BEA and the Census Bureau are taking another big step this month in their joint quest to get more data into earlier estimates of gross domestic product.
The Census Bureau will begin releasing an early snapshot of its service sector data each quarter, in time for BEA’s second estimate of quarterly GDP.
The new information will be included in BEA statistics beginning Feb. 28 ─ the second estimate of GDP for the fourth quarter and the year of 2016.
Seeking source data faster is one way BEA works to continually improve its estimates of GDP, the preeminent measure of the ever-changing U.S. economy. The Census Bureau is the biggest contributor of data for GDP.
During the three months following the end of each quarter, economic data flows into BEA from many sources. BEA’s economists calculate quarterly GDP three times over this period, with each estimate including more complete information than the last. Previously, they had to wait until the third estimate to include the types of services data now destined for second estimates.
BEA expects the earlier data to reduce revisions between second and third estimates by about 0.1 to 0.2 percentage point on average.
GDP estimates also benefited in 2015 when the Census Bureau began providing faster data on international trade in goods. Last year, Census started releasing data earlier on wholesale and retail trade inventories, another boon for GDP calculations.
Census plans to release its first Advance Quarterly Services Report on Feb. 17. It will serve as a preview of Census’ more detailed services report, which already is a major data source for BEA’s third estimates of GDP.
Advance Quarterly Services Reports, to be published about 50 days after the end of each quarter, will offer a snapshot of revenue for selected sectors, subsectors and industries. They will enhance GDP estimates by providing earlier data on personal consumption expenditures for services and also on private fixed investment in software.
The full Quarterly Services Report will follow three weeks later on March 9. It will feed into BEA’s third estimate of GDP, coming March 30.