BEA to Release First Official GDP Estimates

The size of every county’s economy with industry detail will be officially released for the first time by the U.S. Bureau of Economic Analysis on Dec. 12.

BEA will estimate annual gross domestic product, or GDP, for the years 2001 through 2018 for more than 3,000 counties. The data will include contributions to GDP by 34 industries, such as manufacturing, retail trade, and health and social assistance.

Measuring GDP at the county level is a milestone in BEA’s efforts to better capture how economic activity is distributed across the nation. This new information, in high demand by data users, will complement the county personal income statistics BEA has produced since 1975.

GDP for counties and metropolitan statistical areas will be published together at 8:30 a.m. on Dec. 12 in a new joint release called Local Area Gross Domestic Product, 2018. It replaces the Gross Domestic Product by Metropolitan Area release of previous years.

BEA will continue to publish annual county and metro GDP statistics each December. In addition to industry contributions to GDP, the data will include current-dollar GDP; inflation-adjusted or real GDP; percent change from the preceding year; and quantity indexes.

The county statistics can be used for comparisons to other counties, metropolitan areas, state economies, or the nation overall.

They can answer questions such as:

  • What is the size of a county’s economy?
  • Is its economy growing or declining?
  • In which industries does the county specialize?
  • What industries are driving its growth?
  • What has been the county’s economic growth trend over time?

Business owners, county officials, and policymakers at all levels of government can use these statistics to make better-informed decisions about investments, economic development, or economic policies.

High-quality, consistently defined time series data for counties across the United States will aid research into topics such as the distribution of national economic output, local economic dynamics, and the effectiveness of economic development strategies.

Like county personal income data, the new GDP statistics will cover 3,113 areas, including county equivalents such as Louisiana’s parishes and Alaska’s boroughs, the District of Columbia, and the independent cities in Maryland, Missouri, Nevada, and Virginia. Kalawao County, Hawaii, and the smaller independent cities of Virginia are combined with adjacent counties.

GDP statistics are based on the place of production, such as the county where an office or factory is located, regardless of where the workers live. This differs from BEA’s personal income statistics, which measure the incomes of all people residing in a county, no matter where they work.

For example, a person who works in Los Angeles and commutes home to Riverside County, Calif., contributes to Los Angeles County’s GDP but Riverside County’s personal income data.

BEA released prototype county GDP data last December and sought evaluation and feedback from data users. The responses and further research led BEA to refine its methodology and add significant industry detail to the coming official release.

Wilbur Ross Leads Business Executives Across the Indo-Pacific

In support of the goal of President Donald J. Trump to increase American commercial activity across nations in the Indo-Pacific region, U.S. Secretary of Commerce Wilbur Ross led a business delegation including of 16 companies to Thailand, Indonesia, and Vietnam from November 3 to November 8. This mission spawned new partnerships as well as several business agreements, potentially representing billions in investments.

“The Trump Administration is building new relationships across the Indo-Pacific, creating a bright future, not only for the United States, but for countries across the region,” said Secretary of Commerce Wilbur Ross. “Last year, trade between Indo-Pacific nations and United States increased to a record of nearly $2 trillion – tying our great countries ever-closer together.”

In Vietnam, Secretary Ross and Prime Minister Nguyen Xuan Phuc witnessed the signing of five major business agreements and Memorandums of Understanding (MOUs) that will further deepen the U.S.-Vietnam trade partnership:

  • AES signed an MOU with the Ministry of Industry and Trade to solidify cooperation on the Son My 2 Combined Cycle Gas Turbine Power Plant. The Government of Vietnam approved the project in September 2019, representing an investment of $1.7 billion. Together with the $1.4 billion Son My LNG import terminal, the plant represents a total investment of almost $3.1 billion.
  • Varian Medical Systems signed an MOU with the National Institute of Medical Equipment & Construction for strategic cooperation on the maintenance and calibration of existing and future Varian Linear Accelerators. To further the delivery of effective cancer treatment in Vietnam, the U.S. Trade and Development Agency committed up to $1 million to support a critical training program for healthcare professionals connected to the expansion of oncology services.
  • Vietnam Airlines signed two deals during the ceremony. The first was a multi-year engine service agreement with Pratt & Whitney valued at approximately $1 billion. In addition, Vietnam Airlines signed a multi-million-dollar agreement with the technology company Sabre, adopting solutions that will strengthen their forecasting and inventory control capabilities.
  • Murphy Oil signed the Block 15-2/17 production sharing contract with Vietnam National Oil and Gas Group (PetroVietnam), PVEP, and SK Innovation.

