Robert P. Parker and Eugene P. Seskin wrote this article; Norman E. Bakka, Mary Carol Barron, Stephanie L. Howell, and Virginia H. Mannering provided assistance in compiling the table changes.
Beginning this November, the Bureau of Economic Analysis (BEA) will release the results of a comprehensive, or benchmark, revision of the national income and product accounts (NIPA's). (See the box "Release Schedule for Revised NIPA Estimates" on this page.) Comprehensive revisions incorporate three kinds of changes: Definitional and classificational changes, statistical changes, and new and redesigned tables. They differ from annual NIPA revisions, such as the last one released in July 1994, because of the scope of the changes incorporated and because of the number of years subject to revision.
Three of the most important changes for this comprehensive revision were previewed earlier in the SURVEY OF CURRENT BUSINESS: An article in the July 1995 issue described BEA's new featured measures of output and prices, and an article in last month's issue discussed the recognition of government investment and the incorporation of a new methodology for calculating depreciation./1/ Subsequent articles will identify the newly incorporated source data, summarize the definitional and statistical changes, and discuss other aspects of the revision in more detail.
This article describes the new and redesigned tables that will update the presentation of the NIPA's./2/ Table 1 provides a complete list of the revised set of NIPA tables arranged according to the new table numbers. The table cross-references the new table numbers with the old ones, identifies the new tables, and shows, at the end of the list, the currently published table that will be deleted. The last column in table 1 identifies the major changes to each table. These changes primarily result from the introduction of BEA's new featured measures of output and prices and the recognition of government investment. The first section of this article discusses changes related to the new featured measures, the second section discusses changes related to the recognition of government investment, and the last section explains the reasons for other major presentational changes.
For this comprehensive revision, BEA will feature output and price measures calculated using weights of adjacent years. Such "chain-type annual-weighted" measures have been published in the SURVEY since 1992 and have been presented as index numbers using 1987 as the base period. For the upcoming revision, these chain-type indexes will be expressed using 1992 as the base period./3/ To facilitate use of the chain-type measures of real output, several major presentational changes will be introduced.
First, "chained (1992) dollar" estimates will be presented for all series in the NIPA tables that currently show estimates in constant dollars./4/ These "chained-dollar" estimates will be calculated for most series as the product of the chain-type annual-weighted output indexwith 1992 equal to 100and the 1992 current-dollar value of the corresponding series divided by 100./5/
Second, because the formula used to calculate the new featured measure uses the geometric mean of weights of more than one period, the corresponding chained-dollar estimates will not be additive. Consequently, most NIPA tables showing these estimates also will show a new line item termed "residual," whose value will be equal to the difference between the major aggregate in the table and the sum of the most detailed items presented in that table. (Table 1 identifies the NIPA tables that will include the residual line item.) Third, a table (new table 8.2) will be added to show the contributions of major gross domestic product (GDP) components to the growth in quarterly and annual real GDP. (Similar information on contributions to growth will appear in the GDP news release.)
Featuring the chain-type measures also will change the presentation of quantity and price indexes in the NIPA tables. Currently, tables 7.1, 7.2, and 7.3 present eight indexes for GDP and its major components and for gross domestic purchases, gross national product (GNP), and other major aggregates; in the new presentation, these tables will show four indexes for each component: "Current dollars," "chain-type quantity index," "chain-type price index," and "implicit price deflator."/6/ Tables 7.4, 7.6, 7.9, 7.10, and 7.11, which now show price indexes for various disaggregations of the major GDP components, will expand to show the chain-type indexes for both quantities and prices./7/ Because of user interest in fixed-weighted measures, fixed (1992) weighted series will be available online from STAT-USA soon after each GDP release. In addition, a new table (table 8.27) showing fixed (1992) weighted estimates will be presented at the time of annual NIPA revisions and in the historical volumes./8/
Adoption of the new featured measures also will require title changes for tables presenting the new chained (1992) dollar series. The most noticeable such change will be the renaming of the terms "constant dollars," "fixed weights," and "1987 dollars" in table titles, series titles, and table headnotes. Table and series title changes are identified in table 1. Table headnotes, which identify the units used to present series in the tables, will generally be changed to substitute "chained (1992) dollars" for "1987 dollars."
