Many other sources contribute to the estimates of GDP. Information on energy comes from the U. Department of Transportation and Department of Energy. Surveys of landlords provide information about rental income. The Department of Agriculture collects statistics on farming.
All of these bits and pieces of information arrive in different forms, at different time intervals. That is, quarterly GDP estimates what annual GDP would be if the trend over the three months continued for twelve months. As more information comes in, these estimates are updated and revised. In July, roughly updated estimates for the previous calendar year are released.
Then, once every five years, after the results of the latest detailed five-year business census have been processed, the BEA revises all of the past estimates of GDP according to the newest methods and data, going all the way back to You can even email your own questions!
The Expenditure Approach divides GDP based on who is doing the spending: Consumption households , Investment businesses and households , Government Spending governments and Net Exports the rest of the world.
GDP can also be measured by examining what is produced , instead of what is demanded. Everything that is purchased must be produced first.
Table 2 breaks down GDP a different way, based on the type of output produced: durable goods , nondurable goods , services , structures , and the change in inventories. Consumer Expenditure from the expenditure approach you read about above consists of spending on durable goods, nondurable goods, and services. The same thing is true of Government and Net Export Expenditures. Investment Expenditures is a combination of durable goods like business equipment and structures e.
Figure 3 provides a visual representation of the five categories used to measure GDP by type of product. Note that whether you decompose GDP into expenditure components or by type of product the total is exactly the same. Services are the largest single component of GDP, representing over half.
Figur e 4. Types of Product. In thinking about what is produced in the economy, many non-economists immediately focus on solid, long-lasting goods, like cars and computers. Goods that last three or more years are called durable goods. Goods that last less than three years are called nondurable goods. By far the largest part of GDP, however, is services. Moreover, services have been a growing share of GDP over time. A detailed breakdown of the leading service industries would include healthcare, education, and legal and financial services.
It has been decades since most of the U. Instead, the most common jobs in a modern economy involve a worker looking at pieces of paper or a computer screen; meeting with co-workers, customers, or suppliers; or making phone calls.
Even within the overall category of goods, Table 2 shows that long-lasting durable goods like cars and refrigerators are about the same share of the economy as short-lived nondurable goods like food and clothing. For this reason, it is unsurprising that most investors and businesses pay a great amount of attention to consumer spending figures and patterns. Investors and businesses closely follow consumer spending statistics when making forecasts. Modern governments and central banks often examine consumer spending patterns when considering current and future fiscal and monetary policies.
Consumer spending is often measured and disseminated by official government agencies. Additionally, the BEA estimates consumer spending for monthly, quarterly, and annual periods. Most official aggregate metrics, such as gross domestic product GDP , are dominated by consumer spending.
Others, including the much newer gross domestic expenditures GDE or "gross output" GO reported by the BEA, also include the "make" economy and are less influenced by short-term consumer spending. By its very nature, consumer spending only reveals the "use" economy, or finished goods and services.
This is distinguished from the "make" economy, referring to the supply chain and intermediate stages of production necessary to make finished goods and services. The real GDP is considered a key economic indicator to watch. If consumers provide fewer revenues for a given business or within a given industry, companies must adjust by reducing costs, wages, or innovating and introducing newer and better products and services.
Companies that do this most effectively earn higher profits and, if publicly traded, tend to experience better stock market performance.
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Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Introduction to Economics. Also known as personal consumption expenditures, these statistics are a popular way to gauge the economy's strength. More detailed data on what people buy is released annually. Consumer Spending. September 0. Current Release. Interactive Data. Summary Tables Annual, Quarterly, and Monthly estimates Underlying Detail Tables Annual, Quarterly, and Monthly estimates with additional detail - Note: Detailed level estimates are more likely to be either based on judgmental trends or on less reliable source data than estimates at higher level aggregates.
Supplemental Data and Additional Information. Articles, Papers, and Presentations. Does the Bureau of Economic Analysis BEA publish relative-importance weights used in the derivation of chain-type quantity and price indexes for personal consumption expenditures PCE?
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