July 13, 2016

The Bureau of Economic Analysis updates GDP figures and their major components every summer, sweeping in more comprehensive data that weren’t available for earlier estimates. The 2016 annual update, coming July 29, also will feature some of BEA’s efforts to continuously improve its measurement of the U.S. economy.

Summer updates to national income and product accounts incorporate data from annual Census Bureau surveys of businesses and state and local governments; federal budget data; corporate tax return tabulations; farm income statistics; and other sources.

These annual updates typically look back three years. This year, that covers statistics from 2013 through 2015, plus the first quarter of 2016. At the same time, BEA will release its initial gross domestic product estimate for the second quarter of 2016.

This year’s developments include:

Better Inventories Data

The GDP report covering the April through June period of 2016 marks a milestone for BEA’s “early looks” at quarterly GDP. It’s expected to be the first “advance” GDP estimate to benefit from the Census Bureau’s decision to speed up release of data on retail and wholesale inventories. Advance GDP estimates come out about a month after each quarter ends.

Starting on July 29, advance quarterly GDP estimates will include three months of inventory data, instead of only two.  Currently, BEA makes projections about inventories for the missing third month. With that month’s data in hand, BEA will be able to calculate a more accurate advance estimate of GDP. That should reduce changes between advance estimates and the second quarterly estimates, which come a month later and previously were the first chance to include three months of inventory data.

Revised Construction Spending Data

Last November, the Census Bureau revised some of its monthly construction spending estimates. The changes, for the period from January 2005 through October 2015, reflected a correction in the tabulation of private residential improvement spending. Because BEA uses Census’ construction data, the changes will have some impact on GDP estimates.

BEA’s July 29 annual update will reflect Census’ revised estimates covering 2013 through 2015. Changes dating to earlier years will be included in a future update.

Refining Seasonal Adjustments

BEA continues to move forward with its plan to refine seasonal adjustments in GDP estimates.

Seasonal adjustments smooth out fluctuations that occur at about the same time each year, such as holiday shopping. That helps ensure the remaining movements in GDP reflect true patterns of economic activity.

Despite regular reviews and updates of seasonal adjustment procedures, changes in seasonal patterns can sometimes lead to what’s known as “residual seasonality.” That’s when seasonal patterns still show up in the adjusted data.

BEA has conducted a component-by-component review of GDP to look for possible sources of residual seasonality and is in the process of using its findings to make refinements as needed.  We will be incorporating some of the results from our component-by-component review into this year’s annual update of the GDP accounts.