Method for Estimating Exports & Imports of Goods & Services by BEA, Study notes of Statistics

Download Method for Estimating Exports & Imports of Goods & Services by BEA and more Study notes Statistics in PDF only on Docsity! CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES (Updated: December 2021) Definitions and Concepts Recording in the NIPAs Overview of Source Data and Estimating Methods Benchmark-year and nonbenchmark-year estimates Current quarterly estimates Adjustments and other differences between the NIPA and ITA estimates Quantity and price estimates Table 8.A—Summary of Methodology for Exports of Goods and Services Table 8.B—Summary of Methodology for Imports of Goods and Services Net exports of goods and services is the difference between U.S. exports of goods and services and U.S. imports of goods and services. Exports measures the portion of total U.S. production of goods and services—gross domestic product (GDP)—that is provided to the rest of the world; thus, movements in exports reflect changes in foreign demand for U.S.-produced goods and services. Imports measures the portion of total U.S. expenditures—gross domestic purchases—that is accounted for by goods and services provided by the rest of the world; thus, movements in imports reflect changes in domestic demand for foreign-produced goods and services. The impact of imports on the U.S. economy depends on the degree to which they act as substitutes for, or as complements to, domestic production. Together, the two measures reflect the extent to which the United States participates in the global marketplace, which provides broad opportunities for specialization and other economic efficiencies. As the difference between the two, net exports represents the gap between U.S. domestic production and U.S. domestic demand and the extent to which a surplus or deficit of domestic production relative to domestic demand is addressed by foreign markets. Net exports in the national income and product accounts (NIPAs) corresponds to the measure “balance on goods and services”—commonly referred to as the “trade deficit” (when imports exceeds exports) or the “trade surplus” (when exports exceeds imports)—in the international transactions (or balance of payments) accounts (ITAs), also produced by BEA.0F 1 The two measures are very similar, but they differ in coverage, definitions, and in timing of revisions (see the section “Adjustments and other differences between the NIPA and ITA estimates). Net exports is also a component of the “balance on current account,” a measure in both the ITAs and the NIPAs that also includes receipts and payments of income and receipts and payments of current taxes, contributions for government social insurance, and transfers. 1 For a detailed description of the ITAs, see “U.S. International Economic Accounts: Concepts and Methods” available on BEA’s website at www.bea.gov. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-2 Net exports also relates GDP to other important aggregates in the NIPAs. GDP less net exports is equal to gross domestic purchases, which is the market value of goods and services purchased by U.S. residents regardless of where those goods and services are produced. Final sales of domestic product (worldwide final sales of U.S. production) less net exports is equal to final sales to domestic purchasers, which is the market value of final goods and services purchased by U.S. residents regardless of where those goods and services are produced. Net exports is also used in preparing two alternative measures of U.S. production—command-basis GDP and command-basis gross national product (GNP)— that provide information on the real purchasing power of the income generated by U.S. production of goods and services.1F 2 These measures reflect the impact of changes in the terms of trade and of changes in production on the purchasing power associated with the nation’s output. More specifically, these measures deflate exports and imports of goods and services (and, in the case of command-basis GNP, also income receipts and payments) by the price index for gross domestic purchases (which measures the prices of goods and services purchased by U.S. residents). Thus, the command-basis measures reflect the prices of purchased goods and services, while real GDP and real GNP reflect the prices of produced goods and services. Other related measures include the trading gains index, which is measured as the ratio of the GDP price index to the price index for gross domestic purchases, and the terms of trade index, which is measured as the ratio of the price index for exports of goods and services to the price index for imports of goods and services.2F 3 Definitions and Concepts The estimates of net exports are an integral part of the NIPAs, a set of accounts that provides a logical and consistent framework for presenting statistics on U.S. economic activity (see “Chapter 2: Fundamental Concepts”). As discussed in Chapter 2, net exports is one of the final expenditures components of GDP. It is equal to exports, which measures all goods and services sold, given away, or otherwise transferred by residents of the United States to foreign residents (also referred to as nonresidents or the rest of the world) less imports, an offsetting component of GDP that measures all goods and services sold, given away, or otherwise transferred by foreign residents to U.S. residents. The inclusion of exports as a component of GDP is straightforward; as explained in Chapter 2, in the final expenditures approach, GDP is measured by summing the final expenditures of persons, businesses, governments, and foreigners for goods and services produced in the United States. Because exports to foreign residents represent the endpoint 2 GDP measures the value of goods and services produced by labor and property located in the United States, while GNP measures the value of goods and services produced by labor and property supplied by U.S. residents. GNP is equal to GDP less net income payments to the rest of the world. BEA also prepares alternative command-basis measures of net national product and of net domestic product. 3 For more information, see the section “Principal quantity and price measures” in Chapter 2. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-5 District of Columbia, and U.S. military installations, embassies, and consulates abroad; Puerto Rico and other islands in the Pacific Ocean and the Caribbean Sea that are designated as commonwealths or territories of the United States are excluded. That is, the NIPAs treat U.S. commonwealths and territories as part of the rest of the world, so the flows of goods and services between them and the United States are included in exports and imports. In the ITAs, U.S. commonwealths and territories are included as part of the domestic economy; the flows of goods and services between them and the United States are excluded from exports and imports, but the flows of goods and services between them and the rest of the world are included in exports and imports.7F 8 Table 8.1 shows the types of transactions that are included in, and excluded from, exports and imports in the NIPAs. Table 8.1—Content of Net Exports Category of expenditure Comments Exports of goods With the exception of certain items noted below, includes all new and used goods sold, given away, or otherwise transferred from U.S. residents to foreign residents, valued at the transactions—or market—price at the customs boundaries of the United States. Includes one service—electrical energy—in accordance with the recommendation of the Balance of Payments and International Investment Position Manual (BPM6). Excludes certain goods that are classified as services exports: goods purchased and used in the United States by foreign travelers and students; supplies purchased by foreign air and ocean carriers at U.S. ports except fuel and certain nonmilitary goods delivered by military and civilian agencies of the U.S. government to nonresidents in the United States or delivered by U.S. installations abroad to nonresidents. Excludes sales of dwellings and major improvements because ownership implies either real or notional residency. Excludes sales of illegal goods because of insufficient source data on illegal activities. Exports of services With the exception of certain items noted below, includes all sales or transfers from U.S. residents to foreign residents of intangible commodities that may be produced, transferred, and consumed at the same time, such as legal services. Includes those goods excluded from exports of goods as noted above. Includes an imputation for financial services furnished without payment by commercial banks and by the Federal Reserve. Excludes electrical energy, as noted above. Excludes sales of illegal services because of a lack of source data on illegal activities. 8 BEA’s long-run goal is to make the geographic coverage in the NIPAs consistent with the treatment in the ITAs. BEA has prepared separate GDP estimates for American Samoa, the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands for the years beginning with 2002. Although these estimates are not currently integrated with the GDP estimates for the United States, they represent an important first step toward consistency. For more information, see “States and Territories” on BEA’s website at www.bea.gov. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-6 Imports of goods With the exception of certain items noted below, includes all new and used goods that are sold, given away, or otherwise transferred from foreign residents to U.S. residents, valued at the transactions price paid for merchandise for import into the United States, excluding import duties, freight, insurance, and other charges incurred in bringing the merchandise to the United States. Includes one service—electrical energy—in accordance with the recommendation of BPM6. Excludes certain goods that are classified as services imports: goods purchased and used abroad by U.S. travelers and students; supplies purchased abroad by U.S. air and ocean carriers at foreign ports except fuel; direct defense expenditures abroad for goods, except for petroleum, by U.S. military agencies; and goods purchased by nonmilitary agencies of the U.S. government. Excludes purchases of dwellings and major improvements because ownership is treated as implied residency. Excludes purchases of illegal goods because of insufficient source data on illegal activities. Imports of services With the exception of certain items noted below, includes all sales or transfers from foreign residents to U.S. residents of intangible commodities that may be produced, transferred, and consumed at the same time, such as legal services. Includes those goods excluded from imports of goods as noted above. Includes an imputation for financial services furnished without payment by commercial banks and by the Federal Reserve. Excludes electrical energy, as noted above. Excludes purchases of illegal services because of insufficient source data on illegal activities. As noted in the table, exports excludes capital expenditures by foreign residents on structures in the United States. Instead, these expenditures are included in private fixed investment because ownership of a structure in a country signifies a center of economic interest in that country.8F 9 Likewise, imports excludes capital expenditures by U.S. residents on structures in the rest of the world.9F 10 As the NIPAs do not record transactions in financial assets, exports and imports do not include sales to, or purchases from, the rest of the world of financial assets (though the fees associated with these transactions are recorded as services provided).10F 11 The 9 A nonresident owner of a dwelling without an economic interest in that country is treated as if he or she has transferred ownership to a hypothetical resident of the country (see the section “Center of Economic Interest” in the 6th edition of the Balance of Payments and International Investment Position Manual (BPM6), (Washington, D.C.: International Monetary Fund, 2009), available at http://www.imf.org/external/pubs/ft/bop/2007/bopman6.htm). 10 The returns to U.S. residents on their investments outside the United States, including investments in structures, less the returns to foreign residents on their investments in the United States, are included in GNP but not in GDP. 11 However, financial transactions are recorded in BEA’s international accounts and in the Federal Reserve Board’s financial accounts (formerly called the flow of funds accounts). CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-7 NIPAs also do not include illegal goods and services, which are excluded because there are insufficient source data available on illegal activities.11F 12 The principal categories of exports and of imports are goods and services. In the NIPAs, goods are classified by type of product into broad categories that reflect the more detailed “end-use” classification system used by the ITAs. The end-use classification system for goods, which consists of 139 export categories and 142 import categories, is based on the principal use rather than the physical characteristics of the merchandise and allows changes in trade to be compared with changes in production, consumption, and income.12F 13 Services exports and imports in the NIPAs are generally classified by type of service. However, because of data limitations, certain services are instead classified according to the type of transactors associated with them. Examples include the detailed components of travel services and services that are exported and imported by U.S. military agencies; the latter are classified as exports and imports of “government goods and services, n.e.c.” 13F 14 Exports and imports of services in the NIPAs are each grouped into six broad categories that generally correspond to the aggregate categories used in the ITAs: transport, travel (for all purposes including education), charges for the use of intellectual property n.e.c., other business services, government goods and services n.e.c., and other exports or imports.14F 15 Recording in the NIPAs As described in Chapter 2, the NIPAs can be viewed as aggregations of accounts belonging to individual transactors in the economy. In this context, net exports represents the difference between the aggregate demand by all foreign residents for goods and services produced in the United States and the aggregate demand by all U.S. residents for goods and services produced outside the United States. 