National Income and Product Accounts (NIPAs)
Calculated Totals
Other Accounts
Definitions
include table and row number, account ID for account names (in bold)
National Income and Product Accounts (NIPAs)
About 50 accounts, grouped into 22 types within 9 categories. Each account represents a transfer of funds between two economic sectors. The transactions are a use of funds for one sector, and a source of funds for the other sector.
These are slightly different than the official NIPA summary accounts.
Income Payments on Assets
Income receipts on assets reflects income that accrues to the providers of financial capital—holders of debt or stock.
Interest
Interest receipts. This measure differs from that used in financial accounting because it includes both the monetary receipts that are recorded on financial statements and the imputed receipts that are used in national economic accounting. These imputed interest receipts are included to account for the value of implicit financial services that are provided by commercial banks and by property and casualty insurance companies.
Interest and miscellaneous payments. This measure differs from the measure of interest payments used in financial accounting in two ways. First it includes any rents or royalties for natural resources paid to government that may be included in the measure of operating surplus in the business firm’s financial statements. Rents and royalties related to other items, such as building equipment, or patented research, are excluded from this measure because they are treated as purchases of intermediate goods and services. Second, much like the measure of interest receipts in this account, interest and miscellaneous payments includes imputed interest payments to account for the value of implicit financial services that are provided by commercial banks and by property and casualty insurance companies.
Interest (2–21)
Interest received by domestic private enterprises and includes both monetary and imputed interest receipts. (Interest received by private noninsured pension plans is recorded as being directly received by persons in personal income.)
Interest: Private Enterprise to Persons
Interest: Private Enterprise to Government
Interest and Miscellaneous Payments
Interest paid by domestic private enterprises.
Rents and royalties paid by private enterprises to government.
Interest: Persons to Persons
Interest: ROW to Persons
Personal Interest Income
Interest income (monetary and imputed) of persons, including individuals and nonprofit institutions serving households, from all sources.
Interest: Persons to ROW
Personal Interest Payments
All interest paid by individuals except mortgage interest, which is reflected in rental income of persons.
Interest and Miscellaneous Receipts
Monetary and imputed interest received by government on loans and investments from persons, from business, and from the rest of the world.
Miscellaneous receipts include Federal Outer Continental Shelf royalties and state and local rents and royalties.
(Interest received by government employee retirement plans is recorded as being received directly by persons in personal income.)
Interest: Government to Persons
Government Interest Payments
Monetary interest paid on public debt and other financial obligations.
Dividends
Dividends: ROW to Private Enterprise
Dividend Receipts from the Rest of the World
Receipts by U.S. residents of dividends from foreign corporations.
Earnings distributed by unincorporated foreign affiliates to their U.S. parents.
Dividends: Private Enterprise to ROW
Dividend Payments to the Rest of the World
Payments by U.S. corporations of dividends to foreign residents.
Earnings distributed by unincorporated U.S. affiliates to their foreign parents.
Dividends: Private Enterprise to Persons
Dividends: Private Enterprise to Government
Net Dividends
Payments in cash or other assets, excluding the corporations’ own stock, that are made by corporations located in the United States and abroad to stockholders who are U.S. residents. The payments are measured net of dividends received by U.S. corporations. Dividends paid to state and local governments are included.
Reinvested Earnings
Reinvested Earnings: ROW to Private Enterprise (Reinvested Earnings on U.S. Direct Investment Abroad)
Receipts by U.S. residents of their share of the reinvested earnings of their incorporated foreign affiliates and reinvested earnings of their unincorporated foreign affiliates.
Reinvested Earnings: Private Enterprise to ROW (Reinvested Earnings on Foreign Direct Investment in the United States)
Payments to foreign residents of their share of the reinvested earnings of their incorporated U.S. affiliates and reinvested earnings of their unincorporated U.S. affiliates. (These earnings are treated as income payments on assets because the decision to retain some of the earnings within a U.S. enterprise represents a deliberate investment decision on the part of the foreign investor.)
Transfers
Transfer Payments
Payments for which no current good or service is provided by the recipient, such as unemployment benefits.