As discussed in last month's SURVEY, the recognition of government investment will affect the presentation of NIPA tables in several ways, the most important of which are described here. In the presentation of the major expenditure, or product-side, components of GDP in tables 1.1, 1.2, 7.1, and 8.1, "government consumption expenditures and gross investment" replaces "government purchases."/9/ In addition, the new component will be redefined to include the consumption of general government fixed capital./10/ The presentation of consumption of fixed capital (CFC) in tables 1.9 and 1.10 will be revised as follows: The CFC will be redefined to include the CFC of government fixed capital, and detail for government CFC will be added to show separate series for general government and for government enterprises. The definition of the gross product of general government, which is shown in tables 1.7, 1.8, and 7.14, will be equal to the sum of compensation of general government employees plus CFC of general government fixed capital; it is now defined as equal only to compensation of employees. The presentation of government receipts and expenditures (tables 3.1, 3.2, 3.3, 3.18, and 3.19) will be revised as follows: "Government consumption expenditures," which excludes gross government investment but includes general government CFC, replaces "government purchases"; and the titles "current expenditures" and "current surplus (or deficit)" replace "expenditures" and "surplus or deficit," respectively, because gross investment is no longer included as an expenditure in the calculation of the surplus or deficit. For the tables that show government type-of-product detail (tables 3.7, 3.8, 3.9, 3.10. 3.11, 7.11, and 7.12), separate series for consumption expenditures and for gross investment will be shown. For table 5.1, "Gross Saving and Investment," government CFC, gross government saving (including the CFC), and gross government investment will be added, and the government surplus or deficit renamed. Finally, to show additional detail for gross government investment, new annual tables5.14, 5.15, and 7.13will be added.
Another change in presentation due to the recognition of government investment affects the compensation of employees and the structures estimates that will appear in tables showing gross government investment. In the new presentation, compensation of "force-account" employees of general governmentthat is, government employees engaged in the construction of new structureswill be included in the value of structures and excluded from compensation of employees. (Total compensation of general government employees will be shown as addenda items in tables 3.7, 3.8, 3.10, and 3.11.) This change will achieve consistency between government and private expenditures for structures. In the currently published NIPA tables, force-account compensation is included in compensation, except in the annual structures tables (5.6 and 5.7).
Several NIPA series will be redefined, though their series titles will not change. Gross product for the domestic business nonfarm and nonfarm less housing sectorsshown in tables 1.7, 1.8, and 7.14will be redefined using GDP instead of gross domestic income, which is GDP less the statistical discrepancy. Thus, the gross product of the nonfarm sector will equal GDP less the gross product of households and institutions, of general government, and of farm; the gross product of the nonfarm less housing product sector will equal nonfarm product less housing product. The change from gross domestic income to GDP reflects BEA's view that GDP, the product-side measure of output, is more accurate than gross domestic income, the corresponding income-side measure, and that therefore the redefined nonfarm product series will be more accurate. The change also will result in the deletion of the statistical discrepancy from tables 1.7, 1.8, 1.10, and 7.14. In addition, the estimates of real gross national income, now shown in table 1.10, and of real gross domestic income, to be added to table 1.10, will be calculated using the IPD's for GNP and GDP, respectively.
The calculation of the monthly personal saving rateshown in NIPA table 2.9 as personal saving as a percentage of disposable personal incomewill be changed./11/ Currently, the monthly rate is a centered 3-month moving average of personal saving as a percentage of a centered 3-month moving average of disposable personal income. The new rate will be personal saving for the month as a percentage of disposable personal income for that month, thus providing users with a saving rate for the most recent month.
