012 BE–12, 2012 BE–29, 2012 BE–120, and all 2012 quarterly surveys—will continue to operate under the regulations established under the most recent relevant rulemaking action prior to April 24, 2012.

May Trade Gap is $48.7 Billion

The U.S. monthly international trade deficit decreased in May, according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit decreased from $50.6 billion (revised) in April to $48.7 billion in May, as imports decreased and exports increased. The previously published April deficit was $50.1 billion. The goods deficit decreased $1.6 billion from April to $63.5 billion in May, and the services surplus increased $0.3 billion to $14.8 billion.

Exports of goods and services increased $0.4 billion in May to $183.1 billion, mostly reflecting an increase in exports of services. Exports of goods also increased.

The increase in exports of goods was more than accounted for by increases in foods, feeds, and beverages and capital goods. A decrease in industrial supplies and materials was partly offsetting.

The increase in exports of services was mostly accounted for by increases in other private services, which includes items such as business, professional, and technical services, insurance services, financial services, and passenger fares. Changes in the other categories of services exports were small.

Imports of goods and services decreased $1.6 billion in May to $231.8 billion, reflecting a decrease in imports of goods. Imports of services increased.

The decrease in imports of goods was more than accounted for by a decrease in industrial supplies and materials. An increase in capital goods was partly offsetting.

The increase in imports of services was more than accounted for by an increase in other private services. A decrease in passenger fares was partly offsetting. Changes in the other categories of services imports were small.

Goods by geographic area (not seasonally adjusted)
The goods deficit with Canada decreased from $3.3 billion in April to $2.2 billion in May. Exports increased $1.2 billion to $25.6 billion, while imports increased $0.1 billion to $27.8 billion.

The goods deficit with China increased from $24.6 billion in April to $26.0 billion in May. Exports increased $0.4 billion to $8.9 billion, while imports increased $1.9 billion to $34.9 billion.

The goods deficit with Mexico increased from $5.4 billion in April to $6.3 billion in May. Exports increased $1.2 billion to $18.5 billion, while imports increased $2.1 billion to $24.9 billion.

To learn more about U.S. international trade in goods and services, read the full report.