Current transfer payments (net). These payments consist of cash or in-kind payments where nothing is received in return. However, current transfer payments exclude payments that are related to acquisition or disposal of fixed assets, such as capital gains or estate or gift taxes. These types of transfers are classified as capital transfers and included in the capital account. For the business firm, current transfer payments include fines and certain fees paid to government, the portion of insurance premiums that is not a payment for service (net of benefits received), charitable contributions to nonprofit organizations, and various other unrequited payments. With the exception of the adjusted value for insurance premiums, these items are included as in the measure of operating expenses in the firm’s financial statements.
Transfer Payments: Private Enterprise to Persons
Transfer Payments: Private Enterprise to Government
Transfer Payments: Private Enterprise to ROW
Business Current Transfer Payments (net)
Payments by private business for which no current services are performed.
Personal Current Transfer Receipts
Income payments to persons for which no current services are performed.
Net insurance settlements.
Transfer Payments: Persons to Government
Personal Current Transfer Payments to Government
Donations, fees, and fines paid to Federal, state, and local governments.
Transfer Payments: Government to ROW
U.S. Government military and nonmilitary grants to foreign governments.
Transfer Payments: Persons to ROW
Personal Current Transfer Payments to the Rest of the World
Personal remittances in cash and in kind to the rest of the world less such remittances from the rest of the world.
Social Benefit Transfers
Social Benefits Transfers: Government to Persons
Xxx
Social Benefits Transfers: Government to ROW (Government Social Benefits Payments to the Rest of the World)
U.S. Government transfers, mainly social security benefits, to former residents of the United States.
Other current transfer payments to the rest of the world (net) (4–6) consists of U.S. Government military and nonmilitary grants in cash and nonmilitary grants-in-kind to foreign governments.
Social Insurance Contributions
Social Insurance Contributions: Persons to Government
Social Insurance Contributions: ROW to Government
Employer contributions for government social insurance (see 3–16) and payments by employees, self employed, and other individuals who participate in the following government programs:
· Old age, survivors, and disability insurance (social security).
· Hospital insurance.
· Supplementary medical insurance, including the Medicare Prescription Drug benefit.
· Unemployment insurance.
· Railroad retirement.
· Veterans life insurance.
· Temporary disability insurance.
Imports and Exports
Export Payments: ROW to GDP
Goods and services that are sold or transferred by U.S. residents to residents of the rest of the world.
Import Payments: GDP to ROW
Goods and services that are sold or transferred by the rest of the world to U.S. residents. The value of imports is already included in the other expenditure components of GDP, because market transactions do not distinguish the source of the goods and services. Therefore, imports must be deducted in order to derive a measure of total domestic output. Deducting total imports purchased by all sectors from total exports, rather than deducting each sector’s imports from its total expenditures, provides an analytically useful measure—net exports—that enables one to examine the effects of foreign trade on the economy.
Taxes (Net)
Taxes
Taxes: Persons to Government
Personal Current Taxes
Tax payments (net of refunds) by U.S. residents that are not chargeable to business expense. Personal taxes includes taxes on income, including realized net capital gains, and on personal property. Personal contributions for government social insurance is not included. Taxes paid by U.S. residents to foreign governments and taxes paid by foreigners to the U.S. Government are both included in current taxes and transfer payments to the rest of the world from government (net).
Taxes on Production and Imports: GDP to Government
Includes
· Federal excise taxes and custom duties.
· State and local sales taxes.
· Property taxes (including residential real estate taxes).
· Motor vehicle licenses.
· Severance taxes.
· Special assessments.
· Other taxes.
All of these items except for sales and excise taxes are included in the measure of operating expenses in the business firm’s financial statements. Sales and excise taxes are included in the measure of taxes on production and imports because their value is added to sales on the other side of the ledger so that GDP is valued at the costs to final purchasers.
Taxes: Private Enterprise (Corporations) to Government (Taxes on Corporate Income Paid to Government)
Federal, state, and local government income taxes on all income subject to taxes; this income includes capital gains and other income excluded from profits before tax. The taxes are measured on an accrual basis, net of applicable tax credits.
