Refers to a major subdivision of units in the economy. In the NIPAs, the term is used both (1) in the classification of institutional units and (2) in the classification of economic activities.
(1) A group of institutional units that are similar in function, behavior, and objectives and whose accounts are consolidated to facilitate analysis. In the NIPAs, the three principal sectors for domestic production are business, households and institutions, and general government.
(2) In the North American Industry Classification System (NAICS), one of 20 major areas of economic activity; the sectors are generally at the two-digit NAICS level (though manufacturing, retail, and transportation and warehousing span several two-digit codes).