Overview of the Bureau of Economic Analysis

Overview of the Bureau of Economic AnalysisRegional Accounts at the BEA

Robert L. BrownCalibrating the Washington Economy: Data Tools for

Assessing Our State and Local EconomiesSkagit Valley, Washington

May 11, 2007

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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 nation’s economic accountant:

comprehensive double-entry accounts and economics

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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

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What do we produce? Regional economic accounts

Gross domestic product (GDP) by state

Personal income for states and local areas

Regional economic multipliers

Regional Economic Data

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Gross Domestic Product (GDP) by State

Most comprehensive measure of overall state economic activity

State counterpart of the US GDP GDP by State is the sum of

Compensation of employees Gross operating surplus Taxes on production and imports

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Currently available GDP-by-State estimates

Annual data starting 1963 to 2005 Total GDP by state and components

by industry Estimates in current dollars, chained

(2000) dollars and quantity indexes Derivation of real GDP by state:

apply national implicit price deflators to current-dollar GDP-by-state estimates for detailed industries

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GDP by State release cycle Total GDP by state and sector

industry 6 months after the end of year

Revised GDP by state by component and and subsector industry 18 months after reference year Based on more complete source data

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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

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Components of personal income Earnings (Place of Residence)

Compensation (Place of Work) Wages and salaries Supplements

Employer payments for pensions and health insurance Employer contributions for social insurance

Proprietors’ income (sole and partnerships) Less: Contributions for social insurance Plus: Adjustment for residence

Dividends, interest and rent (property income) Government and business transfers

Including Social Security, UI, Medicare/Medicaid, workers’ compensation benefits

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Relation of GDP by State to Personal Income (PI)

GDP by State PI

Accrual basis

Disbursement basis

Compensation by place of work

Wages and salaries

Employer contributions for employee pension and insurance funds

Employer contributions for government social insurance

Proprietors’ income

Taxes on production and imports less subsidies

Corporate income

Rental income

Receipts on assets (dividends, interest)

Transfer receipts (Social Security benefits, Medicare, Medicaid)

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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, and

employment by industry by place of work

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Local area personal income Annual data from 1969

Metro area PI now released 9 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

Earnings and employment by industry by place of work Compensation by county and industry available 12

months after reference year

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106 Counties Account for Half of 2004 U.S. Personal Income

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Personal income growth rates across 3111 counties, 2004-05

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Uses of BEA’s regional income and product estimates

By the US Govt, to distribute over $215 billion in federal funds to states

BEA Regional Income & Product Accounts Estimates Used to Distribute $215 Billion in Federal Funds, FY 2005

Source: General Services Administration, Catalog of Federal Domestic Assistance, April 2006

State Children's Insurance

Program (CHIP), $4,725

Adoption Assistance,

$1,712

Foster CareTitle IV-E,$4,371

Other, $1,979

RehabilitationServices

VocationalRehabilitation

Grants to States,$2,604

Child Care Mandatory &

Matching Funds,$2,717

Child Care & Development Block Grant,

$2,083

Vocational Education

Basic Grantsto States,$1,168

Medicaid $193,198

All other$21,358

[Funded Programs Are Shown in Millions of Dollars]

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Uses of BEA’s regional income and product estimates

By the US Govt, to distribute over $215 billion in federal funds to states

By the states, to develop state government revenue and expenditure estimates Used in all states 21 states have tax or spending limits

tied to state personal income

State Tax and Expenditure Limits

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Uses of BEA’s regional income and product estimates

By the US Govt, to distribute over $215 billion in federal funds to states

By the states, to develop state government revenue and expenditure estimates 21 states have spending limits tied to

state personal income By business, to determine areas for

new business location and expansion decisions

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RIMS Regional Input-Output Modeling

System Multipliers show impact of output

change in any industries on 60 industry groups and the area total

Effects on output, employment, and labor earnings

User requests multipliers for any state, county or combination of areas

Customized product produced for a fee

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Recent uses of RIMS multipliers

How military base closings affect local economies

Impact of a nuclear plant closure on Erie and Cattaraugus Counties, NY

The economic impact of Super Bowl XXXVII on the San Diego economy

The costs of Gulf oyster harvesting controls

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Contact Information

Robert L. BrownChief, Regional Economic Measurement

Division202-606-9246

[email protected]