Overview of the Bureau of Economic Analysis

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Overview of the Bureau of Economic Analysis

• Regional Accounts at the BEA

Robert L. Brown Monitoring Montana Analyzing
Local Economies Through BEA Data Missoula,
Montana May 9, 2007
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BEA Mission

• To promote a better understanding of the U.S.
  economy by providing the most timely, relevant,
  and accurate economic accounts data in an
  objective and cost-effective manner
• The nations economic accountant comprehensive
  double-entry accounts and economics

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What Do We Produce?

• National Economic Accounts
• Gross Domestic Product (GDP)
• Personal Income
• Price Measures
• International Economic Accounts
• International transactions
• Direct investments
• Operations of US and foreign multinational
  companies
• Industry Accounts
• Input-output accounts
• GDP by industry
• Travel and tourism satellite account

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What do we produce?

• Regional economic accounts
• Gross domestic product (GDP) by state
• Personal income for states and local areas
• Regional economic multipliers

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• Regional Economic Data

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Gross Domestic Product (GDP) by State

• Most comprehensive measure of overall state
  economic activity
• State counterpart of the US GDP
• GDP by State is the sum of
• Compensation of employees
• Gross operating surplus
• Taxes on production and imports

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Currently available GDP-by-State estimates

• Annual data starting 1963 to 2005
• Total GDP by state and components by industry
• Estimates in current dollars, chained (2000)
  dollars and quantity indexes
• Derivation of real GDP by state
• apply national implicit price deflators to
  current-dollar GDP-by-state estimates for
  detailed industries

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GDP by State release cycle

• Total GDP by state and sector industry
• 6 months after the end of year
• Revised GDP by state by component and and
  subsector industry
• 18 months after reference year
• Based on more complete source data

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Personal income

• The most current, comprehensive and consistent
  measure available of household income
• Comprehensive measures income received by
  persons from
• production (returns to labor and capital)
• business and government transfers
• Consistent across time and geography

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Components of personal income

• Earnings (Place of Residence)
• Compensation (Place of Work)
• Wages and salaries
• Supplements
• Employer payments for pensions and health
  insurance
• Employer contributions for social insurance
• Proprietors income (sole and partnerships)
• Less Contributions for social insurance
• Plus Adjustment for residence
• Dividends, interest and rent (property income)
• Government and business transfers
• Including Social Security, UI, Medicare/Medicaid,
  workers compensation benefits

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Relation of GDP by State to Personal Income (PI)
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State personal income

• Quarterly estimates by place of residence from
  1948
• 3 months after the end of the quarter
• Annual estimates by place of residence from 1929
• Preliminary 3 months after end of year
• Detailed 9 months after the end of the year
• Includes per capita and disposable personal
  income estimates
• Annual earnings, compensation, and employment by
  industry by place of work

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Local area personal income

• Annual data from 1969
• Metro area PI now released 9 months after end of
  year
• County PI released 16 months after end of year
• Geographic availability
• 3,111 counties
• 363 Metropolitan Areas
• 576 Micropolitan Areas
• 179 BEA Economic Areas
• Earnings and employment by industry by place of
  work
• Compensation by county and industry available 12
  months after reference year

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106 Counties Account for Half of 2004 U.S.
Personal Income
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Personal income growth rates across 3111
counties, 2004-05
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Uses of BEAs regional income and product
estimates

• By the US Govt, to distribute over 215 billion
  in federal funds to states

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BEA Regional Income Product Accounts Estimates
Used to Distribute 215 Billion in Federal
Funds, FY 2005
Funded Programs Are Shown in Millions of Dollars
Source General Services Administration,
Catalog of Federal Domestic Assistance, April
2006
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Uses of BEAs regional income and product
estimates

• By the US Govt, to distribute over 215 billion
  in federal funds to states
• By the states, to develop state government
  revenue and expenditure estimates
• Used in all states
• 21 states have tax or spending limits tied to
  state personal income

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State Tax and Expenditure Limits
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Uses of BEAs regional income and product
estimates

• By the US Govt, to distribute over 215 billion
  in federal funds to states
• By the states, to develop state government
  revenue and expenditure estimates
• 21 states have spending limits tied to state
  personal income
• By business, to determine areas for new business
  location and expansion decisions

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RIMS

• Regional Input-Output Modeling System
• Multipliers show impact of output change in any
  industries on 60 industry groups and the area
  total
• Effects on output, employment, and labor earnings
• User requests multipliers for any state, county
  or combination of areas
• Customized product produced for a fee

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Recent uses of RIMS multipliers

• How military base closings affect local economies
• Impact of a nuclear plant closure on Erie and
  Cattaraugus Counties, NY
• The economic impact of Super Bowl XXXVII on the
  San Diego economy
• The costs of Gulf oyster harvesting controls

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Contact Information
Robert L. Brown Chief, Regional Economic
Measurement Division 202-606-9246 robert.brown_at_bea
.gov