The Bureau of Economic Analysis is constantly working with our data partners to make GDP — our signature measure of the ever-changing U.S. economy — even better. As part of that effort, our sister statistical agency, the U.S. Census Bureau, has committed to providing key data for GDP even faster.
Getting this crucial data faster will make the information used to calculate initial estimates of quarterly gross domestic product more complete. That should reduce revisions of the GDP number in later estimates.
The Census Bureau is the largest supplier of data that feed into BEA’s calculations of GDP. The Census Bureau recently announced plans to provide faster access to its data on wholesale and retail trade inventories, which will allow BEA to incorporate three months of this information into its initial estimates of quarterly GDP.
Currently, in calculating its first estimates of GDP each quarter, BEA only has inventories data for two months of the quarter. This has forced BEA to use assumptions about that third month, which has been a continuing source of revisions to our GDP estimates.
The first time an initial GDP report will incorporate all three months of Census’ inventories data will be Friday, July 29, in BEA’s estimate of GDP for the second quarter.
The faster inventories data will be in a new Census Bureau release called the “Advance Economic Indicators Report.”
Accelerating business inventories data is the latest example of the collaboration between the Census Bureau and the BEA, two premier data agencies housed within the U.S. Commerce Department.
Last year, the Census Bureau provided BEA with faster access to data on imports and exports of goods, allowing BEA to incorporate three months of official trade data into its first estimate of quarterly GDP. That move alone, on average, reduced revisions to GDP by 0.1 to 0.2 percentage point, or by $6 billion, on an annualized basis.
“The advance trade release has improved the accuracy of the first estimate of GDP,” said Maurine Haver, president of Haver Analytics. “Advance figures on inventories will fill another important data gap making it possible for the BEA to provide an even better number. Those of us who track the U.S. economy recognize the challenges faced by the Census Bureau in accelerating the release of these data and greatly appreciate these efforts.”
For a given quarter, BEA makes three separate estimates of GDP. Each subsequent calculation is based on more complete information. BEA’s first estimate of GDP for a quarter is called the “advance,” which is released roughly 30 days after the quarter has ended. That number can be revised when BEA makes its second and third GDP calculations for the same quarter. (The second estimate comes out about 60 days after the end of the quarter and the third estimate about 90 days.)
Reporting the faster data for GDP underscores the ongoing cross-agency collaboration and innovative thinking necessary to deliver the best statistics to businesses, policymakers and other customers.