Also, while in Hanoi, Secretary Ross and business delegates met with Minister of Industry and Trade Tran Tuan Anh, the American Chamber of Commerce, as well as other public and private sector stakeholders to discuss U.S.-Vietnam trade and investment cooperation.

During the stop in Jakarta, Secretary Ross and the delegation attended an event with AmCham Indonesia, which drew a full-house of companies and private industry stakeholders. The Secretary also held bilateral talks with President Joko Widodo and key cabinet officials including Coordinating Minister for Economic Affairs Airlangga Hartarto and Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan.

While in Bangkok, the business delegation met with Thai Government officials, 14 U.S. Chiefs of Mission in Asia, as well as potential partners from Thailand and the region. As the Secretary’s mission took place during the Second Indo-Pacific Business Forum (IPBF), the business delegation had an additional opportunity to network with over 1,000 business and government leaders from across Asia and the United States. The Secretary gave an address at the IPBF, while also speaking to U.S. Chamber/U.S. ASEAN Business Council and to AmCham Executive Directors from all over Asia.

Gross Domestic Product by Industry: Second Quarter 2019

The following information is from the Bureau of Economic Analysis (BEA): Professional, scientific, and technical services; real estate and rental and leasing; and mining were the leading contributors to the increase in U.S. economic growth in the second quarter of 2019, according to gross domestic product (GDP) by industry statistics released by the Bureau of Economic Analysis. The private goods- and services-producing industries, as well as the government sector, contributed to the increase. Overall, 14 of 22 industry groups contributed to the 2.0 percent increase in real GDP in the second quarter.

Real GDP and Real Value Added by Sector
For the professional, scientific, and technical services industry group, real value added—a measure of an industry’s contribution to GDP—increased 7.4 percent in the second quarter, after increasing 8.0 percent in the first quarter. The second quarter growth reflected increases to miscellaneous professional, scientific, and technical services, as well as computer systems design and related services.

Real estate and rental and leasing increased 2.6 percent, after increasing 0.8 percent. The second quarter growth primarily reflected an increase in other real estate, which includes offices of real estate agents and brokers.

Mining increased 23.5 percent in the second quarter, after increasing 26.0 percent. The second quarter growth primarily reflected an increase in oil and gas extraction.
Real Value Added by Industry

Other highlights

Real GDP growth slowed to 2.0 percent in the second quarter, from 3.1 percent in the first quarter. Finance and insurance was the leading contributor to the deceleration with real value added for the industry group increasing 2.0 percent in the second quarter, after increasing 20.9 percent in the first quarter.

Retail trade increased 0.2 percent in the second quarter, after increasing 8.8 percent, and was the second leading contributor to the slowdown. The deceleration was primarily attributed to a slowdown in other retail, which includes gasoline stations as well as building material and garden equipment and supplies dealers.

Utilities increased 18.1 percent in the second quarter, after decreasing 3.5 percent in the first quarter.

Gross output by industry

Economy-wide, real gross output—principally a measure of an industry’s sales or receipts, which includes sales to final users in the economy (GDP) and sales to other industries (intermediate inputs)—increased 2.0 percent in the second quarter. This reflected an increase of 2.9 percent for the private services-producing sector, and 4.4 percent for the government sector, while the private goods-producing sector decreased 1.4 percent. Overall, 15 of 22 industry groups contributed to the increase in real gross output.