Taxes: Private Enterprise to ROW (Taxes on Corporate Income Paid to the Rest of the World)
Nonresident taxes—that is, taxes paid by domestic corporations to foreign governments.
Taxes: ROW to Government
Xxx
Subsidies
Subsidies: Government to GDP
Monetary grants paid by government agencies to private business and to government enterprises at another level of government.
Saving and Investment
Gross Saving
Net saving plus the consumption of fixed capital. When gross saving is equal to or larger than consumption of fixed capital, the amount of saving is sufficient to cover the aging of fixed assets.
Gross Domestic Investment
A measure of gross capital formation— the purchase of new fixed assets plus the change in private inventories.
Gross investment. This measure differs from the measure of purchases of fixed assets in two ways. First, gross investment does not include purchases of land, which are treated as an acquisition of a nonproduced nonfinancial asset (discussed below). Second, since the national accounts treat software expenditures as investment, gross investment includes expenditures related to the purchase or “in-house” development of software used in production.
Acquisition less disposal of nonproduced nonfinancial assets. Nonproduced nonfinancial assets consist of nonfinancial assets that are necessary for production but have not themselves been produced. These assets primarily consist of natural resources, such as land, electromagnetic spectrum, and offshore drilling rights.
Saving
Saving: Persons to Domestic Capital
The current saving of
· Individuals (including proprietors and partnerships).
· Nonprofit institutions that primarily serve households.
· Life insurance carriers.
· Private noninsured welfare funds.
· Private noninsured pension plans.
· Publicly administered government employee retirement plans.
· Private trust funds.
Personal saving may also be viewed as the net acquisition of financial assets (such as cash and deposits, securities, and the change in life insurance and pension fund reserves), plus the net investment in produced assets (such as residential housing, less depreciation), less the net increase in financial liabilities (such as mortgage debt, consumer credit, and security credit), less net capital transfers received.
Saving: Government to Domestic Capital (Net Government Saving)
The net acquisition of financial assets by government and government enterprises.
The net investment in fixed assets (such as roads and highways, less depreciation).
The net government purchases of non-produced assets.
Less the net increase in financial liabilities.
Less net capital transfers.
Because of differences in coverage and timing, Federal Government net saving in the NIPAs is not equal to the well-known measure of the Federal Government’s unified budget surplus or deficit, which is an administrative cash-flow measure derived from the Treasury Department’s Federal budget statements and which includes both current and capital receipts and expenditures. The NIPA measure of government saving represents the portion of current expenditures that are covered by current receipts rather than by other methods of financing.
Undistributed Corporate Profits
Undistributed Corporate Profits IVA CCA: Private Enterprise to Domestic Capital
Corporate profits after tax with IVA and CCA less net dividends.
Inventory Valuation Adjustment
The difference between the cost of inventory withdrawals valued at acquisition cost and the cost of inventory withdrawals valued at replacement cost. The IVA is needed because inventories as reported by business are often charged to cost of sales (that is, withdrawn) at their acquisition (historical) cost rather than at their replacement cost (the concept underlying the NIPAs). As prices change, businesses that value inventory withdrawals at acquisition cost may realize profits or losses. Inventory profits, a capital-gains-like element in business income (corporate profits and nonfarm proprietors’ income), result from an increase in inventory prices, and inventory losses, a capital-loss-like element, result from a decrease in inventory prices. In the NIPAs, inventory profits or losses are shown as adjustments to business income; that is, they are shown as the IVA with the sign reversed. No adjustment is needed to farm proprietors’ income because farm inventories are measured on a current-market cost basis.
Capital Consumption Adjustment
Converts depreciation that is on a historical-cost (book value) basis—the capital consumption allowance (CCA)—to depreciation that is on a current-cost basis— consumption of fixed capital (CFC)—and is derived as the difference between private CCA and private CFC.
Wage Accruals
Wage and Salary Accruals
Monetary remuneration of employees, including
· Compensation of corporate officers.
· Commissions, tips, and bonuses.
· Voluntary employee contributions to certain deferred compensation plans, such as 401(k) plans.
· Employee gains from exercising nonqualified stock options.
· Receipts-in-kind.
· Miscellaneous compensation of employees.
