Posts Tagged 'Personal Consumption Expenditures'

New BEA Data Provide Entrepreneurs with a Fortune 500 Research Department

Is consumer spending growing faster in North Dakota or North Carolina? How do consumers in different regions respond to economic downturns? Which state has the fastest growing consumer market for motor vehicles?

Some Fortune 500 companies have research departments to help answer these questions, but new BEA data on consumer spending broken out by state – released in August – provide startups and entrepreneurs with crucial insight into consumer behavior at the state level. In December 2015, we are planning to release a fresh batch of consumer spending by state statistics that will cover the year 2014 as well as some earlier years.

The prototype Personal Consumption Expenditure by state statistics are designed to be used in conjunction with other macroeconomic and regional data we produce, like statistics on Gross Domestic Product by State and State Personal Income.  This suite of statistics can offer entrepreneurs a better understanding of what’s driving or restraining economic activity at the state level, and thus inform their decisions about things like investing, financing, locating and hiring.

The Bureau of Economic Analysis’ experimental consumer spending by state statistics were released on Aug. 7 and covered the years from 1997 to 2012. So the fresh batch of statistics that will be out next year will be more up to date.

The state data on consumer spending use the same product definitions as our national statistics on consumer spending, making them consistent. Given the limited availability of source data at the regional level, the new consumer spending by state statistics do not provide the same level of category detail that BEA currently makes available at the national level.

The new statistics also use the same residency concepts that we use in our state income data, allowing entrepreneurs and other users to compare people’s income and spending in each state.

These new estimates are just one way that BEA is innovating to better measure the 21st Century economy. In April, we introduced real (inflation-adjusted) estimates of personal income for states and metropolitan areas as well as new quarterly statistics on GDP broken out by industry. On August 20, we released prototype estimates of quarterly GDP by state, which also breaks out GDP by Industry. Providing businesses and individuals with new data tools like these is a priority of the Commerce Department’s “Open for Business Agenda.”

Personal Consumption Expenditures by State Prototype Estimates for 1997-2012

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  • Prototype estimates of personal consumption expenditures (PCE) for states for 1997-2012 provide a new tool for state-level analysis of consumer activity and household economic well-being.
  • The PCE-by-state estimates are released for 16 expenditure categories that correspond to the national level expenditure categories published by BEA. There are eight categories of goods, seven categories of services, and the net expenditures of nonprofit institutions serving households.
  • Per capita PCE in 2012 ranged from a high of $59,423 in the District of Columbia to a low of $27,406 in Mississippi.
  • Between 2011 and 2012 North Dakota had the fastest growth in per capita PCE between at 9.2% and the fastest growth in total PCE at 11.5%.
  • These prototype estimates are released for data users’ evaluations and comments. Provided that user evaluations are positive, BEA plans to release official annual statistics in 2015.

Read the full report.

Coming Soon: Real Personal Income Statistics for States and Metropolitan Areas

The Bureau of Economic Analysis will soon release real personal income statistics using regional price indexes to adjust BEA’s personal income data for differences in the cost of living across states and metro areas. These new statistics will inform decisions by businesses and households alike – from deciding where to move for a new job or locating a new company to helping economic development offices shape regional marketing plans and comparing economic performances across regions.

Across the U.S., there are differences in the cost of everything from medical care to housing. In some states, such as Hawaii and New York, goods and services cost more. In others, such as South Dakota and Mississippi, they cost less. Just as adjusting U.S. economic growth for inflation (real GDP) is critical for comparing the high inflation years of the early 1980s to the low inflation years of the late 1990s, adjusting state personal incomes (real state personal income) for differences in the cost of living across states is important in comparing incomes, and the purchasing power of that income across states.

BEA will provide comprehensive data on regional differences in real incomes, on April 24, when it releases statistics for 50 states and for 381 metro areas. The report will cover the period 2008 through 2012.

Economists call indexes that compare the level of prices of goods and services across geographic areas purchasing power parity indexes. BEA has worked with the Bureau of Labor Statistics, the Census Bureau, and other experts in price measurement to develop its new regional price parities. These regional price parities, which measure differences in the level of prices across states and metro areas, are used in combination with BEA’s national Personal Consumption Expenditures (PCE) price index, which measures the changes in prices over time, (or inflation), to compare personal incomes across regions and over time.

Last year, BEA released prototype statistics of this kind. This year, for the first time, BEA will start releasing annual reports on a regular basis.