Health United States 2020-2021

National Income and Product Accounts (NIPA)

Bureau of Economic Analysis (BEA)

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Overview

NIPA is a set of economic accounts that provides detailed measures of the value and composition of national output and the incomes generated in the production of that output. Essentially, NIPA provides a detailed snapshot of the myriad transactions that make up the economy, such as buying and selling goods and services, hiring labor, investing, renting property, and paying taxes. NIPA estimates show U.S. production, distribution, consumption, investment, and savings.

The best-known NIPA measure is the gross domestic product (GDP), which is defined as the market value of the goods, services, and structures produced by the economy in a given period. NIPA calculates GDP as the sum of the final expenditure components: personal consumption expenditures, private fixed investment, change in private inventories, net exports of goods and services, government spending, and government investment. However, GDP is just one of many economic measures presented in NIPA. Another key NIPA indicator presented in Health, United States is the implicit price deflator for GDP.

The conceptual framework of NIPA is illustrated by seven summary accounts: domestic income and product account, private enterprise income account, personal income and outlay account, government receipts and expenditures account, foreign transactions current account, domestic capital account, and foreign transactions capital account. These summary accounts record a use (or expenditure) in one account for one sector and a corresponding source (or receipt) in an account of another sector or of the same sector. This integrated system provides a comprehensive measure of economic activity in a consistently defined framework without double-counting.

Coverage

Source data for NIPA domestic estimates cover all 50 states and the District of Columbia. The U.S. national income and product statistics were first presented as part of a complete and consistent double-entry accounting system in the summer of 1947.

Methodology

NIPA estimates are revised quarterly, annually, and quinquennially. For GDP and most other NIPA series, a set of three current quarterly estimates is released each year. Quarterly estimates provide the first look at the path of U.S. economic activity. Annual revisions of NIPA are usually carried out each summer. These revisions incorporate source data that are based on more extensive annual surveys, annual data from other sources, and later revisions to the monthly and quarterly source data, and they generally cover the 3 previous calendar years. Comprehensive revisions are carried out at about 5-year intervals and may result in revisions that extend over many years. These estimates incorporate all of the best available source data, such as data from the quinquennial U.S. Economic Census.

NIPA measures are built up from a wide range of source data using a variety of estimating methods. To ensure consistency and accuracy, NIPA uses various adjustment and estimation techniques to estimate data. Three general types of adjustments are made to the source data incorporated in NIPA estimates: 1) adjustments needed for the data to conform to appropriate NIPA concepts and definitions, 2) adjustments to fill gaps in coverage, and 3) adjustments involving time of recording and valuation. Source data must be adjusted occasionally to account for special circumstances that affect accuracy of the data. For example, quarterly and monthly NIPA estimates are adjusted seasonally at the detailed series level when the series demonstrate statistically significant seasonal patterns. Source data may also be used as indicators to extrapolate annual estimates. For more information, see “An Introduction to the National Income and Product Accounts. Methodology Papers: U.S. National Income and Product Accounts,” available from: https://www.bea.gov/sites/default/files/methodologies/mpi1_0907.pdf; and “Concepts and Methods of the U.S. National Income and Product Accounts,” available from: https://www.bea.gov/resources/methodologies/nipa-handbook.

Issues Affecting Interpretation

NIPA source data and estimates are revised frequently. Data are released at different times, estimates are updated as they become available, new concepts and definitions are incorporated, and source data may change due to improvements in collection and new methodologies. As a result, major estimates, such as GDP and its major components, undergo frequent revision, and historical data are changed. For more information, see the BEA (NIPA) website at: https://apps.bea.gov/iTable/index_nipa.cfm.

References

 

For more information, see the BEA website at: https://www.bea.gov/.