A "redefinition" of many NIPA series will result from another definitional change to be introduced in this comprehensive revision. This change will redefine the Federal Government's contributions to the retirement programs of both civilian employees and military personnel. For the civilian retirement programs, contributions beginning with 1969 will now include payments to the Civil Service Retirement Fund for interest on unfunded liability. For the military retirement programs, contributions beginning with the fourth quarter of 1984, when a formal retirement trust fund was established, will now be the actual contributions to the fund. In the currently published series, contributions for all periods are "imputed" to equal the value of benefits that are paid out of the current operating budget. Changing the values of the Federal Government contributions to the civilian and military retirement programs will affect all government compensation and government consumption expenditures series. In addition, the change for the military programs will affect the "military retirement" line shown in the "imputations" table, which will appear as table 8.19.
New series will be added to other tables. The most important of these series will be additional detail for exports and imports of services, GDP less motor vehicle output, a national "saving rate," additional quarterly detail on corporate profits, and additional price indexes. Tables 1.1, 1.2, and 7.1 will be expanded to include detail on goods and on services for both exports and imports, and additional detail for both types of services will be shown in tables 4.3 and 4.4. An addenda will be added to tables 1.3 and 1.4 to show motor vehicle output, which will be derived from the auto and truck output series in tables 8.48.7, and to show GDP less motor vehicle output. Table 5.1 will be expanded to show total saving as a percentage of GNP. Table 6.16 will be expanded to show detail on profits of the following industries: Transportation; communications; electric, gas and sanitary services; wholesale trade; and retail trade. Table 7.2which now shows the price index for gross domestic purchases, BEA's featured measure of price changewill now include a price index for all food components of gross domestic purchases, a price index for all energy components of gross domestic purchases, and a price index for gross domestic purchases less food and energy. Similar indexes for personal consumption expenditures will also be added to table 7.4.
The preparation of constant-dollar estimates for one grouping of componentsindirect business tax and nontax liability, business transfer payments, subsidies, and the current surplus of government enterprisesas well as for national and domestic incomes will be discontinued. This change primarily reflects weaknesses in the underlying methodologies and a lack of user interest in these series./12/ As a result, the constant-dollar components listed above will be deleted from tables 1.10, 1.12, 1.13, 1.16, 8.8, and 8.10.
In addition to the new tables resulting from changing the featured measures of real output and prices and the recognition of government investment, two other tables will be added, one table will be deleted, and the frequency of publication will be changed for two tables. The first of the new tables (table 7.16) will show implicit price deflators (IPD's) for the inventory series now shown in tables 5.12 and 5.13; these deflators will provide information about prices used to estimates real inventories. The second new table (table 8.25) will show the relationship between the major source data for estimating wage and salary disbursementsBureau of Labor Statistics tabulations of wages and salaries of employees covered by State unemployment insuranceand the BEA wage and salary series in the NIPA's. The deleted table showed IPD's for GDP, GNP, net national product, and national income; most of these deflators will appear in other NIPA tables, and, as previously noted, the real national income series will be dropped. Table 3.1, "Government Receipts and Current Expenditures," will include quarterly data and will be published monthly instead of annually; table 7.12, "Price Indexes for National Defense Consumption Expenditures and Gross Investment by Type," will no longer include quarterly data and will be published annually instead of monthly.
The names of several NIPA series will be changed as a result of the comprehensive revision. Because these changes affect many tables, they are not mentioned in table 1; instead, the following list provides the new and old names for these series.
|New series name||Old series name|
|Wages and salary accruals||Wages and salaries|
|Exports and imports of goods||Exports and imports of merchandise|
|Agriculture, forestry, and fishing||Agriculture, forestry, and fisheries|
|Agricultural services, forestry, and fishing||Agricultural services, forestry, and fisheries|
|Tobacco manufactures||Tobacco products|
|Government consumption expenditures and gross investment||Government purchases|
|Government current expenditures||Government expenditures|
|Government current surplus or deficit (-), national income and product accounts||Government surplus or deficit (-), national income and product accounts|
"Availability of Redesigned Tables"
1. See "Preview of the Comprehensive Revision of the National Income and Product Accounts: BEA's New Featured Measures of Output and Prices," SURVEY 75 (July 1995): 2138, and "Preview of the Comprehensive Revision of the National Income and Product Accounts: Recognition of Government Investment and Incorporation of a New Methodology for Calculating Depreciation," SURVEY 75 (September 1995): 3341.
