ECONOMY ECONOMICS
Bureau of Economic Analysis (BEA)
By
DANIEL LIBERTOUpdated Apr 8, 2019
What Is the Bureau of Economic Analysis (BEA)?
The Bureau of Economic Analysis (BEA) is a division of the U.S. federal government's Department of Commerce that is responsible for the analysis and reporting of economic data used to confirm and predict economic trends and business cycles. Reports from the BEA greatly influence government economic policy decisions, investment activity in the private sector, and buying and selling patterns in global stock markets.
KEY TAKEAWAYS
Understanding the Bureau of Economic Analysis (BEA)
The BEA says its mission is to promote a better understanding of the U.S. economy by providing the most timely, relevant, and accurate economic accounts data in an objective and cost-effective manner. To achieve its goal, the government agency taps into a vast array of data collected at local, state, federal, and international levels. Its job is to summarize this information and present it promptly and regularly to the public.
The Bureau of Economic Analysis (BEA) does not interpret data or make forecasts.
Reports are released at international, national, regional, and industry level. Each one contains information on key factors such as economic growth, regional economic development, interindustry relationships, and the nation's position in the world economy. This means that a lot of the information the bureau publishes is very closely monitored.
In fact, the BEA's data is known to regularly influence things like interest rates, trade policy, taxes, spending, hiring and investing. Because of the huge impact they have on the economy and corporate decision making, it is not unusual to see financial markets move considerably on the day the BEA's data is released, particularly if the numbers diverge considerably from expectations.
Types of Bureau of Economic Analysis (BEA)
Among the most influential statistics analyzed and reported by the BEA are gross domestic product (GDP) data and the U.S. balance of trade (BOT).
Gross Domestic Product
The GDP report is one of the BEA's most crucial outputs. It tells us the monetary value of all the finished goods and services produced within a country's borders in a specific time period.
GDP gives the public an indication of an economy's size. Moreover, when compared against prior periods, this data can reveal whether the economy is expanding (producing more goods and services) or contracting (registering declining output). The direction of GDP helps central banks determine whether it is necessary to intervene with monetary policy or not.
If the growth rate is slowing, policymakers might consider introducing an expansionary policy to give the economy a lift. If, on the other hand, the economy is running at full throttle, a decision might be made to curb inflation and discourage spending.
GDP has been ranked as one of the three most influential measures that affect U.S. financial markets and is credited as the Department of Commerce's greatest achievement of the 20th century.
Though GDP is usually calculated on an annual basis, it can be calculated on a quarterly basis as well—in the United States, for example, the government releases an annualized GDP estimate for each quarter and also for an entire year.
Balance of Trade
The balance of trade (BOT) measures economic transactions between a nation and its trading partners, showing the difference between the value of a country's imports and exports for a given period.
The BEA reports on the U.S. balance of payments (BOP), covering goods and services that move in and out of the country. Economists use this information to gauge the relative strength of a country's economy.When exports are higher than imports, it tends to boost GDP. In the opposite scenario, it creates a trade deficit.
A trade deficit typically tells us that a country is not producing enough goods for its residents, forcing them to buy them abroad. A deficit can also signal that a country’s consumers are wealthy enough to purchase more goods than their country churns out.
Related Terms
Gross Domestic Product (GDP)
Gross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period. more
Real Gross Domestic Product (Real GDP) Definition
Real gross domestic product is an inflation-adjusted measure of the value of all goods and services produced in an economy. more
U.S. Census Bureau
The United States Census Bureau is a division of the Bureau of Commerce that is responsible for conducting the national census at least once every 10 years. more
Gross National Product (GNP) Deflator Definition
The gross national product (GNP) deflator is an economic metric that accounts for the effects of inflation in the current year's GNP. more
What Is Macro Accounting?
Macro accounting is the compilation of national statistics that forms the basis for tracking and forecasting a nation's economic performance. more
Personal Income and Outlays Definition
Personal Income and Outlays is a report produced by the Bureau of Economic Analysis that tracks personal income and monthly spending. more
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