Commodity-flowmethod

A method used by BEA to estimate various components of consumer spending, of investment in equipment and software, and of state and local government spending. The process begins with estimates of the domestic output or domestic sales or shipments of a commodity valued in producers’ prices. Then, estimates of the domestic supply of that commodity—the amount that is available for domestic consumption— are prepared by adding imports and by subtracting exports and inventory change. Next, the domestic supply of the commodity is allocatedamong domestic purchasers—that is, persons, business, and government. Finally, the estimates are converted to purchasers’ prices byadding transportation costs and trademargins.