Personal Consumption Expenditures. New Classification Syste

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Personal Consumption Expenditures

• New Classification System

Clint McCully, Chief
Consumption Branch, NIWD National
Economic Accounts Data Users Conference April
13, 2007
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PCE ClassificationBackground

• PCE classification system born in 1947
• Since 1947 . . .
• Large increases in consumer incomes
• Changesdemographic, technological, cultural,
  legal, tastes
• Many new goods and services
• Increased importance of services, including
  nonprofit organizations
• Marginalization/obsolescence of other goods and
  services
• New and expanded sources of funding
• PCE classification in 2007
• About the same as 1947

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New PCE ClassificationWhat It Is

• New structures
• Type of expenditure (functional)
• Type of product (by durability)
• Functional structure combines structures for
  individual and nonprofit consumption in the 1993
  UN System of National Accounts
• Classification of Individual Consumption by
  Purpose (COICOP)
• Classification of Total Outlays of Non-Profit
  Institutions Serving Households (NPISH) by
  Purpose (COPNI)
• Product structure follows SNA classification of
  durable goods, semidurable goods, nondurable
  goods, and services

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New PCE ClassificationWhat It Accomplishes

• Creates a relevant, logical and demand-based
  structure
• Accounts for transactions between households and
  NPISH
• Achieves greater consistency with household
  surveys
• Improves PCE deflation by precisely matching
  categories with associated price indexes
• Facilitates comparisons with other countries

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PCE Classification Overview

• Structure
• Major aggregates.
• Sub-aggregates ..
• Categories (time series)
• Commodities . (I/O)
• Items (I/O)
• Classification types
• Type of product by durability
• Type of expenditure by purpose
• Correspondence at the category level

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New PCE Classification Incorporation

• 2002 I/O benchmark estimates
• Functional classification
• Released in 2007
• Benchmark estimates in 2008
• Time series back to 1929

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PCE Functional Classification New and current
1997
No change in total

• CURRENT
• Food and tobacco
• Clothing, accessories, and jewelry
• Personal care
• Housing
• Household operation
• Medical care
• Personal business
• Transportation
• Recreation
• Education and research
• Religious and welfare activities
• Foreign travel by U.S. residents

NEW Household Consumption
Expenditures 1. Food and non-alcoholic
beverages 2. Alcoholic beverages and tobacco 3.
Clothing and footwear 4. Housing, water,
electricity, gas and other fuels 5. Furnishings,
household equipment and routine household
maintenance 6. Health 7. Transportation 8.
Communication 9. Recreation and
culture 10.Education 11. Restaurants and
accommodation services 12. Insurance and other
financial services 13. Miscellaneous
goods and services 14. Net foreign
travel and remittances Final Consumption
Expenditures of Nonprofit Institutions Serving
Households (NPISH)
5547.4 5440.4 421.5 115.4 263.8 999.1
268.1 932.8 634.4 121.6 521.9 98.3
340.6 427.6 326.0 -21.1 107.3
5547.4 850.0 337.4 82.9 842.6 616.2 1002.8 412.9
685.2 474.5 129.7 134.2 -21.1

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PCE Functional Classification New and current
1997

• CURRENT
• Food and tobacco
• Clothing, accessories, and jewelry
• Personal care
• Housing
• Household operation
• Medical care
• Personal business
• Transportation
• Recreation
• Education and research
• Religious and welfare activities
• Foreign travel by U.S. residents

NEW Household Consumption
Expenditures 1. Food and non-alcoholic
beverages 2. Alcoholic beverages and tobacco 3.
Clothing and footwear 4. Housing, water,
electricity, gas and other fuels 5. Furnishings,
household equipment and routine household
maintenance 6. Health 7. Transportation 8.
Communication 9. Recreation and
culture 10.Education 11. Restaurants and
accommodation services 12. Insurance and other
financial services 13. Miscellaneous
goods and services 14. Net foreign
travel and remittances Final Consumption
Expenditures of Nonprofit Institutions Serving
Households (NPISH)
5547.4 5440.4 421.5 115.4 263.8 999.1
268.1 932.8 634.4 121.6 521.9 98.3
340.6 427.6 326.0 -21.1 107.3
5547.4 850.0 337.4 82.9 842.6 616.2 1002.8 412.9
685.2 474.5 129.7 134.2 -21.1

