Archive for April, 2012

Meet BEA’s Director—Steve Landefeld

BEA Director Steve Landefeld
Steve Landefeld has served as Director of the Bureau of Economic Analysis since 1995. Before he took over as Director, Dr. Landefeld served in other capacities at BEA including Deputy Director and Associate Director for International Economics. While at BEA, Dr. Landefeld has led a number of pioneering statistical and management initiatives that have been recognized nationally and internationally. Prior to coming to BEA, he served as Chief of Staff for the White House’s Council of Economic Advisers.

I enjoy being a part of an agency that produces the data that play such an important role in helping inform our country’s economic policy. Decisionmakers in both the private and public sectors rely on insights into the functioning of the economy provided by BEA. We produce some of the world’s most important and closely watched economic statistics.

One of our biggest challenges is keeping pace with a constantly changing economy.  As commerce becomes more global and complex, it’s vital that we improve our current measurement systems and introduce new ones to ensure that we provide a clear picture of what is happening economically in America.  Over the years, BEA has implemented many innovations, but we know we must continue to come up with new measures to better understand business cycles, the sources of income growth, and the sustainability of trends.

One of the things I’m very interested in doing is expanding our measurements to better describe how the economy relates to the experiences of everyday people.  For example, we are currently working on a health care project that will more accurately measure spending on health care.  We’re also proposing a new suite of measures that will include distribution of income, spending, debt, saving, and wealth.  Measures of discretionary income on a national basis and inflation-adjusted measures of state personal income that reflect cost-of-living differences across states are part of that initiative.

We believe this will help the public relate economic data to their personal experiences.  That will keep the data we produce at BEA relevant to the American people and help us continue our mission of promoting a better understanding of the economy with the timeliest, most relevant, and accurate economic data in an objective and cost-effective manner.

February 2012 Trade Gap is $46.0 Billion

The U.S. monthly international trade deficit decreased in February 2012, according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit decreased from $52.5 billion (revised) in January to $46.0 billion in February, as imports decreased and exports increased. The previously published January deficit was $52.6 billion. The goods deficit decreased $6.0 billion from January to $61.4 billion in February, and the services surplus increased $0.5 billion to $15.4 billion.

Exports of goods and services increased $0.2 billion in February to $181.2 billion, reflecting an increase in exports of services. Exports of goods decreased.

  • The decrease in exports of goods was more than accounted for by decreases in automotive vehicles, parts, and engines and foods, feeds, and beverages. Increases in other goods and consumer goods were partly offsetting.
  • The increase in exports of services was mostly accounted for by increases in travel, other private services (which includes items such as business, professional, and technical services, insurance services, and financial services), and royalties and license fees.

Imports of goods and services decreased $6.3 billion in February to $227.2 billion, reflecting a decrease in imports of goods. Imports of services increased.

  • The decrease in imports of goods was mostly accounted for by decreases in consumer goods, industrial supplies and materials, and automotive vehicles, parts, and engines.
  • The increase in imports of services was more than accounted for by increases in travel, other private services, and passenger fares. A decrease in other transportation (which includes freight and port services) was partly offsetting.

Goods by geographic area (not seasonally adjusted)

  • The goods deficit with Canada decreased from $4.9 billion in January to $2.8 billion in February. Exports increased $1.6 billion to $23.5 billion, while imports decreased $0.5 billion to $26.3 billion.
  • The goods deficit with China decreased from $26.0 billion in January to $19.4 billion in February. Exports increased $0.4 billion to $8.8 billion, while imports decreased $6.3 billion to $28.1 billion.
  • The goods deficit with the European Union decreased from $8.5 billion in January to $5.9 billion in February. Exports increased $1.4 billion to $22.5 billion, while imports decreased $1.2 billion to $28.4 billion.

GDP and the National Accounts: One of the Great Inventions of the 20th Century

BEA Director Steve Landefeld

Imagine you’re trying to find your way through a thick forest. It’s a difficult task. You have nothing to help you navigate—no compass, no GPS, and no communications device to use to contact someone for help. In fact, in your wandering, you’ve lost your bearings so completely that you’re not even sure where you’ve been, let alone where you’re going. 

Now imagine you’ve been given an overhead view of the forest that shows you where you currently are, where you’ve traveled, and which direction you should head. In essence, that’s what the U.S. Bureau of Economic Analysis (BEA) does for everyone trying to figure out what course to steer through the U.S. economy. The economic statistics produced by the Bureau allow policymakers, businesses, and households to see where the economy has been and where it might be headed, so all can make better informed decisions on what course of action they should take.

Beginning today, we will feature some of these statistics and give you some insight into what they mean. Welcome to the first of BEA’s blog posts. We hope readers will find these posts a reliable source of easy-to-understand information about the U.S. economy. We also hope readers will gain interesting perspectives from some of the statistics that will be featured.

Probably the most followed number that BEA produces is gross domestic product (GDP). GDP is the value of all goods and services produced in the United States. Its development began in the mid-1930s when our elected leaders were trying to figure out how to guide the nation out of the depths of the Great Depression. Their efforts were seriously hampered because they simply did not know what was going on in the economy. The absence of reliable data about the economy made it difficult to develop an action plan. It was like being lost in a forest.

So a predecessor agency to BEA in the Commerce Department enlisted economist Simon Kuznets (who would eventually win a Nobel Prize for his efforts) to develop the first set of national economic accounts, which were presented in a report to Congress in 1934. By 1942, the first annual estimates of gross national product were introduced to complement the national income data and facilitate planning for World War II. 

In their textbook on economics, Paul Samuelson and William Nordhaus noted that “while the GDP and the rest of the national income accounts may seem to be arcane concepts, they are truly among the great inventions of the twentieth century.” 

Today, GDP and the national accounts have become a mainstay for economic analysis. In 2000, GDP was recognized as one of the great inventions of the 20th century. By providing a steady stream of useful economic data, the GDP accounts have played a significant role in the country’s economic well-being. 

“Much like a satellite in space can survey the weather across an entire continent, so can the GDP give an overall picture of the state of the economy,” Samuelson and Nordhaus observed in their textbook. “It enables the President, Congress, and the Federal Reserve to judge whether the economy is contracting or expanding, whether the economy needs a boost or should be reined in a bit, and whether a severe recession or inflation threatens.”

Of course the economy has changed quite a bit in the last 75 years, and the GDP accounts have changed along with it. New innovations and methodologies have continually been incorporated to make the accounts as accurate and relevant today as they have been since their creation.

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