12 For more information on the activities that are included in, and excluded from, production and on the exclusion of financial assets in the NIPAs, see the sections “Production boundary” and “Asset boundary” in Chapter 2. 13 The end-use categories used by BEA—such as foods, feeds, and beverages; capital goods; industrial supplies and materials; automotive products; and consumer goods—incorporate the Harmonized Commodity Description and Coding System (Brussels: Customs Cooperation Council): 1984. The system was developed under the auspices of the International Customs Cooperation Council to establish an accepted standard for the classification of internationally traded goods. 14 As part of the 2014 annual update of the NIPAs, a new category, “government goods and services n.e.c.” was introduced for both exports and imports. For exports, this component primarily consists of the previously presented category “transfers under U.S. military agency sales contracts.” For imports, the component primarily consists of the previously presented category “direct defense expenditures.” 15 The category “Other business services” consists of the following categories that are recorded separately in the ITAs: maintenance and repair services n.i.e.; insurance services; financial services; telecommunication, computer, and information services; personal, cultural, and recreational services; construction services; and “other” other business services. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-10 transactions.18F 19 These surveys provide information on the receipts and payments for a variety of services and for various types of intangible assets (such as intellectual property). The ITAs also use data from surveys conducted by other U.S. government agencies and mandatory reports submitted to BEA by U.S. government agencies engaged in international transactions. These data are used in deriving estimates of travel, transport, and government goods and services n.e.c. Finally, a variety of published and unpublished source data—including information from U.S. government budgetary documents, from international organizations, from trade associations, and from various other international transactors—are used in deriving certain ITA estimates of services. Tables 8.A (Exports of Goods and Services) and 8.B (Imports of Goods and Services) following the main text summarize the source data and estimating methods that are used to prepare the current-dollar benchmark, nonbenchmark, and current quarterly estimates and the quantity and price estimates for the categories shown in NIPA table group 4.2. The source data and methods for the current quarterly estimates reflect both seasonally adjusted and not seasonally adjusted estimates unless otherwise noted. Benchmark-year and nonbenchmark-year estimates The benchmark and nonbenchmark annual NIPA estimates are derived using essentially the same methodologies. The differences between the benchmark and nonbenchmark annual NIPA estimates relate to the vintage of ITA data used and the number of years for which revisions are incorporated. Each annual NIPA revision incorporates on a best-level basis the revised statistics from the most recent annual revision of the ITAs (which occurs in June).19F 20 The time spans of the ITA revisions are not usually limited. However, the annual NIPA revisions are usually limited to the previous 5 years, although the adoption of flexible annual updates in 2010 allows the expansion to additional years if warranted.20F 21 Therefore, unless the revision period is expanded, the NIPA estimates for earlier years will differ from the ITA estimates by the revisions incorporated into the ITAs but not incorporated into the NIPAs (as well as by the other revisions incorporated into the NIPAs but not into the ITAs). As a result, the NIPA time series of foreign transactions may reflect a discontinuity between the years covered by the NIPA annual update and the preceding years. The discontinuities within the NIPA series and the statistical differences between the NIPAs and the ITAs are generally resolved during benchmark revisions of the NIPAs (which generally occur every 5 years and which incorporate revisions as far back as 19 In this context, “benchmark” refers to the comprehensive nature of the survey and not to the NIPA comprehensive, or “benchmark,” revisions. 20 See “Best level and best change” in Chapter 4. 21 The revision period for BEA’s estimates was expanded from 3 to 5 years as part of the 2018 comprehensive update of the NIPAs. BEA’s flexible approach to annual updates is described in “BEA Briefing: Improving BEA’s Accounts Through Flexible Annual Revisions,” Survey 88 (June 2008): 29-32. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-11 necessary).21F 22 However, the adjustments and other differences described below will remain, and new differences between the two sets of accounts may be introduced when definitional or statistical changes are implemented in the NIPAs during benchmark revisions that are not fully incorporated into the ITAs. NIPA table group 4.3 provides a complete reconciliation of the differences between the NIPAs and the ITAs. Current quarterly estimates Monthly statistics on trade in goods, based on Census Bureau compilations of the customs data, and on trade in services, primarily based on BEA surveys and on data reported by other U.S. government agencies, are provided in a Census Bureau-BEA news release.22F 23 For seasonally adjusted exports and imports of goods, the “advance” quarterly NIPA estimates are based on Census Bureau trade data for the first 2 months of the quarter and the Census advanced trade report for the 3rd month of the quarter. “Second” quarterly NIPA estimates are based on the Census Bureau data for all three months of the quarter. The “third” quarterly NIPA estimates are based on the quarterly ITAs, which incorporate revised Census Bureau data.23F 24 For seasonally adjusted exports and imports of services, the “advance” and “second” quarterly NIPA estimates are largely based on various ITA indicator series that are used to extrapolate from the latest source data. The “third” quarterly NIPA estimates are based on the quarterly ITA estimates, which incorporate data from BEA transportation surveys, extrapolations of BEA survey data on royalties and license fees and “other” private services, and data reported by other U.S. government agencies (and which are used to revise the monthly trade data). The ITA quarterly estimates are incorporated into the NIPA estimates on a “best-change” basis.24F 25 After the third current quarterly estimate, the NIPA estimates of net exports are not revised again until the next annual update. The not seasonally adjusted (NSA) estimates of exports and imports are derived using the same methods as the seasonally adjusted estimates, using not seasonally 22 For instance, during the 2013 comprehensive update of the NIPAs, estimates from the most recent annual revision of the ITAs were incorporated into the NIPAs for only the most recent 3 years; the revisions to the ITAs for years back to 1999 were incorporated as part of the 2014 annual update of the NIPAs. The discontinuities in NIPA series are usually presented in the Survey with the results of the annual or comprehensive update. For example, see the box, “Discontinuities in NIPA Foreign Transactions” in Stephanie H. McCulla, Alyssa E. Holdren, and Shelly Smith, “Improved Estimates of the National Income and Product Accounts: Results of the 2013 Comprehensive Revision,” Survey 93 (September 2013): 31. 23 See “Trade in Goods and Services” on BEA’s website at www.bea.gov; select “Data,” then “By Topic,” and “International Trade & Investment.” 24 For information on BEA’s adjustments to the Census data, see the “Explanatory Notes” section of the “U.S. International Trade in Goods and Services” news release, and see ITA table 2.4, available on the “Interactive Data” section of BEA’s website at www.bea.gov.” 25 See “Best level and best change” in Chapter 4. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-12 adjusted source data. In addition, the adjustments and other differences that reflect the different release schedules, geographic boundaries, and treatments for certain transactions of the seasonally adjusted NIPA estimates of exports and imports and the seasonally adjusted ITA estimates are also incorporated in the not seasonally adjusted estimates (see the section “Adjustments and other differences between the NIPA and ITA estimates” below).25F 26 Adjustments and other differences between the NIPA and ITA estimates As noted above, the NIPA estimates of exports and imports are equal to the ITA estimates with the exception of certain adjustments and other differences that reflect revision schedules, geographic boundaries, and treatments for certain transactions. These differences, as well as those between the NIPA and ITA estimates of receipts and payments of income and estimates of unilateral transfers, are presented in NIPA table 4.3C. Table 8.2 below is a subsample of table 4.3C that focuses on the differences associated with exports and imports. 26 For not seasonally adjusted ITA estimates of trade in goods and services, see “Table 2.1 U.S. International Trade in Goods” and “Table 3.1 U.S. International Trade in Services,” available on the “Interactive Data” section of BEA’s website at www.bea.gov. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-15 (gross domestic purchases is equal to GDP minus net exports) while protecting the integrity of the other final expenditures components of GDP.30F 31 Adjustment for statistical differences (lines 3, 7, 21, and 26). The lines in table 8.2 for “statistical differences” reconcile the different revision cycles of the NIPAs and the ITAs discussed earlier. Adjustment for U.S. territories (lines 4, 9, 23, and 27). As discussed earlier, the “U.S. estimates” for the NIPAs cover the 50 states, the District of Columbia, and U.S. military installations, embassies, and consulates abroad, while the “U.S. estimates” for the ITAs include these geographical areas as well as commonwealths and territories of the United States. Therefore, an adjustment must be made to the ITA statistics to make the geographic coverage consistent with the NIPA coverage. In practice, the adjustment is made only for Puerto Rico and the U.S. Virgin Islands; the value of trade with other U.S. territories and commonwealths is relatively small. The adjustment consists of adding the value of U.S. trade with Puerto Rico and with the U.S. Virgin Islands to the ITA estimates and of deducting the value of their trade with the rest of the world from the ITA estimates. For U.S. exports and imports of goods to and from Puerto Rico and the U.S. Virgin Islands and for exports and imports between them and the rest of the world, the annual and quarterly estimates for the adjustments are based on Census Bureau data on trade in goods. For exports and imports of services, the annual estimates of the value of U.S. exports to, and imports from, Puerto Rico are based on balance-of-payments data from Puerto Rico, and the quarterly estimates are based on judgmental trend. There is no territorial adjustment in the NIPAs for U.S. services exported to, or imported from, the U.S. Virgin Islands; however, the data for exports and imports of goods suggest that the value for services is very small. There is also no adjustment for the value of trade in services between either Puerto Rico or the U.S. Virgin Islands and the rest of the world; total trade data suggest that these values are also very small. Adjustment for other items (line 8). In the ITAs, certain military grant transfers are treated as exports of services. In the NIPAs, some transfers of services under military grant programs, such as peace and humanitarian operations, are included in federal government transfer payments. Thus, an adjustment is made to remove these transfers from the ITA data on exports of services. Quantity and price estimates 31 This treatment is not strictly appropriate for analyses of international competitiveness, but its effects will not be significant as long as the net values remain small and stable. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-16 In general, the estimates of quantities purchased, or real spending, for the most detailed components of most exports and imports are prepared by deflation. In the deflation method, the quantities are calculated by dividing the current-dollar value of the component by an appropriate price index. For most categories of exports and imports of goods, the price indexes are BLS export and import price indexes. However, for several categories of capital goods that have known quality-adjustment challenges, alternative quality-adjusted indexes are substituted. Quality-adjusted prices from the Federal Reserve Board are used in deflating selected components of exports and imports of telecommunications equipment. A BLS producer price index is used to deflate exports of semiconductors.31F 32 A BLS consumer price index for smartphones is used to deflate components of imports of other durable household goods.32F 33 BEA quality-adjusted price indexes are used to deflate imports of photocopier equipment33F 34 and exports and imports of scientific, hospital, and medical equipment. Finally, several types of exports and imports of transportation equipment are deflated using specific PPIs, because export and import price indexes are not available at that level of detail.34F 35 For most categories of services, BLS export or import prices are not available. Instead, PPIs, consumer price indexes, or BEA composite indexes of prices or of input costs are used for deflation.35F 36 In addition, the quantity estimates for several categories of exports and imports are prepared using methods other than deflation. For example, the quantity estimates for petroleum and petroleum products imports are prepared using direct valuation—that is, by multiplying the base-year price by the current-period quantity data. (For general descriptions of the above methods, see “Estimates for detailed components” in Chapter 4.) The aggregate measures of exports and imports are calculated from the detailed components as chain-type quantity and price indexes (for information about these calculations, see “Estimates for NIPA aggregates” in Chapter 4). BEA also prepares measures of real exports and imports and their components in a dollar-denominated form, designated “chained-dollar” estimates (see “Chained-dollar measures” in Chapter 4). Net exports in chained dollars is calculated as the difference between chained-dollar exports 32 See Robert P. Parker and Eugene P. Seskin, “Annual Revision of the National Income and Product Accounts,” Survey 77 (August 1997): 30. 33 “Other durable household goods” includes smartphones; for more information on the indexes used to deflate purchases of cellular telephones, see Jason W. Chute, Stephanie H. McCulla, and Shelly Smith, “Preview of the 2018 Comprehensive Update of the National Income and Product Accounts: Changes in Methods, Definitions, and Presentations,” Survey 98 (April 2018) 34 See Carol E. Moylan and Brooks B. Robinson, “Preview of the 2003 Comprehensive Revision of the National Income and Product Accounts: Statistical Changes,” Survey 83 (September 2003): 30. 35 For goods, the deflation is carried out for 107 categories of exports and for 110 categories of imports. 36 For services, the deflation is carried out for 35 categories of exports and for 35 categories of imports. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-17 and chained-dollar imports—that is, real net exports is derived as the difference between real exports and real imports.36F 37 37 The Fisher formula cannot be used to compute quantity and price indexes for “net exports” because it would require taking the square root of a negative number. For more information, see the “Calculation of Output and Price Indexes” in the appendix to Chapter 4. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-20 Table 8.A—Summary of Methodology Used to Prepare Estimates of Exports of Goods and Services Line in NIPA table group 4.2 Component Current-dollar estimates Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) Benchmark-year and nonbenchmark-year estimates* Current quarterly estimates** inboard motorboats, including commercial and military. Spacecraft, engines, and parts, except military: BEA chain-type price index comprised of PPI for civilian aircraft, PPI for aircraft engines and engine parts, and PPI for aeronautical, nautical, and navigational instruments. Telecommunications equipment: for annual, BEA chain-type price index comprised of Federal Reserve Board (FRB) price indexes for data networking equipment, voice networking equipment, data transport equipment, and wireless networking equipment and of BLS export price index for telecommunications equipment; for current quarter, same as annual except PPI for communications equipment manufacturing price index replaces FRB price index. Scientific, hospital, and medical equipment and parts: for annual, BEA chain-type price index comprised of BEA price indexes for medical imaging equipment and electronic medical equipment, and of BLS export price index for scientific, hospital, and medical equipment and parts; for current quarter, BEA price index based on BLS export price index for scientific, hospital, and medical equipment and parts and quality adjustments by BEA. Other components: BLS export price indexes for detailed end-use categories. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-21 Table 8.A—Summary of Methodology Used to Prepare Estimates of Exports of Goods and Services Line in NIPA table group 4.2 Component Current-dollar estimates Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) Benchmark-year and nonbenchmark-year estimates* Current quarterly estimates** 13 Automotive vehicles, engines, and parts Monthly Census Bureau compilations of export data with adjustments by BEA for coverage and valuation to convert the data to a balance-of-payments basis. Same as for annual estimates. BLS export price indexes for detailed end- use categories. 14 Consumer goods, except food and automotive: 15 Durable goods Monthly Census Bureau compilations of export data with adjustments by BEA for coverage and valuation to convert the data to a balance-of-payments basis. Same as for annual estimates. BLS export price indexes for detailed end- use categories. 16 Nondurable goods Monthly Census Bureau compilations of export data with adjustments by BEA for coverage and valuation to convert the data to a balance-of-payments basis. Same as for annual estimates. Cigars, cigarettes, and other tobacco manufactures: PPI for tobacco products. Other components: BLS export price indexes for detailed end-use categories. 17 Other exports of goods Territorial adjustment for Puerto Rico and the U.S. Virgin Islands: monthly Census Bureau data on trade in goods. [See the section “Adjustments and other differences between the NIPA and ITA estimates.”] Net exports of goods under merchanting: BEA quarterly Survey of Transactions in Selected Services and Intellectual Property with Foreign Persons (BE-125). Other: monthly Census Bureau compilations of export data with adjustments by BEA for coverage and valuation to convert the data to a balance-of-payments basis. Same as for annual estimates. BEA chain-type price index for total exports excluding computers and a portion of semiconductors. 