Real Gross Output by Industry

Real gross output for retail trade increased 4.7 percent in the second quarter, after increasing 2.8 percent in the first quarter. The increase was primarily attributed to other retail, which includes nonstore retailers.

Real estate and rental and leasing increased 3.9 percent, after increasing 3.5 percent in the first quarter.

Professional, scientific, and technical services increased 6.5 percent in the second quarter, after increasing 0.2 percent in the first quarter. The increase was primarily attributed to an increase in miscellaneous professional, scientific, and technical services, which includes advertising, research and development, and engineering services.

Annual Update of the Industry Economic Accounts

The estimates released today reflect the results of the annual update of the Industry Economic Accounts. The update covers the first quarter of 2014 through the first quarter of 2019. Major improvements introduced with this update include:

Incorporation of results from the 2019 annual update of the National Income and Product Accounts, including a new quality-adjusted price for cellular phones, as well as new private data on video streaming revenue that enhances the coverage of streaming providers.

Incorporation of newly available and revised source data, including the Census Bureau’s Service Annual Survey, the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages, and the Department of Treasury’s Statistics of Income.

Benchmark and annul supply-use tables, as well as the full results of the release can be found on the BEA Web site. Additional information will be available in an article in the November 2019 issue of the Survey of Current Business.

Wilbur Ross Travels to the United Kingdom, Asia, and Australia to Advocate for American Workers

WASHINGTON – Following the United National General Assembly, U.S. Secretary of Commerce Wilbur Ross spent two weeks travelling to the United Kingdom, India, Singapore, and Australia to advocate for American workers and businesses, as well as to build upon the United States’ robust relationships with these nations.

“Across the world, the Trump Administration is building better commercial partnerships with dozens of countries,” said Secretary of Commerce Wilbur Ross. “Our efforts have led to countless new opportunities for American businesses and workers, further driving economic growth and job creation.”

During the Secretary’s visit to London, he joined roundtable meetings with British-American businesses on Brexit and future opportunities, participated in a space-focused discussion with U.S. satellite and aerospace firms, as well as dedicated time to speak with the media about the importance of the two nations’ partnership. He also appeared at an event hosted by Ambassador Johnson with American financial and legal institutions to discuss the future of U.S.-U.K. relations.

Beginning with his remarks at the World Economic Forum in New Delhi, Secretary Ross met with Minister of Commerce and Industry and Railways Piyush Goyal to stress the positive trends of the U.S.-India trade relationship. He later joined Minister of Finance Nirmala Sitharaman and Minister Goyal in bilateral meetings to advance U.S. commercial interests. Subsequently in Bangalore, Secretary Ross met with Indian Space Research Organisation Chairman K. Sivan to learn more about potential collaborations for U.S. and Indian space entities.

While in Singapore, Secretary Ross joined Prime Minister Lee Hsien Loong as well as Minister for Trade and Industry Chan Chun Sing to discuss U.S.-Singapore relations and the business environment for American private industries. The Secretary also participated in a meeting of the American Chamber of Commerce in Singapore to hear their thoughts on the future of the trade partnership.

After arriving in Australia, Secretary Ross met with Prime Minister Scott Morrison, Minister for Trade, Tourism and Investment Simon Birmingham, and Minister for Resources and Northern Australia Matt Canavan, to discuss American and Australian commercial collaboration. The Secretary also participated in an event hosted by the Space Industry Association of Australia in partnership with the Australian Capital Territory government, and delivered remarks before the American Chamber of Commerce in Australia. Additionally, Secretary Ross paid his respects to the U.S.-Australia alliance with a sunset wreath laying at the Australian War Memorial.

Real Consumer Spending Rises in July

BEA Graphic on Real Disposable Personal Income and Real Consumer Spending
Bureau of Economic Analysis (BEA)

Personal income increased 0.1 percent in July after increasing 0.5 percent in June. Wages and salaries, the largest component of personal income, increased 0.2 percent in July after increasing 0.5 percent in June.

Current-dollar disposable personal income (DPI), after-tax income, increased 0.3 percent in July after increasing 0.4 percent in June.