Wage and Salary Accruals
Disbursements (1–3) and wage accruals less disbursements (1–4).
Disbursements
Wages and salaries as just defined except that retroactive wage payments are recorded when paid rather than when earned.
Wage Accruals less Disbursements (private): GDP to Government
Wage Accruals less Disbursements (private): GDP to Domestic Capital
Accruals less Disbursements
The difference between wages earned, or accrued, and wages paid, or disbursed. In the NIPAs, wages accruals is the measure used for gross domestic income, and wage disbursements is the measure used for personal income.
Inventories
Changes in inventories is based on the current costs that are used in national accounting rather than the historic costs that are often used in financial accounting.
Change in Private Inventories: Domestic Capital to GDP
Change in the physical volume of inventories owned by private business, valued in average prices of the period. (Differs from the change in the book value of inventories reported by most business; the difference is the inventory valuation adjustment.)
Investment
Fixed Investment: Domestic Capital to GDP (non-government)
Fixed Investment: Domestic Capital to GDP (government)
Replacements and additions to the capital stock, measured without a deduction for CFC. Covers all investment in fixed assets by private businesses and by nonprofit institutions in the U.S., regardless of whether the fixed asset is owned by U.S. residents. (Purchases of the same types of equipment, software, and structures by government agencies are included in government gross investment.) It excludes investment by U.S. residents in other countries.
Gross private domestic investment consists of purchases of fixed assets (equipment, software, and structures) by private businesses that contribute to production and have a useful life of more than one year, of purchases of homes by households, and of private business investment in inventories. Inventory investment, which is shown as “change in private inventories,” includes the value of goods produced during a period but not sold, less sales of goods from inventories that were produced in previous periods. It is measured as ending period less beginning period inventories valued at current prices (and is equivalent to additions to, less withdrawals from, inventories), Intermediate inputs, which become an integral part of the final product and do not contribute to future production, are not included in investment.
Nonresidential Structures
New construction (including own-account production), improvements to existing structures, expenditures on new nonresidential mobile structures, brokers’ commissions on sales of structures, and net purchases of used structures by private business and by nonprofit institutions from government agencies.
New nonresidential construction includes hotels and motels and mining exploration, shafts, and wells.
Nonresidential structures also includes equipment considered to be an integral part of a structure, such as plumbing, heating, and electrical systems.
Equipment and Software
Purchases by private business and by nonprofit institutions of new machinery, equipment, furniture, vehicles, and computer software used repeatedly, or continuously, in the processes of production for more than 1 year.
Also included are dealers’ margins on sales of used equipment to business and to nonprofit institutions; net purchases of used equipment from government agencies, from persons, and from the rest of the world; and own-account production of computer software.
For equipment that is purchased for both business and personal use (for example, motor vehicles), the personal-use portion is included in PCE.
Residential
All private residential structures and of residential equipment that is owned by landlords and rented to tenants.
Residential structures consists of new construction of permanent-site single family and multifamily units, improvements (additions, alterations, and major structural replacements) to housing units, expenditures on manufactured homes, brokers’ commissions on the sale of residential property, and net purchases of used structures from government agencies.
Residential structures includes some types of equipment that are built into the structure, such as heating and air conditioning equipment.
Foreign
Capital Account Transactions: Domestic Capital to Foreign Capital (Capital Accounts Transactions (net))
Capital transfers (mainly debt forgiveness and migrants’ transfers).
Transfers of non-produced nonfinancial assets to (or from) the rest of the world.
Cash or in-kind transfer payments to the rest of the world that are linked to the acquisition or disposition of a fixed asset; they provide an indirect measure of the net acquisition of foreign fixed assets by U.S. residents less the net acquisition of U.S. fixed assets by the rest of the world.
Net Lending/(Borrowing), NIPAs: Domestic Capital to Foreign Capital
An indirect measure of the net acquisition of foreign assets by U.S. residents less the net acquisition of U.S. assets by foreign residents.
When this item is negative, domestic investment cannot be completely funded from the Nation’s own saving. When this item is positive, domestic saving is greater than what is needed for the Nation's own investment.
Balance on Current Account, NIPAs: Foreign Capital To Row
The acquisition of foreign assets by U.S. residents less the acquisition of U.S. assets by foreign residents. It includes the statistical discrepancy in the balance of payments accounts.
Because the balance on the current account includes the income receipts and payments and current taxes and transfer transactions with the rest of the world, it is a broader measure than the trade deficit (or surplus) of goods and services published jointly each month by the Census Bureau and BEA.
The balance on the current account shows the extent to which current payments to the rest of the world are funded by current receipts; a positive balance suggests that current receipts from the rest of the world exceed current payments to the rest of the world, thereby allowing U.S. residents to lend or acquire other assets abroad. Conversely, any deficit must be funded through borrowing or the disposal of assets. Thus the balance on the current account can be viewed as the acquisition of foreign assets by U.S. residents less the acquisition of U.S. assets by foreign residents.
Statistical Discrepancy
Statistical Discrepancy: GDP to Domestic Capital
Arises because the two sides are estimated using independent and imperfect data.
In theory, GDI should be equal to GDP. In practice, differences in the source data used to estimate the two measures result in a “statistical discrepancy,” which, in the NIPAs, is calculated as GDP less GDI. Because the source data used to develop the product-side estimates of the account are based on more comprehensive surveys and censuses, BEA considers them more reliable. Therefore, the statistical discrepancy appears as a component on the income side of the account.
The statistical discrepancy can be viewed as actual (positive or negative) income that is not captured by the data used to measure GDI and, therefore, not distributed to the sectors. Instead, it is shown as a source of (positive or negative) saving in this account.
Consumption
Consumption of Goods and Services
Consumption: Persons to GDP
Goods and services purchased by U.S. residents.
Personal Consumption Expenditures (PCE) consists mainly of purchases of new goods and of services by individuals from private business.
In addition, PCE includes purchases of new goods and of services by nonprofit institutions (including compensation of employees), net purchases of used goods by individuals and nonprofit institutions, and purchases abroad of goods and services by U.S. residents.
PCE also includes purchases of certain goods and services provided by general government and government enterprises, such as tuition payments for higher education, charges for medical care, and charges for water and other sanitary services.
Finally, PCE includes imputed purchases that keep PCE invariant to changes in the way that certain activities are carried out—for example, whether housing is rented or owned, whether financial services are explicitly charged, or whether employees are paid in cash or in kind.
These goods and services include imputed expenditures on items such as the services of housing by a homeowner (the equivalent of rent), financial and insurance services for which there is no explicit charge, and medical care provided to individuals and financed by government or by private insurance.
Consumption: Government to GDP
Government Consumption Expenditures and Gross Investment
Government sector final demand. Does not include current transactions of government enterprises, current transfer payments, interest payments, subsidies, or transactions in financial assets and in non-produced assets such as land.
Government consumption expenditures and gross investment measures final expenditures by Federal, state, and local governments. “Government consumption expenditures” represents the value of goods and services provided to the public by governments (such as defense or education). “Gross investment” consists of government purchases of equipment, software, and structures to use in producing those goods and services. These expenditures do not include government spending for social benefit programs (such as Medicaid), interest payments, and subsidies.
Current Consumption Expenditures by General Government
Goods and services that are produced by general government, less sales to other sectors and own-account investment. The value of government production, that is, government’s gross output, is measured by the cost of inputs: Compensation of employees, CFC (a partial measure of the services of government capital), and intermediate goods and services purchased.
Gross Investment by Both General Government and Government Enterprises
Purchases of new structures and of equipment and software by both general government and government enterprises, net purchases of used structures and equipment, and own-account production of structures and of software.
Consumption of Fixed Capital
This measure replaces the measures of depreciation in the individual business accounts. Although the two measures are closely related, they differ in two important ways. First, CFC is based on a consistent set of service lives and empirically based depreciation schedules rather than on the various conventions that are used in financial accounting. Second, CFC is based on the current costs that are used in national accounting rather than the historical costs that are often used in financial accounting.
Consumption of Fixed Capital: GDP to Domestic Capital
Charge for the using up of private and government fixed capital located in the United States. Decline in the value of the stock of fixed assets due to wear and tear, obsolescence, accidental damage, and aging.
