The United States GDP – Produced by the BEA
Now that you have a complete understanding of how the GDP components, how GDP is calculated and nominal vs real GDP, lets look at the economic indicator that gives us in depth details on the United States GDP.
The National Income and Product Accounts (NIPAs) produced by the Bureau of Economic Analysis (BEA) have become a mainstay of modern macroeconomic analysis of the U.S. economy. In fact, in 2000 the Commerce Department named the NIPAs and their marquee measure, gross domestic product (GDP), â€œits achievement of the century.â€ â€“ Bureau of Economic Analysis, An Introduction to the National Income and Product Accounts.
What is the NIPA?
â€œThe NIPAs are a set of economic accounts that provide information on the value and composition of output produced in the United States during a given period and on the types and uses of the income generated by that production.â€ – Concepts and methods of the U.S. National Income and Product AccountsÂ (U.S. Bureau of Economic Analysis, December 2015)
Three Components of NIPA
The US national economic accounts are comprised of three components:1
- The National Income and Product Account (NIPA);
- The industry (input-output) accounts, also prepared by the BEA; and
- The financial flow of funds account prepared by the Federal Reserve.
Seven Summary Accounts of NIPA
The NIPA is comprised of seven summary accounts1:
- Domestic Income and Product Account
- Private Enterprise Income Account
- Personal Income and Outlays Account
- Government Receipts and Expenditures Account
- Foreign Transactions Current Account
- Domestic Capital Account
- Foreign Transactions Capital Account.
The Domestic Income and Product Account uses two methods of computing GDPÂ (source BEA)Â â€“ the incomes approach (left side of the account) and the expenditure approach (right side of the account).
The expenditures approach, which we have already studied, is employed to compute the final goods and services consumed by households, firms, government, and foreign customers. As we have seen, it is the sum of personal consumption expenditures, gross private fixed investments, net exports of goods and services and government expenditures. We will look at these subcomponents in much more detail later.
BEA Releases Three Estimates
The Bureau of Economic Analysis (BEA) of the Department of Commerce releases three separate estimates of the quarterly GDP on three different datesâ€”the advance, preliminary and revised estimates.
The first report is the advance estimate, which is released in the first month of the following quarter. So the first report for Q1 (January â€“ March) is released in April. This report is incomplete and subject to large revisions.
The next two reports are the preliminary and revised estimate reports which are basically revisions of the advance report and these revisions can be quite substantial.
Decomposing the Components Of The Gross Domestic Product
Figure: GDP Composition 2015
Figure: GDP Composition 2015