Bureau of Economic Analysis Seeks to Further
Improve Accuracy and Timeliness of Economic Statistics
President Bush's FY 2004
budget for the Bureau of Economic Analysis (BEA) will enhance and accelerate
key economic indicators that guide decision makers at all levels. These
improvements to gross domestic product (GDP) and the U.S. balance of
payments will make them more accurate and reliable, especially during
Commerce Secretary Don Evans
said, "President Bush and I firmly believe we must transform our economic
indicators from ones that measure the economic structure of the past
to ones that are forward looking. We need a statistical system that
anticipates structural changes in our dynamic economy so it can provide
the most accurate, timely and up-to-date information for policymakers
in Washington and business leaders the country."
The FY 2004 budget includes
funds for the development and use of real-time data, such as information
gathered by scanners at checkout counters in retail stores. These data
provide an early picture of the economy that are not otherwise revealed
until months or years later, at the time of annual or benchmark revisions.
Use of such real-time data will improve the accuracy of BEA's early
estimates of GDP.
"It is particularly important
to keep economic measures up-to-date during periods of economic uncertainty,"
Kathleen B. Cooper, Commerce Under Secretary for Economic Affairs, said
. "BEA economic accounts are at the center of public attention about
the state of the economy, fiscal and monetary policymaking, and day-to-day
business decision-making, The quality of the information BEA produces
affects the lives of all Americans."
BEA Director J. Steven Landefeld
illustrated the value of real-time data by pointing to BEA's 2002 annual
revisions of GDP, which incorporated a new method for estimating brokerage
receipts using a mix of public and private real‑time data that
better captured changes in pricing practices. "This more up-to-date
information showed a much weaker financial industry than we could measure
with existing data sources. It showed a economic downturn in 2002 that
started earlier and lasted longer than we had initially estimated.
With this and other real-time data, we should be able to provide decision
makers with more accurate information on the state of the economy at
the time when it is relevant rather than after the fact."
Funds for improving some
of BEA's international measures also are included in the President's
FY 2004 budget request for BEA. BEA will develop a quarterly survey
of services to improve the accuracy of the estimates of large, growing,
and volatile components of international trade, such as insurance, telecommunications,
and other services. BEA also will work with the Federal Reserve Board
and the Treasury to develop estimates of U.S. international assets and
liabilities in derivatives and other financial instruments not measured
in the U.S. Balance of Payments. According to BEA Director Landefeld,
"It seems untenable for the United States to be virtually the only major
developed country in the world that does not produce estimates of such
now common instruments as derivatives. This kind of information is
essential to alert the U.S. to its exposure to foreign financial crises."
These and other initiatives
-- including those making BEA's national, international, industry, and
regional accounts data available on an expedited schedule -- build upon
the Administration's FY 2002 and 2003 budget initiatives at BEA and
the Census Bureau.
The President's FY 2004
budget request for BEA is $78.292 million. Funds were requested for
the following initiatives: