Overview of the Bureau of Economic Analysis

1. Overview of the Bureau of Economic Analysis Regional Accounts at the BEA Robert L. Brown Calibrating the Washington Economy: Data Tools for Assessing Our State and Local Economies Skagit Valley, Washington May 11, 2007

2. 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

3. 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

4. What do we produce? • Regional economic accounts • Gross domestic product (GDP) by state • Personal income for states and local areas • Regional economic multipliers

5. Regional Economic Data

6. 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

7. 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

8. 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

9. 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

10. 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

11. Relation of GDP by State to Personal Income (PI)

12. 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

13. 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

14. 106 Counties Account for Half of 2004 U.S. Personal Income

15. Personal income growth rates across 3111 counties, 2004-05

16. Uses of BEA’s regional income and product estimates • By the US Govt, to distribute over $215 billion in federal funds to states

17. BEA Regional Income & Product Accounts Estimates Used to Distribute $215 Billion in Federal Funds, FY 2005 [Funded Programs Are Shown in Millions of Dollars] Source: General Services Administration, Catalog of Federal Domestic Assistance, April 2006

18. 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

19. State Tax and Expenditure Limits

20. 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

21. 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

22. 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

25. Contact Information Robert L. Brown Chief, Regional Economic Measurement Division 202-606-9246 robert.brown@bea.gov