For most types of assets, estimates of CFC are based on geometric depreciation patterns; empirical studies on the prices of used equipment and structures in resale markets have concluded that a geometric pattern of depreciation is appropriate for most types of assets.
For general government and for nonprofit institutions that primarily serve individuals, CFC is recorded in government consumption expenditures and in PCE, respectively, as a partial measure of the value of the current services of the fixed assets owned and used by these entities.
Private capital consumption allowances consists of tax return-based depreciation charges for corporations and nonfarm proprietorships and of historical cost depreciation (calculated by BEA using a geometric pattern of price declines) for farm proprietorships, rental income of persons, and nonprofit institutions. Private capital consumption adjustment is the difference between private capital consumption allowances and private CFC.
Compensation and Net Operating Surplus
Wage and Salary
Wage and Salary: GDP to Persons
Wage and Salary: GDP to ROW
Wage and Salary: ROW to Persons
Compensation of Employees, Paid
Income accruing to employees as remuneration for their work for domestic production; includes compensation paid to the rest of the world and excludes compensation received from the rest of the world.
The sum of wage and salary accruals and of supplements to wages and salaries.
Wages and salaries are broadly defined to include commissions, tips, and bonuses; voluntary employee contributions to deferred compensation plans, such as 401(k) plans; employee gains from exercising stock options; and receipts-in-kind that represent income.
Supplements to Wages and Salaries
Employer Contribution for Employee Pension/Insurance: GDP to Persons
Employer payments (including payments in kind) to
· Private pension and profit-sharing plans.
· Publicly administered government employee retirement plans.
· Private group health and life insurance plans.
· Privately administered workers’ compensation plans.
· Supplemental unemployment benefit plans.
Employer Contribution for Govt Social Insurance: GDP to Persons
Employer payments under the following Federal Government and state and local government programs
· Old age, survivors, and disability insurance (social security).
· Hospital insurance.
· Unemployment insurance.
· Railroad retirement.
· Pension benefit guaranty.
· Veterans life insurance.
· Publicly administered workers’ compensation.
· Military medical insurance.
· Temporary disability insurance.
Net Operating Surplus
This measure is defined as the residual claim against gross value added after the charges directly related to production—that is, compensation of employees, taxes on production and imports (less subsidies), and consumption of fixed capital—have been deducted. It measures the surplus or deficit accruing from production before taking account of any interest and dividends receivable on financial assets owned by the corporation; payments to those with financial claims on the firm, such as interest or dividends payable; and other nonoperating payments, such as current business transfer payments and taxes on corporate income. The net operating surplus reflects the net return to assets that the firm uses in production.
Net Operating Surplus: GDP to Private Enterprise
Profits-like measure that shows business income after subtracting the costs of compensation of employees, taxes on production and imports (less subsidies), and CFC from gross product (or value added), but before subtracting financing costs (such as net interest) and business current transfer payments.
Current Surplus of Government Enterprises: GDP to Government
Current operating revenue and subsidies received from other levels of government less their current expenses. In the calculation of their current surplus, no deduction is made for net interest paid.
Other Private Enterprise Uses
Proprietors' Income
Proprietors' Income IVA CCA: Private Enterprise to Persons
The current-production income (including income in kind) of sole proprietorships and partnerships and of tax-exempt cooperatives.
The imputed net rental income of owner occupants of farm and nonfarm dwellings is included in rental income of persons.
Proprietors’ income excludes dividends and monetary interest received by nonfinancial business and rental income received by persons not primarily engaged in the real estate business; these incomes are included in dividends, net interest, and rental income of persons.
Rental Income
Rental Income CCA: Private Enterprise to Persons
Net current production income of persons (except those primarily engaged in the real estate business) from the rental of real property.
Imputed net rental income of owner occupants of farm and nonfarm dwellings.
Royalties received by persons from patents, copyrights, and rights to natural resources.
Calculated Totals
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Gross Domestic Product
The market value of the goods and services produced by labor and property located in the United States. Suppliers— that is, the workers and, for property, the owners—may be either U.S. residents or residents of the rest of the world.
