Archive for the 'GDP' Category



Coming Soon: More Timely Data on the Health of States’ Economies

BEA’s annual gross domestic product by state report provides a crucial look into the health of states’ economies. Soon businesses, consumers, and policymakers will get a sneak peak at a more timely and frequent version of the report.

On August 20, we will release a quarterly look at state economic performance broken out by industry for the years 2005-2013. Like its annual cousin, this prototype quarterly GDP by state report will be conceptually consistent with BEA’s national data on economic output, allowing for comparisons across geographies and time.

In addition to the economic activity of each state, these quarterly statistics will provide more information on how states’ industries are faring.  For instance, according to our most recent annual report on state economic growth, released on June 11, non-durable goods manufacturing contributed 2.65 percentage points to overall growth in Louisiana. Using quarterly data, one can investigate whether this increase in activity was sustained over all four quarters.

We are releasing these statistics for review and comment by data users.  After getting their feedback, the goal is to start producing quarterly GDP by state statistics on a regular basis in 2015. Quarterly GDP by state statistics will provide a first read on state-level activity for a quarter within five to six months after the close of that quarter.

Quarterly GDP by state statistics can also build a clearer picture of the overall U.S. economy. By providing an earlier indication of what states are experiencing in terms of economic activity, these statistics can provide more insight into the geographic pattern of national economic performance.  

For example, using quarterly GDP by state statistics, one can investigate whether key industries in some states were showing declines even before the national downturn that began in late 2007.

These new estimates are just one way that BEA is innovating to better measure the 21st Century economy. On August 7, we released prototype estimates of consumer spending by state. Earlier this year, we introduced real (inflation-adjusted) estimates of personal income for states and metropolitan areas and new quarterly statistics on GDP broken out by industry. Providing businesses and individuals with new data tools like these is a priority of the Commerce Department’s “Open for Business Agenda.”

GDP Turns Up in Second Quarter

Real gross domestic product (GDP) increased 4.0 percent in the second quarter of 2014, according to the “advance” estimate released today by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent (revised).

Second-quarter highlightsGDP_7_30_14
The upturn in real GDP growth was mainly driven by upturns in exports and in private nonfarm inventory investment as well as an acceleration in consumer spending, notably for durable goods.

In addition, state and local government spending and residential investment turned up, and business investment accelerated.

In contrast to these contributions, imports (a subtraction in the calculation of GDP) were higher in the second quarter than in the first quarter.

Annual revision
BEA also released its 2014 annual revision of the national income and products accounts, which updated most components from the first quarter of 2011 to the first quarter of 2014 based on newly available revised source data. In addition, GDP and selected components were revised back to the first quarter of 1999 to incorporate revisions from the international transactions accounts. See the Technical Note.

For 2011–2013, real GDP increased at average annual rate of 2.0 percent, compared with 2.2 percent in the previously published estimates. For the first quarter of 2011 through the first quarter of 2014, the revisions did not change the direction of GDP growth for any quarter.

PricesGDP_Prices_7_30_14
Prices of goods and services purchased by U.S. residents—that is, prices of gross domestic purchases—increased 1.9 percent in the second quarter after increasing 1.4 percent in the first quarter.

Food prices increased 4.2 percent after increasing 1.3 percent, and energy prices increased 5.1 percent after increasing 2.8 percent.

Excluding food and energy, gross domestic purchases prices increased 1.7 percent in the second
quarter, compared with 1.3 percent in the first quarter.

Read the full report.

New BEA Data Provide Insights on How Harsh Winter Impacted Industries in First Quarter

How much did the harsh winter weather affect the U.S. economy in the first quarter of this year?

We know that the economy, as measured by gross domestic product (GDP), contracted at an annual rate of 2.9 percent over January, February and March, the first quarterly decline in three years. But how were different industries affected and was weather a factor? New data released today by the U.S. Bureau of Economic Analysis provide fresh insights on that front.

The economy’s downturn in the first quarter was widespread, with 19 of 22 major industry groups contributing to the drop in U.S. economic activity, the new BEA data show. Some of the leading contributors to the downturn included industries that were impacted by the unusually harsh winter weather that hit most of the United States, including “agriculture, forestry, fishing, and hunting.”
Weather1_7_25_14Severe weather conditions can have both positive and negative (although mostly negative) effects on the Nation’s economic performance. For some industries this is intuitive, like “agriculture, forestry, fishing, and hunting” and “construction;” for other industries, like “mining,” and “nondurable-goods manufacturing,” the link may not be as intuitive.

Weather2_7_25_14Real value added —a measure of an industry’s contribution to GDP—for agriculture, forestry, fishing, and hunting declined 31 percent in the first quarter, reflecting a drop in the production of farm-type products, including livestock and dairy.

Construction fell almost 9 percent, reflecting a notable decline in nonresidential construction activity that began in January and continued through March; unusually cold and wet weather hampered construction activity.

Perhaps somewhat surprising, the utility industry also contributed to the decline in GDP in the first quarter. While demand for additional utilities, for example electricity generation, was evident with the severe winter weather, a surge in the costs of the inputs used by the utilities industry—things like energy, materials, and purchased services used in the production process—caused real value added to drop over 16 percent in the first quarter.

Real value added for mining fell 5.6 percent, driven in part by the weather. As with utilities, inputs played a critical role. Part of the increase in input costs in mining reflected increased demand for natural gas that was used to prevent ‘wellhead freeze-offs,’ of which the likelihood increases as temperatures fall.

As noted, the abnormally harsh weather did not have a negative impact on all industries. For example, consumer spending data released with the “third” GDP estimate on June 25th revealed that real household consumption of fuel oils increased in the first quarter, which is reflected in the growth for nondurable goods manufacturing, which includes the petroleum refining industry (nondurable goods manufacturing was up 15 percent).

In the first quarter of 2014 the weather—given the unusually harsh conditions—had a more significant impact than normal on U.S. economic activity. For some industries, the weather linkages are more apparent than in others. Yet even in these industries, it is not possible to explicitly identify impacts on the U.S. economy and industry performance from the weather. Still, many of the examples above illustrate the important features that the GDP by industry framework provides, enabling complete industry analysis on the sources of U.S. economic activity, including supply chain analysis.