Real DPI, income adjusted for taxes and inflation, increased 0.1 percent in July after increasing 
0.3 percent in June.

Real consumer spending (PCE), spending adjusted for price changes, increased 0.4 percent in July after increasing 0.2 percent in June.

Spending on durable goods increased 1.1 percent in July after showing no change in June.

PCE prices increased 0.2 percent in July after increasing 0.1 percent in June. Excluding food and 
energy, PCE prices increased 0.2 percent in July, the same increase as in June.

Personal saving as a percent of DPI was 7.7 percent in July and 8.0 percent in June.

U.S. Metro Areas Exported $1.5 Trillion in Merchandise Across the World in 2018

Photo of cargo shipments at a U.S. port

Earlier this week, the U.S. Department of Commerce’s International Trade Administration released the 2018 goods export data for the nation’s 392 Metropolitan Statistical Areas (MSA), highlighting that U.S. metro areas exported a significant $1.5 trillion in merchandise across the world last year. In fact, from 2017 to 2018, exports from MSAs increased $110.3 billion – or 8.1 percent, and 259 metropolitan areas reported positive export growth, with 94 reaching record-level exports.

“The Trump Administration is committed to addressing trade imbalances, breaking down trade barriers, and providing U.S. companies with new reach in foreign markets,” said Under Secretary of Commerce for International Trade, Gilbert Kaplan. “With this increase in exports over the last year and the continued work of the Commercial Service, it is a fruitful time for American businesses.”

In 2018, 165 metropolitan areas supported more than $1 billion in merchandise exports; of these, 22 areas reported exports between $10 and $25 billion, and 12 eclipsed the $25 billion threshold. Additionally, 10 metropolitan areas from Texas and 5 metropolitan areas from California are included in the top 50 ranking of metropolitan areas by 2018 export value.

The Houston-The Woodlands-Sugar Land (Texas) metropolitan area topped the rankings with $120.7 billion in goods exports. As in 2017, this metropolitan area also showed the highest annual dollar growth in exports, expanding $25.0 billion from 2017 to 2018. The remaining top five metropolitan areas are: New York-Newark-Jersey City (New York-New Jersey-Pennsylvania) with exports of $97.7 billion; Los Angeles-Long Beach-Anaheim (California) with exports of $64.8 billion; Seattle-Tacoma-Bellevue (Washington) with exports of $59.7 billion; and Chicago-Naperville-Elgin (Illinois-Indiana-Wisconsin) with exports of $47.3 billion.

BEA: Direct Investment by Country and Industry, 2018

The Bureau of Economic Analysis released direct investment by country and industry 2018 statistics on July 24.

The U.S. direct investment abroad position, or cumulative level of investment, decreased $62.3 billion to $5.95 trillion at the end of 2018 from $6.01 trillion at the end of 2017. The decrease was due to the repatriation of accumulated prior earnings by U.S. multinationals from their foreign affiliates, largely in response to the 2017 Tax Cuts and Jobs Act. The decrease reflected a $75.8 billion decrease in the position in Latin America and Other Western Hemisphere, primarily in Bermuda. By industry, holding company affiliates owned by U.S. manufacturers accounted for most of the decrease.

The foreign direct investment in the United States position increased $319.1 billion to $4.34 trillion at the end of 2018 from $4.03 trillion at the end of 2017. The increase mainly reflected a $226.1 billion increase in the position from Europe, primarily the Netherlands and Ireland. By industry, affiliates in manufacturing, retail trade, and real estate accounted for the largest increases.

Other highlights from the direct investment statistics for 2018:

  • The U.S. direct investment abroad position decreased for the first time since 1982 due to repatriations of $776.5 billion by U.S. multinationals. By country, nearly half of the repatriations were from Bermuda and the Netherlands. By industry, U.S. multinationals in chemical manufacturing and computer and electronic products manufacturing repatriated the most.
  • The foreign direct investment in the United States position was concentrated in the U.S. manufacturing sector, which accounted for 40.8 percent of the position.