Gross Domestic Income
The costs incurred and the incomes earned in the production of GDP. GDP and GDI differ because their components are estimated using largely independent and less than perfect source data.
Gross National Product
The market value of the goods and services produced by labor and property supplied by U.S. residents. The difference between GDP and GNP is net receipts of income from the rest of the world.
Net Domestic Product
The net market value of goods and services attributable to the labor and property supplied by U.S. residents and is equal to GNP less CFC. (NDP may be viewed as an estimate of sustainable product, which is a rough measure of the level of consumption that can be maintained while leaving capital assets intact.)
Net National Product
The net market value of goods and services attributable to the labor and property supplied by U.S. residents and is equal to GNP less CFC.
National Income
All net incomes (net of CFC) earned in production.
Gross National Income
National income plus CFC. (GNI and GNP also differ by the statistical discrepancy.)
Personal Income
Income received by persons from all sources.
Disposable Personal Income
Personal income less personal current taxes.
Final Sales of Domestic Product
GDP less change in private inventories; equivalently, it is the sum of PCE, private fixed investment, government consumption expenditures and gross investment, and net exports of goods and services.
Gross Domestic Purchases
The market value of goods and services purchased by U.S. residents, regardless of where those goods and services were produced. It is GDP less net exports of goods and services; equivalently, it is the sum of PCE, gross private domestic investment, and government consumption expenditures and gross investment.
Final Sales to Domestic Purchasers
Gross domestic purchases less change in private inventories.
Corporate Profits with IVA and CCA
The net current production income of organizations treated as corporations in the NIPAs. These organizations consist of all entities required to file Federal corporate tax returns, including
· mutual financial institutions and cooperatives subject to Federal income tax,
· private noninsured pension funds,
· nonprofit institutions that primarily serve business,
· Federal Reserve banks, and
· federally sponsored credit agencies.30
With several differences, this income is measured as receipts less expenses as defined in Federal tax law. Among these differences are the following:
· Receipts exclude capital gains and dividends received,
· expenses exclude depletion and capital losses and losses resulting from bad debts,
· inventory withdrawals are valued at replacement cost, and
· depreciation is on a consistent accounting basis and is valued at replacement cost using depreciation profiles based on empirical evidence on used asset prices that generally suggest a geometric pattern of price declines.
Corporate profits is included on a national income basis, which is defined as the income of U.S. residents; therefore the profits component includes income earned abroad by U.S. corporations and excludes income earned in the United States by the rest of the world.
Only corporate profits (which is similar to net operating surplus but is measured after the deduction of interest payments) does not have a counter-entry on the sources side of a separate income and outlay account; a separate account for corporations is unnecessary because the detailed entries in account 2 show the use of this income for tax payments, dividend payments, and for undistributed corporate profits (which can be thought of as a measure of corporate saving). (Likewise, a separate account for the business sector as a whole—that is, private enterprises and government enterprises—is unnecessary because the sources and uses of government enterprise income are reflected in account 4.)
Corporate profits is one of the most closely followed measures of economic activity because it provides a summary measure of U.S. corporate financial health. Further, undistributed profits, a source of retained earnings, provide much of the funding for investment in structures and equipment that contributes to the Nation’s productive capacity.
Corporate profits. The measure of corporate profits includes adjustments so that it is based on the inventory valuation and depreciation concepts that are used in national economic accounting.
Other Accounts
FRED Accounts
Population and Employment
Money Supply
Interest Rates
BOL Accounts
Definitions
Population
The total population of the United States, including the Armed Forces overseas and the institutionalized population. The monthly estimate is the average of Census Bureau survey estimates for the first of the month and the first of the following month; the quarterly and annual estimates are the averages of the relevant monthly estimates.
Domestic
50 states and the District of Columbia. This treatment aligns GDP with other U.S. statistics, such as population and employment. Transactions between the United States and Puerto Rico, the U.S. territories, and the Northern Mariana Islands are included in the “rest-of-the-world” sector. (However, in BEA’s international transactions accounts, Puerto Rico, the U.S. territories, and the Northern Mariana Islands are treated as part of the United States.)
Domestic measures cover activities that take place within the geographic borders of the United States. National measures cover activities that are performed using resources supplied by U.S. residents.