18 Exports of services: CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-22 Table 8.A—Summary of Methodology Used to Prepare Estimates of Exports of Goods and Services Line in NIPA table group 4.2 Component Current-dollar estimates Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) Benchmark-year and nonbenchmark-year estimates* Current quarterly estimates** 19 Transport Sea freight expenditures: Customs and Border Protection (CBP) data on vessels recorded as exporting goods by sea, matched with IHS Markit’s global database of vessels. Air freight expenditures: BEA quarterly Survey of U.S. Airline Operators’ Foreign Revenues and Expenses (BE-37). Sea port expenditures: CBP data on goods imported by sea and IHS Markit data on vessels. Air port expenditures: BEA quarterly Survey of Foreign Airline Operators’ Revenues and Expenses in the United States (BE-9). Air passenger transport: Department of Homeland Security (DHS) data on the number of foreign passengers on flights crossing the U.S. border, Department of Transportation data on flight patterns and average airfares from its Origin and Destination Survey, and Statistics Canada data on air passenger transport. Other modes of transport (truck freight, space freight, rail freight, pipeline freight, rail port, Great Lakes port): truck freight from Bureau of Transportation Statistics (BTS), space freight from U.S. Federal Aviation Administration (FAA), rail freight from U.S. Surface Transportation Board, pipeline Sea freight expenditures: for third estimate, same as for annual estimates; for second and advance estimates, freight volume extrapolated based on recent trends and freight rates extrapolated based on the Baltic Exchange’s Baltic International Tanker Routes index and the Baltic Dry index. Air freight expenditures: for third estimate, same as for annual estimates; for second and advance estimates, BE-37 revenues extrapolated based on Census data on goods exports. Sea port expenditures: For third estimate, same as for annual estimates. For second and advance estimates, BE-29 foreign expenses and USACE data on freight volume extrapolated based on Census data on goods exports and imports. Air port expenditures: for third estimate, same as for annual estimates; for second and advance estimates, BE-9 foreign expenses extrapolated based on Census data on goods exports and imports and on monthly enplanements data reported by Air Transport Association and by individual airlines. Air passenger transport: Same as for annual estimates subject to source data availability. Missing source data are extrapolated as follows: for average airfares (for all countries Sea freight expenditures: PPI for deep sea freight transportation and PPI for coastal and Great Lakes freight transportation. Air freight expenditures: BLS export price for air freight receipts. Sea port expenditures: BEA weighted average of PPI for marine cargo handling, PPI for port and harbor services, PPI for navigational services to shipping, and PPI for coastal and Great Lakes freight transportation. Air port expenditures: BEA weighted average of PPI for airport operations, PPI for freight transportation arrangement, and PPI for aircraft parts and auxiliary equipment. Air passenger transport: BLS export price index for passenger fares. Other modes of transport: PPI for general freight trucking—long distance, PPI for line-haul railroads, PPI for pipeline transportation of crude oil, PPI for freight transportation arrangement, PPI for US postal services, and BLS export price index for air freight receipts. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-25 Table 8.A—Summary of Methodology Used to Prepare Estimates of Exports of Goods and Services Line in NIPA table group 4.2 Component Current-dollar estimates Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) Benchmark-year and nonbenchmark-year estimates* Current quarterly estimates** and Intangible Assets with Foreign Persons. 22 Other business services Telecommunications, computer, and information services: BEA benchmark (BE-120) and quarterly (BE-125) Survey of Transactions in Selected Services and Intangible Assets with Foreign Persons data, Census Bureau data on equipment repairs, and BEA estimates of medical services. Insurance services: BEA benchmark (BE-140) and quarterly (BE-45) Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons data, BE-125 data on insurance transactions, and publicly available industry data. Financial services excluding FISIM: BEA benchmark (BE-180) and quarterly (BE-185) Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons data, U.S. Treasury Department survey data on international capital flows, and Bloomberg financial market data. Financial services furnished without payment (FISIM): U.S. Treasury Department survey data on international claims and liabilities of U.S. financial institutions on foreign residents, Federal Deposit Insurance Corporation Call Reports Telecommunications, computer, and information services: BE-120/125 data extrapolated based on recent quarterly trends, Census Bureau data on equipment repairs, and BEA estimates of medical services. Insurance services: BE-140/45 data extrapolated based on recent quarterly trends and on publicly available industry data. Financial services excluding FISIM: BE-180/185 data extrapolated based on monthly data from the U.S. Treasury Department survey data on international capital flows, on BEA estimates of average brokerage commission rates and fees, on recent quarterly trends, on publicly available industry data, and on Bloomberg financial market data. Financial services furnished without payment (FISIM): U.S. Treasury Department survey data on international claims and liabilities of U.S. financial institutions on foreign residents, Federal Deposit Insurance Corporation Call Report data, publicly available trade data, and recent quarterly trends. Maintenance and repair services: Census Bureau data on maintenance and repairs and BE-125 data Telecommunications, computer, and information services: BEA chain-type price index comprised of the BLS PPI for telecommunications, cable, and internet user services, the PPI for data processing and related services, and the PPI for software publishing. Insurance services: Fixed-weighted composite of the PPI for direct life insurance carriers and the PPI for premiums of property and casualty insurance. Financial services excluding FISIM: PPI for security and commodity contracts. Financial services furnished without payment (FISIM): for annual, quantity extrapolation, using BLS banking output indexes; for quarterly, judgmental trend. Maintenance and repair services: PPI for commercial machinery repair and maintenance. Personal, cultural, and recreational services: BEA implicit price deflator for entertainment originals. Construction services: PPI for new nonresidential building construction. Other-other business services: BEA implicit price deflator for final sales to domestic purchasers. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-26 Table 8.A—Summary of Methodology Used to Prepare Estimates of Exports of Goods and Services Line in NIPA table group 4.2 Component Current-dollar estimates Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) Benchmark-year and nonbenchmark-year estimates* Current quarterly estimates** data, and publicly available industry data. Maintenance and repair services: Census Bureau data on maintenance and repairs and quarterly BE-125 data. Personal, cultural, and recreational services: BEA BE-120 and BE-125 data. Construction services: BEA BEA BE-120 and BE-125 data. Other-other business services: based primarily on BE-125 and BEA-120 survey data. extrapolated based on recent quarterly trends. Personal, cultural, and recreational services: BE-120/125 data extrapolated based on recent quarterly trends. Construction services: BE-120/125 data extrapolated based on recent quarterly trends. Other-other business services: BEA quarterly BE-125 survey data. 23 Government goods and services n.e.c Transfers under U.S. military agency sales contracts: Department of Defense data on services and some goods provided by U.S. military agencies adjusted by BEA to exclude certain transfers under military grant programs, such as peace and humanitarian operations, which are treated in the NIPAs as federal government defense expenditures. U.S. government miscellaneous services: data reported by U.S. government agencies. U.S. receipts of international organizations: Annual estimates based on headcounts of U.S. residents working for International Organizations (IOs) in the U.S, based on publicly available information reported by various IOs. Transfers under U.S. military agency sales contracts: For third estimate, same as for annual estimates. For second and advance estimates, extrapolated based on recent quarterly trends. U.S. government miscellaneous services: for third estimate, same as for annual estimates; for second and advance estimates, recent quarterly trends. U.S. receipts of international organizations: Extrapolated based on budget projections and data provided to BEA by other U.S. government agencies. Transfers under U.S. military agency sales contracts: BEA chain-type price indexes for military facilities construction, for military services excluding compensation, and for other equipment (general government expenditures for medical, construction, industrial, ammunition plant, atomic energy, weapons and fire control, general and other military). U.S. government miscellaneous services: BEA weighted average of employment cost index for professional and related services, employment cost index for office and administrative support, and employment cost index for total compensation for private industry workers in production and PPI for offices of physicians. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-27 Table 8.A—Summary of Methodology Used to Prepare Estimates of Exports of Goods and Services Line in NIPA table group 4.2 Component Current-dollar estimates Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) Benchmark-year and nonbenchmark-year estimates* Current quarterly estimates** U.S. receipts of international organizations: BEA deflator for installation support services. 24 Other exports of services Territorial adjustment: for Puerto Rico, annual balance of payments data from the Commonwealth of Puerto Rico. [See the section “Adjustments and other differences between the NIPA and ITA estimates.”] Territorial adjustment: for Puerto Rico, BEA projections. Territorial adjustment: weighted average of BEA price indexes for exports of travel, for exports of transportation, and for exports of other business services excluding insurance. * The NIPA annual estimates are also consistent with changes to methodology, source data, or seasonal factors implemented during the annual revision of the ITAs. ** For the goods components that use monthly Census Bureau compilations of export data, the source data for the “advance” quarterly estimate are available for only the first 2 months of the quarter; the third month is based on BEA projections using publicly available information. For both goods and services, the third quarterly estimates incorporate the ITA revisions to the monthly trade data. BEA Bureau of Economic Analysis BLS Bureau of Labor Statistics CPI Consumer Price Index, BLS ITAs International Transactions Accounts, BEA NIPAs National Income and Product Accounts, BEA PPI Producer Price Index, BLS CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-30 Table 8.B—Summary of Methodology Used to Prepare Estimates of Imports of Goods and Services Line in NIPA group 4.2 Component Current-dollar estimates Benchmark-year and nonbenchmark- year estimates* Current quarterly estimates** Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) equipment; for current quarter, same as annual except PPI for communications equipment manufacturing price index replaces FRB price index. Scientific, hospital, and medical equipment and parts: for annual, BEA chain-type price index comprised of BEA price indexes for medical imaging equipment and electronic medical equipment, and of BLS import price index for scientific, hospital, and medical equipment and parts; for current quarter, BEA price index based on BLS import price index for scientific, hospital, and medical equipment and parts and quality adjustments by BEA. Other components: BLS import price indexes for detailed end-use categories. 37 Automotive vehicles, engines, and parts Monthly Census Bureau compilations of import data with adjustments by BEA for coverage and valuation to convert the data to a balance-of-payments basis. Same as for annual estimates. BLS import price indexes for detailed end-use categories. 38 Consumer goods, except food and automotive: 39 Durable goods Monthly Census Bureau compilations of import data with adjustments by BEA for coverage and valuation to convert the data to a balance-of-payments basis. Same as for annual estimates. Other household goods: BEA chain-type price index comprised of the BLS import price index for other household goods and the CPI for smartphones. Other components: BLS import price indexes for detailed end-use categories. 40 Nondurable goods Monthly Census Bureau compilations of import data with adjustments by BEA for coverage and valuation to convert the data to a balance-of-payments basis. Same as for annual estimates. BLS import price indexes for detailed end-use categories. 41 Other imports of goods Territorial adjustment for Puerto Rico and the U.S. Virgin Islands: monthly Census Bureau data on trade in goods. [See the section “Adjustments and other differences between the NIPA and ITA estimates.”] Same as for annual estimates. Territorial adjustment for Puerto Rico: BEA weighted average of BEA chain-type price index for total imports excluding petroleum, computers, semiconductors, and gold and of PPI for pharmaceutical preparation manufacturing. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-31 Table 8.B—Summary of Methodology Used to Prepare Estimates of Imports of Goods and Services Line in NIPA group 4.2 Component Current-dollar estimates Benchmark-year and nonbenchmark- year estimates* Current quarterly estimates** Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) Other: monthly Census Bureau compilations of import data with adjustments by BEA for coverage and valuation to convert the data to a balance-of-payments basis. Territorial adjustment for the U.S. Virgin Islands: PPI for petroleum refineries. Other: BEA chain-type price index for total imports excluding petroleum, computers, semiconductors, and gold. 42 Imports of services: 43 Transport Sea freight expenditures: Customs and Border Protection (CBP) data on vessels recorded as importing goods by sea, matched with IHS Markit’s global database of vessels. Air freight expenditures: BEA quarterly Survey of U.S. Airline Operators’ Foreign Revenues and Expenses (BE- 37). Sea port expenditures: CBP data on goods exported by sea and IHS Markit data on vessels. Air port expenditures: BEA quarterly Survey of Foreign Airline Operators’ Revenues and Expenses in the United States (BE-9). Air passenger transport: Department of Homeland Security (DHS) data on the number of U.S. citizen passengers on flights crossing the U.S. border, Airline Reporting Corporation data on flight patterns and average airfares, and Statistics Canada data on air passenger transport. Other (truck freight, space freight, rail freight, pipeline freight, rail port): truck freight from Bureau of Transportation Statistics (BTS), space freight from the Federal Aviation Administration Commercial Space Transportation Year in review, rail freight from U.S. Surface Sea freight expenditures: for third estimate, same as for annual estimates; for second and advance estimates, freight volume extrapolated based on recent trends and freight rates extrapolated based on the Baltic Exchange’s Baltic International Tanker Routes index and the Baltic Dry index. . Air freight expenditures: for third estimate, same as for annual estimates; for second and advance estimates, BE- 37 revenues extrapolated based on Census data on goods exports. Sea port expenditures: For third estimate, USACE freight volume data is multiplied by port rates extrapolated based on historical trends. For second and advance estimates, BE-29 foreign expenses and USACE data on freight volume extrapolated based on Census data on goods exports and imports. Air port expenditures: for third estimate, same as for annual estimates; for second and advance estimates, BE-9 foreign expenses extrapolated based on Census data on goods exports and imports and on monthly enplanements data reported by Airlines for America or on monthly revenue passenger miles data reported by individual airlines. Sea freight expenditures: PPI for deep sea freight transportation and PPI for coastal and Great Lakes freight transportation. Air freight expenditures: BLS import price for air freight receipts. Sea port expenditures: BEA weighted average of PPI for marine cargo handling, PPI for port and harbor services, PPI for navigational services to shipping, and PPI for coastal and Great Lakes freight transportation. Air port expenditures: BEA weighted average of PPI for airport operations, PPI for freight transportation arrangement, and PPI for aircraft parts and auxiliary equipment. Passenger air transport: BLS import price index for passenger fares. Other: PPI for general freight trucking—long distance, PPI for line-haul railroads, PPI for freight transportation arrangement, PPI for US postal services, and BLS import price index for air freight receipts. CHAPTER 8: NET EXPORTS OF GOODS AND SERVICES 8-32 Table 8.B—Summary of Methodology Used to Prepare Estimates of Imports of Goods and Services Line in NIPA group 4.2 Component Current-dollar estimates Benchmark-year and nonbenchmark- year estimates* Current quarterly estimates** Quantity and price estimates (Quantity estimate prepared by deflating with price index unless otherwise indicated) Transportation Board, pipeline freight from company data, rail port from Statistics Canada. Air passenger transport: Same as for annual estimates subject to source data availability. Missing source data are extrapolated as follows: For average airfares for all countries except Canada, based on the BLS import price index for passenger fares. For average airfares for Canada, based on the growth rate of the number of U.S. air travelers to Canada from Statistics Canada data. Other: For third estimate, same as for annual estimates. For second and advance estimates, for truck freight, BTS data extrapolated based on Census data on goods exports and imports; for space freight (satellite launch services), FAA data; for rail freight, and data from Statistics Canada and U.S. Surface Transportation Board; for pipeline freight, company data, 44 Travel (for all purposes including education) Other business and Other personal travel: DHS data on the number of U.S. travelers overseas, International Trade Administration National Travel and Tourism Office (NTTO) data on average expenditures from its Survey of International Air Travelers (SIAT), Statistics Canada data on expenditures by U.S. travelers in Canada, and Mexico’s National Institute of Statistics and Geography (INEGI) data on expenditures of U.S. travelers in Mexico. Expenditures by border, seasonal, and other short-term workers: data on expenditures abroad of U.S. residents employed temporarily abroad. Education-related travel: Institute of International Education data on the Other business and Other personal travel: Same as for annual estimates subject to source data availability. Missing source data are extrapolated as follows: for the number of U.S. travelers overseas to all countries except Mexico, forecast using an ARIMA model; for average expenditures of U.S. travelers overseas, to all countries except Mexico, based on recent quarterly trends; and for Mexico, based on recent quarterly trends. Expenditures of seasonal, border and other short-term workers: expenditures abroad of U.S. residents employed temporarily abroad extrapolated based on recent quarterly trends. Education-related travel: number of students forecast using an ARIMA model; average tuition extrapolated based on the Other business and Other personal travel: BEA weighted average of foreign CPIs for all items, adjusted by exchange rates. Expenditures of seasonal, border and other short-term workers: BEA weighted average of foreign CPIs for all items, adjusted by exchange rates. Education-related travel: BEA weighted average of foreign CPIs for all items adjusted by exchange rates. Health-related travel: extrapolated based on CPI for hospitals and related services.