2. The "NIPA tables" discussed in this article refer to the following tables: Tables showing quarterly seasonally adjusted series that are published monthly in the SURVEY in "Selected NIPA tables"; tables showing monthly, annual, and quarterly not seasonally adjusted series that are published annually in the SURVEY, usually in the summer, as part of the annual revision of the NIPA's; and tables covering all NIPA series for past periods published in National Income and Product Accounts of the United States.
3. The base period will be 1992 because that is the latest year for which the current-dollar estimates will not be subject to revision until the next comprehensive revision. Quantity and price indexes for the most detailed component level will be expressed with 1992 equal to 100 and will provide the inputs used for calculating higher level chain-type measures.
4. The change in the featured measure of real output does not affect the presentation of any current-dollar NIPA series.
5. The following "real" series will continue to be calculated using deflation, the procedure in which the current-dollar value of the series is divided by an appropriate implicit price deflator: The chained value of gross national income (table 1.10), gross domestic income (table 1.10), command-basis exports of goods and services and receipts of factor income (table 1.11), gross and net domestic product of nonfinancial corporate business (table 1.16), and disposable personal income (tables 2.1 and 2.9). For the following series, real values will be calculated as the difference between chained-dollar series: Change in business inventories (tables 1.2, 1.4, 1.6, 5.3, 5.11, 8.5, 8.7, and 8.9), net exports (tables 1.2, 8.5, and 8.7), command-basis gross national product (table 1.11), foreign travel and other, net (table 2.5), net foreign travel (table 2.7), and nondefense consumption expenditures for nondurable goods and for Commodity Credit Corporation inventory change (table 3.8).
6. The calculation of implicit price deflators will be changed for this benchmark revision; see the box "Calculation of Implicit Price Deflators" on this page.
7. Index numbers to be presented in the revised NIPA tables will be expressed with one decimal place. The same indexes, expressed to three decimal places, will be used to calculate the chained (1992) dollar output series and the percent changes in the quantity and price indexes shown in table 8.1; these indexes will be available online from STAT-USA soon after each GDP release.
8. The benchmark-years-weighted indexes will not be included in the NIPA tables at this time. BEA will study calculations based on this and other index-number formulas and may decide to publish a new set of "alternative" measures to assist users in analyzing the effects of different formulas on measures of real output and prices.
9. The titles of this and other NIPA series affected by the recognition of government investment may differ slightly from those shown in last month's SURVEY.
10. The consumption of fixed capital (CFC) will be used as a partial measure of the value of services of general government fixed assets. Although this value should equal depreciation, or CFC, plus a net return on the assets, this return will be assumed to be zero. A similar estimate for the services of fixed assets for government enterprises will not be necessary. In the NIPA's, these government agencies, which cover a substantial proportion of their operating costs by selling goods and services to the public, are treated as businesses. Consequently, their income, the current surplus of government enterprises, includes the value of the services of their fixed assets. For a further discussion, see pages 3436 of the September 1995 SURVEY.
11. This change also will affect table 2 in the "Selected Monthly Estimates" section of the SURVEY and table 2 in the personal income and outlays news release.
12. Most of these constant-dollar estimates are prepared by base-year extrapolation; for example, base-period product taxes that were levied in 1987 are now extrapolated forward and backward to all periods by constant (1987) dollar estimates of sales of the product, even if the tax did not exist in all periods.