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www.bea.gov Better Data for Better Decisions: Progress & Prospects J. Steven Landefeld, Director Measuring and Enhancing Services Trade Data & Information Conference U.S. Department of Commerce September 14 th , 2010

Better Data for Better Decisions: Progress & Prospects

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Better Data for Better Decisions: Progress & Prospects. J. Steven Landefeld, Director. Measuring and Enhancing Services Trade Data & Information Conference U.S. Department of Commerce September 14 th , 2010. - PowerPoint PPT Presentation

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Page 1: Better Data for Better Decisions:  Progress & Prospects

www.bea.gov

Better Data for Better Decisions:

Progress & ProspectsJ. Steven Landefeld, Director

Measuring and Enhancing Services Trade Data & Information ConferenceU.S. Department of Commerce

September 14th, 2010

Page 2: Better Data for Better Decisions:  Progress & Prospects

2www.bea.gov

Updating Measures of Services to Reflect the Expanding Role of Services in the Economy

▪Despite their key role in today’s economy, services data in the past have seriously lagged data on manufacturing: Services now account for over 2/3

of GDP; Manufacturing now accounts for

less than 1/5 of GDP

Page 3: Better Data for Better Decisions:  Progress & Prospects

3www.bea.gov

Updating Measures of Services to Reflect the Expanding Role of Services in the Economy

▪ Improvements in services measurement provided a much better understanding of services contribution to the revival of growth and productivity since the mid-1990’s

Brookings, Triplett and Bosworth, 2004

▪ These improvements were in response to concerns by the business, academic, and policy community

Greenspan, and Corrado and Slifman (1996) AEA, NABE, CEA (Boskin)

Page 4: Better Data for Better Decisions:  Progress & Prospects

4www.bea.gov

Contributions to productivity

▪ Increasing productivity in services led the dramatic improvement in U.S. productivity growth over the 1995-2001 time period.

▪Although productivity growth has slowed, productivity of private services-producing industries over the 2002-2007 time period continues to be well above their long-term average

Page 5: Better Data for Better Decisions:  Progress & Prospects

5www.bea.gov

Productivity Trends

20

40

60

80

100

120

140

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Private goods-producing industries Private services-producing industries

[Real gross output per hour] Average annual growth rates

1995-2001 2002-2007Goods-producing 3.7 1.3Services-producing 2.2 2.4

Page 6: Better Data for Better Decisions:  Progress & Prospects

6www.bea.gov

Contributions to growth in Real GDP

3.4

4.1

2.32.2

3.0

2.1

0.9 1.0

0.10.3 0.2 0.10.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

1960-1995 1995-2000 2000-2007

Total Services Goods Government

Page 7: Better Data for Better Decisions:  Progress & Prospects

7www.bea.gov

Contributions to Real GDP by selected private service industries

0.38

0.29 0.300.28

0.44

0.320.29

0.43

0.140.150.22

0.150.12

0.26 0.23

0.05

0.39

0.12

0.00

0.15

0.30

0.45

0.60

0.75

1960-1995 1995-2000 2000-2007

Real estate Retail trade

Wholesale trade Telecommunications and Broadcasting

Miscs. Services Securities, commodity contracts, and investments

Page 8: Better Data for Better Decisions:  Progress & Prospects

8www.bea.gov

Updating Measures of Services to Reflect the Expanding Role of Services in the Economy

▪QSS expansion reduced the share of the early GDP estimates accounted for by extrapolation and improved the accuracy of these estimates for business and public decision makers.

The latest QSS expansion lowered the trend-based share of the early GDP estimates from 23 to 13 percent.

QSS has had another major expansion in 2010 that will continue to lower the trend share of early GDP estimates.

