Overview of the Bureau of Economic Analysis

1
Overview of the Bureau of Economic Analysis

• Regional Accounts at the BEA

Robert L. Brown Monitoring Mississippi Data
Tools for Understanding Our State and Local
Economies Long Beach, Mississippi April 1, 2008
2
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

3
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

4
What do we produce?

• Regional economic accounts
• Gross domestic product (GDP) by state
• Prototype estimates of GDP for metropolitan areas
• Personal income for states and local areas
• Regional economic multipliersRIMS II

5
Gross Domestic Product (GDP) by State

• Most comprehensive measure of overall state
  economic activity
• GDP by State is the sum of
• Compensation of employees
• Gross operating surplus
• Taxes on production and imports
• 1963-2006 estimates
• Available 6 months after end of year

6
GDP for Metropolitan Areas

• Prototype estimates of GDP for metro areas
• 2001-2005 released in September 2007
• Update planned for Fall 2008

7
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

8
Relation of GDP by State to Personal Income (PI)
9
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, wages, and
  employment by industry by place of work

10
Local area personal income

• Annual data from 1969
• Metro area now released 9 months after end of
  year
• County compensation released 12 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
• Industry detail by place of work
• Compensation by county and industry available 12
  months after reference year
• Earnings and employment county available 16 month
  after end of year

11
Personal income growth rates across 3111
counties, 2004-05
12
Uses of BEAs regional personal income

• By the US Govt, to distribute gt215 billion in
  federal funds to states
• By the states, to develop state government
  revenue and expenditure estimates
• 21 states have tax or spending limits tied to
  state personal income
• By business, to determine areas for new business
  location and expansion decisions
• Local areas for impact statements, income and
  employment dynamics analysis

13
Regional Input-Output Modeling System RIMS

• Multipliers show impact of output change in any
  industries on 60 industry groups and the area
  total
• Effects on output, employment, and labor earnings
• Customized product produced for a fee

14
(No Transcript)
15
(No Transcript)
16
Whats Behind the Regional Personal Income
Statistics, And What Lies Ahead
17
Key local area statistics

• Total personal income
• All income received by residents
• Per capita personal income
• Personal income divided by population
• Indicator of economic well-being
• Earnings by place of work and by industry
• Proxy for production
• Industrial structure
• Dividends, interest, and rent
• Income from assets and housing
• Transfer receipts
• Social Security, government-administered medical,
  income maintenance

18
Alternative Incomes
19
Per Capita Income Change 2004-05(Dollars)
20
Per Capita Income, 2005, dollars
21
How We Produce the Estimates

• Administrative record information
• Advantage--provides detailed information at low
  cost
• Disadvantage--does not precisely match what is
  being estimatedmust make adjustments to
  compensate for differences
• Some census data--quinquennial Agriculture and
  decennial Population and Housing
• Very little from survey information

22
Sources of Data
60
5
23
6
6
23
Derivation of Personal Income

• Wage and salary disbursements
• Supplements to wages and salaries
• Compensation
• Proprietors income
• Earnings (place of work)
• Contributions for govt. social insurance
• Adjustment for residence
• Net Earnings (place of residence)
• Dividends, interest, and rent
• Personal current transfer receipts
• Personal income

24
Wage Salary Disbursements

• 55 of personal income (2005)
• Based primarily on Quarterly Census of Employment
  and Wages (QCEW) report
• Byproduct of Unemployment Insurance (UI) program
• Excellent quality--Most workers are covered by UI
• Other data sources used for 6 of noncovered
  workers under-reported wages tips
• Data are by place of work

25
Supplements to Wages Salaries

• 13 of personal income
• Employer contributions to
• Pension private insurance funds (9)
• Govt. social insurance funds (4)

26
Real Compensation Wages per Worker, United
States, 20001.0
27
Real Compensation Wages per Worker,
Mississippi, 20001.0
28
Proprietors income

• 9.2 of personal income (farm 0.4, nonfarm 8.8)
• Farm
• Based on US Department of Agriculture data
• Nonfarm
• Based on tabulations of IRS tax returnsSchedule
  C partnership Form 1065
• Adjusted for misreported income

29
Contributions for Govt. Social Insurance

• 8 of personal income
• This is a deduction in the derivation of personal
  income
• Mostly contributions for Social Security
  Medicare
• Contributions from Employers, Employees, the
  Self-Employed

30
Adjustment for Residence

• Place of work compensation and earnings
• Shows location of production
• Used as proxy for current production
• Place of residence income
• Indicator of economic well-being
• Shows where income is available for tax planning
  and for spending analyses

31
Adjustment for Residence

• lt0.5 of personal income nationally
• Mississippi 2.9
• Hinds, Ms -21.3
• Harrison, Ms -11.8
• Jackson, Ms 4.7
• Rankin, Ms 16.4
• Louisiana -0.1
• Orleans, La -65.0
• St. Tammany, La 40.0
• Inter-county commuters
• Based on Census Journey to Work data updated
  with IRS wages (place of residence)

32
Dividends, Interest, Rent

• 16 of personal income
• Nearly 1/2 of interest is received by pension
  funds and life insurance carriers on behalf of
  persons
• Local estimates based on tabulations of income
  tax returns and Census housing statistics

33
Personal Current Transfer Receipts

• 15 of personal income
• Social Security accounts for 1/3
• Includes in-kind transfers such as Medicare
  Medicaid45 of transfers
• Income maintenance, unemployment benefits,
  veterans benefits, etc.
• Based on primary data tabulated by state or county

34
Future Improvements Personal Income

• Accelerate the release of county estimates of
  personal income
• 10 months after end of year
• FY 2008 budget initiative to investigate the
  feasibility of producing this

35
Future Improvements GDP Metro

• Gross domestic product for metropolitan areas
• Prototype estimates released in 2007
• FY 2008 budget initiative to make this permanent

36
And Finally Comprehensive Revision

• Spring 2010every 5 years
• Definitional revisions
• Statistical and methodological revisions
• Presentational revisions

37
Contact Information
Robert L. Brown Chief, Regional Economic
Measurement Division 202-606-9246 robert.brown_at_bea
.gov