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8/14/2019 National accounts and Census data
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GDP, the National Accounts,
and Census Economic Data
Brent Moulton
March 15, 2007
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What are the NIPAs?
The National Income and Product Accounts (NIPAs)are a set of economic accounts that track economicflows within the U.S. economy.
Two key NIPA measures are:
Gross domestic product (GDP): Measures the totalvalue of goods and services produced within the U.S.in a period.
Gross domestic income (GDI): Measures theincomes earned and the costs incurred in producingthose goods and services.
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The Circular Flow
Households Businesses
Goods and services
Labor
Income
Expenditures
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NIPA seven-account summary
Domestic Income and Product AccountPrivate Enterprise Income AccountPersonal Income and Outlay Account
Government Receipts and ExpendituresAccountForeign Transactions Current Account
Domestic Capital AccountForeign Transactions Capital Account
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GDP as value added
Value added is measured as:Output less intermediate consumption
Example: Wheat to flour to bread.
GDP is value of bread.Equals sum of value added of farmer, miller, andbaker.
GDP: the sum of industry value added
Also equals sum of final expendituresAlso equals sum of income earned inproduction
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Account 1. Domestic Income and ProductPersonal consumption expenditures
Gross private domestic investment
Net exports of goods and services
Government consumptionexpenditures and grossinvestment
Compensation of employees,
paid
Taxes on production andimports
Less: Subsidies
Net operating surplus
Consumption of fixed capital
Gross Domestic Income Gross Domestic Product
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Expenditure components of GDP (2005)
GDP = C + I + G + X - M
= GDP
Consumption
70.0%
Investment
16.9%
Government
18.9%
Exports
10.4%
Imports
16.2%
+ + + -
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Income components of GDP (2005)
= GDP
Compensation
57.1%
TOPI lesssubsidies
6.8%
Net operatingsurplus
23.2%Consumption
of fixedcapital
12.6% Statisticaldiscrepancy
0.3%+ + + +
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Account 1. Domestic Income and ProductPersonal consumption expenditures
Gross private domestic investment
Net exports of goods and services
Government consumption expendituresand gross investment
Compensation of employees,
paidTaxes on production andimports
Less: SubsidiesNet operating surplus
Consumption of fixed capital
Gross domestic income
Statistical discrepancy
Gross Domestic Product Gross Domestic Product
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Account 2. Private Enterprise Income
Provides information on the sourcesand uses of the income of privateenterprises.
Includes current-production corporateprofits and proprietors income.
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Account 3. Personal Income and Outlays
Provides information on the sourcesand uses of income received bypersons.
Includes personal income and personalsaving.Can derive disposable personal income
and personal saving rate
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Account 4. Government Receipts and Expenditures
Provides information on thetransactions of the FederalGovernment and state and local
governments.Includes social benefits andgovernment saving.
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Account 5. Foreign Transactions
Provides information on trade in goodsin services with the rest of the world.Includes imports, exports, and the
balance on the current account.
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Account 6. Domestic Capital
Provides information on saving andinvestment for the U.S. economy.Key measures: Gross saving, which is
net saving plus the consumption of fixed capital, and net saving, which isa measure of saving that is available
for adding to the Nations net stock of fixed assets.
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Account 7. Foreign Transactions Capital
Provides information on thetransactions with the rest of the worldthat are linked to acquisition or
disposition of fixed assets.
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Features of national accounts
Inflation-adjusted (real GDP)
Quarterly frequency
Seasonally adjusted
Annualized
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Estimation cycle
Advance estimates are releasedabout 3 1/ 2 weeks after a calendarquarter concludes.
Preliminary and final estimatesare released 30 and 60 days after theadvance.
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Annual revisions and benchmarking
Annual revisions are released in Julyof non-comprehensive revision years.
Comprehensive revisions occur aboutevery 4-5 years.
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GDP by Sector, 2005
Business
77.3%
Households andinstitutions
11.5%
Government
11.2%
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Featured measures
Real GDP growth, as indicated by the percentchange in the chain-type quantity index.
Contributions to real GDP growth reflect the rolethat individual components of GDP play in producing
the growth in GDP.Gross domestic purchases price index (and personalconsumption expenditures price index)inflationmeasures that reflect prices of goods and services
purchased by U.S. residents.
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Other important GDP-related measures
Current-dollar GDP represents thevalue of production at a point in time.
GDP percentage shares provide ameasure of the size and importance of a component.
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Chained-Dollar GDP
Chained-dollar GDP is the product of current-dollar GDP in the referenceyear and the GDP quantity index(divided by 100).Chained-dollar components do not addto the total.See Chained-Dollar Indexes from theNovember 2003 Survey of CurrentBusiness .
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NBER Recessions
-10
-5
0
5
10
15
20
1970-I 1973-I 1976-I 1979-I 1982-I 1985-I 1988-I 1991-I 1994-I 1997-I 2000-I 2003-I
P e r c e n
t
Real GDP growth
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On www.BEA.gov
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Census data: Economic census
Primary source data for benchmarkinput-output accounts.
Estimates supply of products by industry
and use of products by industry and finalexpenditures.Critical because it provides detailsnecessary to separate intermediate consumption from final expenditures.
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Annual Census source dataAnnual Retail Trade Survey
Personal consumption expenditures (PCE) forgoods; inventories
Services Annual Survey PCE servicesAnnual Survey of Manufactures
Investment in equipment; inventoriesValue of construction put in place structuresAnnual Trade Survey inventories
Foreign trade dataGovernment Finances Survey
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Example Equipment investment
Commodity flow method:ASM data on shipments of detailed durablegoods product categoriesSubtract those going to intermediate uses.
Add imports: domestic supplySubtract goods going to exports,government, PCEAdd margins
Result is estimate of private investment inequipment.
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Example retail trade
Sales by retail industryMerchandise lines (products) data byindustry from last economic census
Estimate products, controlling thetotal to total retail sales for categoriesselling primarily to consumers.Deflate using detailed CPIsResult is estimate of PCE for goods.
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Quarterly source data
Census indicator surveys:M3 shipments and inventories forequipment investment, mfg inventories
Monthly retail trade for PCE goods,retail inventoriesWholesale trade inventories
Value put in place for structuresForeign trade data
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Data issues
Business births may not be promptlycaptured or included in samples.Non-participation in voluntary surveys
may be problemExamplesRespondents may not followinstructions.
Example may report worldwideshipments or inventories
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Diagnosing data problems
Statistical discrepancy is high levelindicator of problems.Monitor revisions persistent large
revisions or revisions in the samedirection.Research on data issues.
Examples