National

The results of the 2018 comprehensive update of the National Income and Product Accounts released July 27, 2018, reflect the outcome of a comprehensive review of the source data and seasonal adjustment methods that are used in constructing all the quarterly GDP estimates. Based on this extensive review, BEA is confident that our first quarter estimates represent reliable signals of economic activity in the quarter and that we have successfully addressed residual seasonality in estimates of GDP and its components.

This FAQ has been superseded by information in FAQ 1000 “How accurate and reliable are BEA’s early GDP estimates and revisions, and how have the revisions to GDP over time affected the picture of GDP growth?

The location of this FAQ has changed.  You may now access the FAQ at its new location.

Bad debt expenses, asset write downs, and loan-loss provisions are treated differently in corporate financial accounting than in estimating profits from current production in the national income and product accounts (NIPAs). In the national accounts, bad debt expenses and asset write downs are treated as capital losses that reduce the value of corporate assets on the balance sheet rather than as current-period expenses that lower profits.

A recent set of articles in Business Week (see Businessweek Online June 8, 2007) suggests that the real cost of offshoring has been understated because there is a “flaw” in the way that price statistics treat offshoring and that, as a result, real GDP and productivity growth are actually less robust than official statistics indicate. However, analysts at BEA—who are continuously updating the official estimates to reflect the impact of globalization—do not think that there is a significant bias on measured GDP or productivity growth.

Presently, BEA’s early monthly estimates of wages and salaries are based on the Bureau of Labor Statistics (BLS) employment survey, which only covers average weekly hours and earnings of production and nonsupervisory workers and excludes irregular pay, such as bonuses and the gain on the exercise of stock options. In April 2007, the BLS began releasing experimental monthly data that cover wages and salaries for all employees and that include both regular and irregular pay.

BEA’s early monthly estimates of wages and salaries—which are based on the Bureau of Labor Statistics monthly survey of employment, hours, and earnings—are revised when more comprehensive data from the BLS quarterly census of employment and wages become available, and some of these revisions have been quite large. Data on withheld income tax receipts are very timely, and forecasters have noted that large differences between the trend in tax receipts and the trend in wages and salaries are sometimes associated with subsequent revisions to wages and salaries.

In national economic accounting, GDP and GDI are conceptually equal. GDP measures overall economic activity by final expenditures, and GDI measures it by the incomes generated from producing GDP. In practice, GDP and GDI differ because they are constructed using different sources of information. The different source data produce different results for a number of reasons, including sampling errors, coverage differences, and timing differences with respect to when expenditures and incomes are recorded.

In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity, the often-cited identification of a recession with two consecutive quarters of negative GDP growth is not an official designation. The designation of a recession is the province of a committee of experts at the National Bureau of Economic Research (NBER), a private non-profit research organization that focuses on understanding the U.S. economy.

Gross domestic product (GDP) is a comprehensive measure of the nation’s production. In order to be comprehensive, it must include some goods and services that are not traded in the market place. Those components of the GDP are called imputations. Examples include the services of owner-occupied housing, financial services provided without charge, and the treatment of employer-provided health insurance.