Archive for the 'Industry' Category

BEA’s Industry Economic Accounts to Hit Major Milestone

Roughly every 5 years, the Bureau of Economic Analysis (BEA) releases comprehensive revisions of its major economic accounts. These revisions are generally more detailed than annual revisions, implementing changes in methods, statistics and definitions to better reflect an ever-evolving economy. In December, BEA will release the 2013 comprehensive revision of the Industry Economic Accounts (IEAs), which includes two main sets of statistics, the annual industry accounts and the benchmark input-output (I-O) accounts. That will follow the release in July of a comprehensive revision of the National Income and Product Accounts (NIPAs), or GDP accounts.

The upcoming comprehensive IEA revision will mark a significant milestone: the full integration of the IEAs with the NIPAs, which was first suggested in a March 2004 article in the Survey of Current Business and later amplified in other articles. This enhanced integration, which has long been recommended by economists, will allow for a higher degree of consistency among these widely followed accounts, offering a more consistent view of industry dynamics within the overall economy.

A preview of the 2013 comprehensive revision of the IEAs was published in the June 2013 issue of the Survey.

Quarterly GDP by Industry Data Improves Understanding of the Economy

In 2009, annual gross domestic product (GDP) for durable goods manufacturing showed a double-digit decline. The industry was the leading annual contributor to the bottoming out of the U.S. economy for that year. But looking at the results through a new experimental quarterly data series reveals a more nuanced and complete picture of what was happening in durable goods manufacturing. It shows that the decline in 2009 largely came from big drops in the fourth quarter of 2008 and the first quarter of 2009. After that durable goods actually increased for seven straight quarters.

This is an example of how BEA’s experimental quarterly GDP by industry statistics can provide a more detailed and precise view of how various industries are contributing to overall economic activity in the country, particularly around turning points. The recent recession and recovery illustrated the need for data that track how industries respond quarter to quarter, rather than year to year, to recessions and to various stimulus programs and other factors during a recovery.

While annual statistics on GDP by industry can be used to describe the leading contributors to business cycle dynamics over a full recession and recovery period, they are less useful in providing a picture of the dynamic U.S. economy as it is evolving. Annual data aren’t sufficient when trying to fully analyze the response of industries to changes in economic conditions and public policy, and they aren’t sufficient for gauging the economic impact and effectiveness of specific programs.

Quarterly data are not only important for improving our long-term understanding of the national economy, but also for more quickly assessing, monitoring, and adjusting decisions as the economy evolves. These statistics supplement other timely quarterly data—such as employment, wages and salaries, consumer spending, business investment, industrial production, and price statistics—allowing for a more complete analysis of business cycle dynamics and the sources of U.S. economic growth. Quarterly GDP by industry statistics also enhance the existing quarterly national income and product accounts statistics by providing a comprehensive accounting of consumer spending, investment, international trade, and industry performance on a quarterly basis.

BEA’s recently issued prototype of quarterly GDP by industry statistics updated an earlier prototype of estimates for 2007–2009 to include data for 2010–2011. It also presented quarterly estimates for gross output (that is, sales) for the first time. Adding a comprehensive set of statistics on quarterly gross output provides analysts with important information on industry-level performance. For example, coming out of the recession in 2009, GDP for the manufacturing sector grew even faster than total output for the manufacturing industry. That was a sign that productivity at factories had increased over the same period. Gross output also provides an industry breakdown of total sales, regardless of whether or not these sales are part of that industry’s contribution to GDP.

BEA plans to release one more set of prototype quarterly estimates as part of its annual revision of the industry accounts and to begin regularly producing quarterly GDP by industry statistics in 2014. Quarterly GDP by industry statistics would be available within 30 days of BEA’s third release of quarterly GDP. The quarterly data will provide industry by industry detail. As the quality of these statistics improves, BEA plans to expand the industry detail from the current 22 industries to the 65 industries now shown in the published annual statistics.

While progress continues on developing the quarterly GDP by industry statistics, more work remains before they are ready for regular production. In the meantime, BEA welcomes comments on the proposal. They can be emailed to You can address comments to Carol Moylan, Associate Director for Industry Economic Accounts.

Travel and Tourism Spending Increases

Inflation-adjusted spending on travel and tourism increased at an annual rate of 3.4 percent in the first three months of this year, the Bureau of Economic Analysis (BEA) reports. It had increased at a rate of 4.4 percent in the fourth quarter of 2011.  The slightly slower pace in the first quarter mostly reflected less spending on air travel and on lodging.

Still, travel and tourism spending has grown faster than the U.S. economy in both of the last two quarters. Gross domestic product rose 1.9 percent in the first quarter and 3.0 percent in the fourth quarter.Tourism spending

Meanwhile, overall growth in prices for travel and tourism goods and services turned up, increasing at a pace of 6.0 percent in the first quarter. That followed a 1.7 percent annualized decline in the fourth quarter. The upturn reflected higher prices for fuel and lodging.

Total travel and tourism employment increased at a 2.7 percent annualized pace to 7.6 million jobs in the first quarter. That followed a 1.3 percent growth rate in the final three months of last year. By comparison, overall U.S. employment increased 2.1 percent in the first quarter, after rising 1.4 percent in the fourth quarter of last year.

Of the total 7.6 million travel and tourism jobs at the start of this year,  5.4 million jobs involved producing goods and services sold “directly” to visitors such as hotel workers, airline pilots and souvenir sellers. Another 2.2 million jobs involved people “indirectly” employed, like those who make toiletries for hotel guests and the plastic used to produce souvenir key chains.

Spending on air transportation slowed, increasing 1.8 percent in the first quarter, after registering a 3.2 percent growth rate in the fourth quarter. Spending on lodging also slowed, increasing at a 4.8 percent pace in the first quarter, following a 7.4 percent growth rate in the fourth quarter. Business spending on lodging increased while leisure spending was flat.

Prices for passenger air transportation accelerated, rising at an 11.9 percent rate in the first quarter after increasing at a 6.5 percent pace in the fourth quarter. Airlines continued to increase fares in the first quarter to cover rising fuel costs. Prices for lodging also turned up, increasing 6.3 percent in the first quarter after falling at an 8.3 percent pace in the fourth quarter. To learn more about travel and tourism spending read the full report.

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