Archive for July, 2013

Want to Learn More About U.S. Trade Statistics? Check out BEA’s and Census’ July 25 Webinar

Do you want to have a deeper understanding of how monthly trade statistics are compiled and how trade between the United States and other countries is measured? Then join the U.S. Bureau of Economic Analysis (BEA) and the U.S. Census Bureau for a July 25 webinar deciphering the U.S. international trade in goods and services report. The webinar will start at 1 p.m. EDT.

The Commerce Department’s BEA and Census Bureau produce the monthly trade report. During the webinar, representatives from both statistical agencies will walk you through all the key pieces of this important report. The monthly trade report is the official source of comprehensive data on imports and exports of goods and services. These trade statistics provide vital information for policymakers, businesses, and anyone interested in understanding the performance of the U.S. economy, especially in a global context. Trade is also a key component of U.S. gross domestic product, or GDP.

Here’s what you need to do to participate in the free webinar:

  1. Approximately 15 minutes prior to the start time, go to the registration page.
  2. Click on the log-in information and dial into the webinar.

This webinar is the first in the Census Bureau’s 2013 Economic Indicator Webinar Series.  Each of the 13 webinars in this series will provide an indepth description of how the critical economic indicator data are collected and how you can access and use these statistics. Other webinar topics include construction, housing, and retail trade. The complete schedule is available on the Census Bureau Web site.

Want to Build Apps Using BEA Economic Data? BEA Launches API

Developers, are you looking for a way to bring some of the most closely watched economic data into your next app? You can now build apps using BEA economic statistics, thanks to BEA’s new application programming interface (API). The API provides direct access to gross domestic product (GDP) and related national economic statistics, along with regional economic statistics.api_blog

The BEA API allows developers to build a service to search, display, analyze, retrieve, or view BEA statistics. For example, you can create a “mashup” that combines BEA data with other government or private data sources to create new services or give your users a different perspective on their communities. Or you can design a tool that gives your users new ways to visualize economic data.

The API includes methods for retrieving subsets of BEA statistical data and the meta-data that describes it using HTTP requests. It delivers data in two industry-standard formats: XML (Extensible Markup Language) and JSON (JavaScript Object Notation).

A beta version of the service launched in May and was featured during the National Civic Day of Hacking.

To use the API, you need to register here. Full documentation is available in the API User Guide.

Revising Economic Indicators: Here’s Why the Numbers Can Change

Once every 5 years, the U.S. Bureau of Economic Analysis produces a  “comprehensive” revision to its gross domestic product (GDP) statistics, incorporating changes to how the U.S. economy is measured as well as more complete source data all the way back to 1929.  This year is one of those years.  In just a few weeks—on July 31 to be exact–updated GDP numbers will be released.

New data, new methodologies, changes in definitions and classifications, and changes in presentations all will be incorporated into this year’s comprehensive GDP revision.

All those changes are designed to more accurately portray the evolving U.S. economy. For instance, this year’s comprehensive revision—the 14th in our history—includes changes to the way we classify spending on research and development and the production of artistic goods like TV shows, recorded music, and movies. It also includes changes in how defined benefit pension plans are treated.

Revisions don’t just happen every 5 years. Toward the end of every July, BEA releases the results of its annual revision with even more complete and detailed data for GDP estimates for the past 3 years. Two years ago, BEA introduced yet another revision method known as the flexible annual revision. This new option allows the Bureau to make an annual update to specific parts or even an entire series without having to wait for the next comprehensive revision cycle.

We also produce revisions to quarterly GDP numbers—three estimates for a given quarter. Each includes updated, more complete, and more accurate information as it becomes available. The first, called the “advance” estimate, typically receives the most attention and is released roughly 4 weeks after the end of a quarter. For example, the first estimate of GDP for this year’s January-to-March quarter came out near the end of April. The first estimate for the second quarter will come out July 31.

When we revise a major economic indicator, it’s not unusual for some to ask us, “Why didn’t you get it right the first time?”

It’s not that the earlier estimate was wrong. Rather, it’s the result of a delicate balancing act BEA performs to simultaneously achieve the two most important qualities of its estimates—accuracy and timeliness.

The public wants accurate data and wants it as soon as possible. To meet that need, BEA publishes early estimates that are based on partial data. Even though these data aren’t complete, they do provide an accurate general picture of economic activity. They capture the direction and trends of various components of the economy, providing valuable information that businesses and government leaders depend on and react to. They provide an “early read” on what’s happening in the economy.

The advance, quarterly estimate of GDP offers the first comprehensive picture of how the economy is performing in a given quarter. It gives a pretty accurate picture of whether the economy is slowing down or speeding up and which components of spending are responsible for those changes. It tells us the pace at which shoppers are shopping and what they are buying. It also tells us what businesses are producing and investing in, what government is spending, and how much we are buying and selling abroad. It also tells us about trends in key variables, like saving and inflation.

When BEA calculates the advance estimate, we don’t yet have complete source data, with the largest gaps in data for the third month of the quarter. In particular, the advance estimate lacks complete source data on inventories, trade, and consumer spending on services. Therefore, we must make assumptions for these missing pieces based in part on past trends. As part of this process, we publish a detailed technical note that lays out the assumptions we made for a particular estimate. We also publish detailed materials on the standardized procedures and methods used in the various vintages of the GDP estimates.

As new and more complete data become available, we incorporate that information into the second and third GDP estimates. About 45 percent of the advance estimate is based on initial or early estimates from various monthly and quarterly surveys that are subject to revision for various reasons, including late respondents that are eventually incorporated into the survey results. Another roughly 14 percent of the advance estimate is based on historical trends.

By the second GDP estimate, we have new data for the third month and revised data for earlier months. By the third estimate, a lot more data is available so that only 17 percent of the GDP estimate is based on information from the first set of monthly and quarterly surveys.

Even though GDP estimates are revised over time as more complete and accurate data become available, studies show that the general picture of economic activity does not change:

• The overall pattern of change in GDP over business cycles is little changed by revisions.
• Revisions to long-term growth rates are small, averaging less than 0.1 percentage point for average growth rates between 1985 and 2009.
• There are no substantial revisions—as measured by shares of GDP—in key measures such as investment, government spending, or the national saving rate.

Measuring GDP for the U.S. economy is always a work in progress. Because BEA faces so many challenges in measuring GDP, our estimates are informative, but never really final. Our advance estimates strike a good balance between accuracy and timeliness, given the data available at the time. Successive revisions reflect BEA’s commitment to incorporate both more complete source data when they become available and improved methods for measuring a rapidly changing economy.

More information on the 2013 comprehensive revision can be found on BEA’s Web site.

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