U.S. Residents
Individuals, governments, business enterprises, trusts, associations, nonprofit organizations, and similar institutions that have the center of their economic interest in the United States and that reside or expect to reside in the United States for 1 year or more. (For example, business enterprises residing in the United States include U.S. affiliates of foreign companies.) In addition, U.S. residents include all U.S. citizens who reside outside the United States for less than 1 year and U.S. citizens residing abroad for 1 year or more who meet one of the following criteria: Owners or employees of U.S. business enterprises who reside abroad to further the enterprises’ business and who intend to return within a reasonable period; U.S. Government civilian and military employees and members of their immediate families; and students who attend foreign educational institutions.
Foreign Residents
Those residing and pursuing economic interests outside the United States. They also include international institutions located in the United States, foreign nationals employed by their home governments in the United States, and foreign affiliates of U.S. companies.
Goods
Tangible products that can be stored or inventoried.
In PCE, in exports, in imports, and in government intermediate goods and services purchased, durable goods have an average life of at least 3 years. In fixed investment, equipment and software consists of goods that have an average life of at least 1 year. In change in private inventories, goods held by manufacturing and trade establishments are classified as durable goods or nondurable goods in accordance with the classification of the industry of the establishment holding the inventories. Inventories held by construction establishments are classified as durable goods. Inventories held by establishments other than those in manufacturing, trade, and construction are classified as nondurable goods.
Durable Goods
Tangible commodities that can be stored or inventoried and that have an average life of at least 3 years.
Nondurable Goods
All other tangible commodities that can be stored or inventoried. Nondurable goods and services are generally consumed fully within a year. Durable goods provide services over longer periods of time.
Services
Commodities that cannot be stored and that are consumed at the place and time of purchase.
Structures
Products that are usually constructed at the location where they will be used and that typically have long economic lives.
Fixed Assets
Produced assets that are themselves used repeatedly, or continuously, in processes of production for more than 1 year. Fixed assets consist of equipment, software, and structures (including, by convention, owner-occupied housing); consumer durable goods are not included.
Fixed Investment
The net acquisition of fixed assets.
Purchases of new durable goods and structures by businesses or government for use in production are treated as gross fixed investment, as are purchases of new residential housing. Purchases of durable goods by individuals, on the other hand, are treated as consumption in the NIPAs, rather than as investment, in accordance with the NIPA convention that nonmarket household production is outside the scope of GDP.
For fixed assets and consumer durables, purchases of consumer durables are treated as investment in assets, and these assets depreciate over time. BEA’s use of the term “capital” in reference to this stock of fixed assets is different from the conventional use of the term to refer to financial holdings
Produced Assets
Nonfinancial assets that have come into existence as outputs from a production process; they include fixed assets and private inventories.
Nonproduced Assets
Nonfinancial assets that are used for production but have not themselves been produced; they include naturally occurring assets, such as land and mineral deposits.
Depreciation
Depreciation, or the consumption of fixed capital, is defined as the deductions from the capital stock over the period due to age, wear and tear, accidental damage, and obsolescence. Thus, depreciation is a charge against production—that is, it reflects an amount that would need to be set aside to eventually replace fixed assets as they are used up in the production process—and is therefore a component of the NIPAs income-side measure of output. Its inclusion in GDI ensures that the measure fully reflects the income-side value of final goods and services, but it also suggests that the measure overstates the capabilities of the economy to produce goods and services for consumption or to add to the capital stock. Thus, “net” measures that are provided in the NIPAs—that is, measures that exclude depreciation, such as net domestic product (NDP) and net domestic investment—are preferred for many analyses. Nevertheless, GDP remains the most commonly cited statistic of the overall level of economic activity.
Inventories
A key component of investment, and thus GDP, is the change in private inventories, which reflects the value of goods that have been produced but not yet sold. For a given period, additions to inventories reflect production in that period and so are included in GDP, while withdrawals from inventories reflect production in past periods and so are excluded from GDP.
In the NIPAs, additions to, less withdrawals from, inventories is measured as ending period less beginning period inventories and recorded as a single item, “change in inventories.”
