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Official Statistics and the Age of Turbulence

Official Statistics and the Age of Turbulence . J. Steven Landefeld May 12 th , 2008 2008 World Congress on National Accounts . National Accounts: An Essential Tool. Greenspan on the power of National Accounts: Framework for examining interdependencies

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Official Statistics and the Age of Turbulence

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  1. Official Statistics and the Age of Turbulence J. Steven Landefeld May 12th, 2008 2008 World Congress on National Accounts

  2. National Accounts: An Essential Tool • Greenspan on the power of National Accounts: • Framework for examining interdependencies • Framework for assessing relative importance: • Macro • Industry • Regional • International

  3. The Role of Official Statistics: Four Examples • Sustainable growth: • Capturing IT in trend growth in real GDP and productivity • Wage inflation?: • Measuring pensions and fringe benefits • The stock market bubble: • Irrational exuberance or mis-measured profits? • Hurricane Katrina: • Assessing the size of the problem

  4. Sustainable Growth: IT and Services

  5. Better Measuring Unit Labor Costs • Understanding growth in labor costs • Despite a robust economy –- and some increase in hourly wages – the increase in overall NIPA compensation and unit-labor costs seemed low. • FRB (and BEA) research on pension expenses showed that unit labor costs were increasing faster than official data showed. • Provided support for Fed’s progressive tightening between mid 2004 and mid 2006. • Revised NIPA estimates of supplements to wages, compensation, and unit labor costs to better reflect rising pension expenses.

  6. Irrational Exuberance or Measurement? Corporate Profits Estimates (2002 Annual Revision)vs. S&P Index DJIA Sept. 2000 10,968 (Indexed, 1995:II = 100) DJIA Oct. 2002 8,048 DJIA Sept. 1998 7,910 « « 0 Source: BEA press releases and Standard & Poor’s, Inc.

  7. The NIPA’s as a Framework: Impact of Katrina • Early estimates suggested a large impact from Katrina. • Analysis of BEA’s data indicated a relatively small impact. • “While these unfortunate developments (associated with Katrina) have increased uncertainty about near-term economic economic performance, it the Committee’s view that they do not pose a more persistent threat. “ • FOMC statement of 9/20/05 announcing another 25 basis point increase in the federal funds rate.

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