Posted at 9:18 AM
Guest blog post by Dr. Ron Jarmin, Associate Director for Economic Programs, U.S. Bureau of the Census
The acceleration of the U.S. Census Bureau’s principal federal economic indicators has been a model of operational excellence for the agency and the U.S. Commerce Department. This acceleration was achieved through process improvements in estimation, imputation, and dissemination. The recently created Advance Economic Indicators report provides data users a significantly earlier glimpse of what is happening across several key aspects of the economy, and enables improved estimates of Gross Domestic Product (GDP).
The next major step in the economic indicator acceleration initiative will be unveiled in February, when the Census Bureau will release the Advance Quarterly Services Survey three weeks ahead of the Quarterly Services report, providing data users with a much earlier picture of what is happening within the service economy. These data will cover the fourth quarter of 2016. The new, accelerated schedule will enable the data to feed into the second estimate of GDP, which the Bureau of Economic Analysis expects will result in reduced revisions on an average of a quite small 0.1 to 0.2 percentage points between the second and third release from the QSS acceleration based on simulations.
The Census Bureau's initiative to accelerate the release of economic indicators was customer-driven: it responded to the needs of data users, accelerated timing without diminishing data quality, and was aimed at decreasing revisions to GDP—the premiere measurement of our Nation’s economy. Finally, the economic indicator acceleration responded to the strategic goals of the Census Bureau. These goals align with those of the Economics and Statistics Administration and the Commerce Department. ESA’s Strategic Theme 1 is to improve federal statistics – particularly those produced by the Bureau of Economic Analysis and the Census Bureau, in terms of “the quality and timeliness of statistical products.”
The Advance Quarterly Services Survey builds on the success from last year’s accelerated release of international trade and inventories data. Since July 2015, the Census Bureau has made select data on the export and import of goods available a full week ahead of the complete monthly release on foreign trade in goods and services. Doing so has given users an earlier understanding of international trade activity. Earlier access to the authoritative source data provides more complete information to BEA as the Bureau is preparing its GDP estimate and thus yields improved estimates of GDP, thereby reducing revisions to GDP. Additionally, the Quarterly Financial Report on Retail was also accelerated by a full week so that it comes out with the Quarterly Financial Report on Manufacturing, Mining, Wholesale Trade, and Select Service Industries.
The retail and wholesale inventories data reported in the Advance Economic Indicators report provide customers with earlier estimates of end-of-month inventories of retail and wholesale firms, and feed into GDP. Of note, methodology was neither compromised nor changed in order to provide this earlier snapshot of monthly inventory activity.
The accelerations to both the trade and inventory statistics as described above have each reduced revisions to GDP on an average of 0.1 to 0.2 percentage point. These first monthly data on international trade and inventories are now available in a single Advance Economic Indicators report.