Page 9: Better Data for Better Decisions:  Progress & Prospects

bea.gov 9

Improvements to the National Accounts:Use of QSS Data in PCE Estimates (July

2010)

HCE Health Care Services 92% 8% Transportation Services 58% 42% Recreational Services 76% 24% Other Services 65% 35%

NPISH Gross Output of NPISH 74% 26%

% Based on QSS

HCE - Household Consumption Expenditures for Services NPISH - Final Consumption Expenditures of Nonprofit Institutions Serving Households

% Not Based on QSS

Page 10: Better Data for Better Decisions:  Progress & Prospects

bea.gov 10

Improvements to the Industry Accounts

Services Annual Survey (SAS) expansion Better information on industry receipts and

expenses in BEA’s input-output accounts QSS expansion

More accurate “advance” GDP by industry statistics

NAICS updates focus on improved coverage in key growth sectors, such as Information

Page 11: Better Data for Better Decisions:  Progress & Prospects

11www.bea.gov

Updating Measures of Services to Reflect the Expanding Role of Services in the Economy

▪Expanded Services Annual Survey collections improved the accuracy of the input-output coefficients for services industries. Such coefficients are used to

assess a broad range of economic events Hurricane Katrina Impact of public investments under

the Recovery Act

Page 12: Better Data for Better Decisions:  Progress & Prospects

12www.bea.gov

Updating Measures of Services to Reflect the Expanding Role of Services in the Economy

▪Greater detail in international trade in services. Large expansion the geographic detail for

the quarterly trade data from 10 countries and areas to 37, including China and India

Breakdown of affiliated trade by type facilitates analysis of services trade and off-shoring issues.

Large expansion of quarterly detail with key countries such as China.

Page 13: Better Data for Better Decisions:  Progress & Prospects

13www.bea.gov

Improvements to the International Accounts: Cross-Border Trade

▪Surveys converted from annual to quarterly

▪ Integration of data collection for affiliated and unrelated-party trade

▪ Improved mailing lists through data sharing with Census

▪New credit card survey will improve statistics on international travel

Page 14: Better Data for Better Decisions:  Progress & Prospects

14www.bea.gov

Improvements to the International Accounts: Affiliated Services Trade

Coverage expanded to include banks Added 12 percent to services provided to

foreign markets by foreign affiliates of U.S. companies

Added 8 percent to services provided to U.S. markets by U.S. affiliates of foreign companies

Improved measures for finance, insurance, and wholesale and retail trade Un-priced financial services of banks included

along with explicit fees

Page 15: Better Data for Better Decisions:  Progress & Prospects

bea.gov 15

Remaining Challenges

Count investment in R&D and other innovation

Improve measures of financial services. Develop measures of small business for the

national accounts. Develop quarterly GDP by industry and other

integrated measures of business conditions, particularly for service industries.

Develop more detailed measures of energy services.

Develop Improved Measures of Medical Care Services

Page 16: Better Data for Better Decisions:  Progress & Prospects

16www.bea.gov

Planned Expansion of Measures of Energy Services

Petroleum and coal products Nuclear

Natural gas

Other

Hydroelectric

Coal

Coal miningOil and gas extraction

Other energy products

Electric Power

Page 17: Better Data for Better Decisions:  Progress & Prospects

17www.bea.gov

Remaining ChallengesComparison of Price Indexes for Medical Care, 2001-2003

(compound annual growth rates)

0

1

2

3

4

5

All Diseases0

1

2

3

4

5

PrescriptionDrugs

Office Visits HospitalOutpatient

HospitalInpatient

Provider-Based Disease-Based

Source: A. Aizcorbe and N. Nestoriak, “Using Commercially-Defined Episodes of Illness for the Measurement of Health Accounts: A Progress Report,” Paper presented at NBER/CRIW Summer Institute, July 2006

0

1

2

3

4

5

All Diseases0

1

2

3

4

5

PrescriptionDrugs

Office Visits HospitalOutpatient

HospitalInpatient

Provider-Based Disease-Based

Source: A. Aizcorbe and N. Nestoriak, “Using Commercially-Defined Episodes of Illness for the Measurement of Health Accounts: A Progress Report,” Paper presented at NBER/CRIW Summer Institute, July 2006

Page 18: Better Data for Better Decisions:  Progress & Prospects

18www.bea.gov

Remaining Challenges

▪Better Integration of Economic Statistics: Concepts and Methods Presentation Sample Frames Classification Data Synchronization