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 14th, 2010
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
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)
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
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.
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 % Not Based on QSS HCE - Household Consumption Expenditures for Services NPISH - Final Consumption Expenditures of Nonprofit Institutions Serving Households
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
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
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.
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
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
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
Remaining Challenges Comparison of Price Indexes for Medical Care, 2001-2003 (compound annual growth rates)
Remaining Challenges • Better Integration of Economic Statistics: • Concepts and Methods • Presentation • Sample Frames • Classification • Data Synchronization