New categories
Disappearing Categories
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PCE Functional Classification New and current
NEW Household Consumption
Expenditures 1. Food and non-alcoholic
beverages 2. Alcoholic beverages and tobacco 3.
Clothing and footwear 4. Housing, water,
electricity, gas and other fuels 5. Furnishings,
household equipment and routine household
maintenance 6. Health 7. Transportation 8.
Communication 9. Recreation and
culture 10.Education and research 11. Restaurants
and accommodation services 12. Insurance and
other financial services 13.
Miscellaneous goods and services 14.
Net foreign travel and remittances Final
Consumption Expenditures of Nonprofit
Institutions Serving Households (NPISH)

• CURRENT
• Food and tobacco
• Clothing, accessories, and jewelry
• Personal care
• Housing
• Household operation
• Medical care
• Personal business
• Transportation
• Recreation
• Education and research
• Religious and welfare activities
• Foreign travel by U.S. residents

421.5
115.4
18.2 Pet food
294.9
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PCE Functional Classification New and current
NEW Household Consumption
Expenditures 1. Food and non-alcoholic
beverages 2. Alcoholic beverages and tobacco 3.
Clothing and footwear 4. Housing, water,
electricity, gas and other fuels 5. Furnishings,
household equipment and routine household
maintenance 6. Health 7. Transport 8.
Communication 9. Recreation and
culture 10.Education and research 11. Restaurants
and accommodation services 12. Insurance and
other financial services 13.
Miscellaneous goods and services 14.
Net foreign travel and remittances Final
Consumption Expenditures of Nonprofit
Institutions Serving Households (NPISH)

• CURRENT
• Food and tobacco
• Clothing, accessories, and jewelry
• Personal care
• Housing
• Household operation
• Medical care
• Personal business
• Transportation
• Recreation
• Education and research
• Religious and welfare activities
• Foreign travel by U.S. residents

188.7
268.1
103.6 Telephone
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PCE Product Classification
NEW Structure
CURRENT Structure
1997
Durable Goods Motor vehicles Furnishings
durable household equipment Recreational
equipment vehicles Other durable
goods Nondurable Goods Semidurable goods
Clothing and footwear Recreational and reading
items Household items Motor vehicle parts
accessories Personal items Other nondurable
goods Purchased food, beverages and
tobacco Gasoline and other energy goods Other
nondurable goods, n.e.c.
Durable Goods Motor vehicle and parts Furniture
and household equipment Other Nondurable
Goods Food Clothing and shoes Gasoline, fuel oil
other energy goods Other
557.6 254.0 130.8 99.7 73.2 1465.0 473.8 249.3 11
4.4 58.3 39.1 12.8 991.2 537.0 147.7 306.6

692.7 305.1 256.2 131.4 1619.0 796.2 258.1 147.
7 416.9
To semidurables
Purchased meals to services
New categories
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PCE Product Classification (cont.)
NEW Structure
CURRENT Structure
1997
3524.8 3417.6 975.9 803.8 206.9 213.9 340.6 427
.6 448.9 107.2
3235.8 842.6 337.0 245.7 873.0 215.1 722.4

Services Housing Household operation
services Transportation services Medical care
services Recreation services Other services
Services Household consumption
expenditures Housing and utilities Health
care Transportation services Recreational and
cultural activities Restaurants and
accommodation services Insurance and other
financial services Other services Final
consumption expenditures of nonprofit
institutions serving households
New categories
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PCE Product Classification
NEW Structure
CURRENT Structure
Durable Goods Motor vehicles Recreational
equipment vehicles .. Nondurable
Goods Semidurable goods Motor vehicle parts
accessories .. Other nondurable
goods .. Services .
Durable Goods Motor vehicle and parts Furniture
and household equipment Others Nondurable
Goods Food Clothing and shoes Gasoline, fuel oil
other energy goods Others Services Housing House
hold operation services Transportation
services Medical care services Recreation
services Other services
254.0
9.2
41.9
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PCE Product Classification
NEW Structure
CURRENT Structure
Durable Goods .. Nondurable Goods Semidurable
goods Other nondurable goods Food and
non-alcoholic beverages Alcoholic beverages
tobacco .. Nondurable recreational items,
n.e.c. .. Services .. Restaurants
accommodation .
Durable Goods Motor vehicle and parts Furniture
and household equipment Others Nondurable
Goods Food Clothing and shoes Gasoline, fuel oil
other energy goods Others Services Housing House
hold operation services Transportation
services Medical care services Recreation
services Other services
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