Section 13 Income, Expenditures, Poverty, and Wealth This section presents data on gross periodically conducts the Survey of domestic product (GDP), gross national Consumer Finances, which presents finan- product (GNP), national and personal cial information on family assets and net income, saving and investment, money worth. The most recent survey is available income, poverty, and national and at <http://www.federalreserve.gov/pubs personal wealth. The data on income and /oss/oss2/scfindex.html>. Detailed infor- expenditures measure two aspects of the mation on personal wealth is published U.S. economy. One aspect relates to the periodically by the Internal Revenue National Income and Product Accounts Service (IRS) in SOI Bulletin. (NIPA), a summation reflecting the entire complex of the nation’s economic income National income and product— and output and the interaction of its GDP is the total output of goods and major components; the other relates to services produced by labor and prop- the distribution of money income to erty located in the United States, valued families and individuals or consumer at market prices. GDP can be viewed in income. terms of the expenditure categories that comprise its major components: The primary source for data on GDP, GNP, personal consumption expenditures, national and personal income, gross gross private domestic investment, net saving and investment, and fixed assets exports of goods and services, and gov- and consumer durables is the Survey of ernment consumption expenditures and Current Business, published monthly by gross investment. The goods and services the Bureau of Economic Analysis (BEA). included are largely those bought for final A comprehensive revision to the NIPA use (excluding illegal transactions) in the was released beginning in July 2009. market economy. A number of inclusions, Discussions of the revision appeared in however, represent imputed values, the the March, August, September, October, most important of which is the rental and November 2009 issues of the Survey value of owner–occupied housing. GDP, in of Current Business. Summary historical this broad context, measures the output estimates appeared in the August 2009 attributable to the factors of production issue of the Survey of Current Business. located in the United States. GDP by state Detailed historical data can be found on is the gross market value of the goods BEA’s Web site at <http://www.bea.gov/>. and services attributable to labor and property located in a state. It is the state Sources of income distribution data are counterpart of the nation’s GDP. the decennial censuses of population, the Current Population Survey (CPS), The featured measure of real GDP is and the American Community Survey, all an index based on chain-type annual products of the U.S. Census Bureau (see weights. Changes in this measure of text, Section 1 and Section 4). Annual real output and prices are calculated data on income of families, individuals, as the average of changes based on and households are presented in Current weights for the current and preceding Population Reports, Consumer Income, years. (Components of real output are P60 Series, in print. Many data series are weighted by price, and components of also found on the Census Web site at prices are weighted by output.) These <http://www.census.gov/hhes annual changes are “chained” (multiplied) /www/income/income.html>. Data on together to form a time series that allows the household sector’s saving and assets for the effects of changes in relative are published by the Board of Governors prices and changes in the composition of of the Federal Reserve System in the output over time. Quarterly and monthly quarterly statistical release Flow of Funds changes are based on quarterly and Accounts. The Federal Reserve Board also monthly weights, respectively. Income, Expenditures, Poverty, and Wealth 431 U.S. Census Bureau, Statistical Abstract of the United States: 2012 The output indexes are expressed as historical costs and reflect changes over 2005 = 100, and for recent years, in 2005 time in service lives and depreciation dollars; the price indexes are also based patterns as permitted by tax regulations. to 2005 = 100. For more information on Inventory valuation adjustment represents chained–dollar indexes, see the article on the difference between the book value of this subject in the November 2003 issue inventories used up in production and the of the Survey of Current Business. cost of replacing them. Chained (2005) dollar estimates of most Personal income is the current income components of GDP are not published received by persons from all sources for periods prior to 1990, because minus their personal contributions during periods far from the base period, for government social insurance. the levels of the components may pro- Classified as “persons” are individuals vide misleading information about their (including owners of unincorporated contributions to an aggregate. Values are firms), nonprofit institutions that primarily published in index form (2005 = 100) for serve individuals, private trust funds, and 1929 to the present to allow users to private noninsured welfare funds. calculate the percent changes for all Personal income includes personal components, which are accurate for all current transfer receipts (payments not periods. In addition, BEA publishes resulting from current production) from estimates of contributions of major government and business such as social components to the percent change in security benefits, public assistance, etc., GDP for all periods. but excludes transfers among persons. Also included are certain nonmonetary Gross national product measures the types of income chiefly, estimated net output attributable to all labor and rental value to owner-occupants of their property supplied by United States homes and the value of services furnished residents. GNP differs from “national without payment by financial interme- income” mainly in that GNP includes diaries. Capital gains (and losses) are allowances for depreciation—that is, excluded. consumption of fixed capital. Disposable personal income is personal National income includes all net incomes income less personal current taxes. It net of consumption of fixed capital (CFC), is the income available to persons for earned in production. National income spending or saving. Personal current is the sum of compensation of employ- taxes are tax payments (net of refunds) ees, proprietors’ income with inventory by persons (except personal contributions valuation adjustment (IVA) and capital for government social insurance) that consumption adjustment (CCAdj), rental are not chargeable to business expense. income of persons with CCAdj, corporate Personal taxes include income taxes, profits with IVA and CCAdj, net interest personal property taxes, motor vehicle and miscellaneous payments, taxes on licenses, and other miscellaneous taxes. production and imports, business current transfer payments (net), and Gross domestic product by current surplus of government enter- industry—The BEA also prepares prises, less subsidies. estimates of value added by industry. Value added is a measure of the contribu- Capital consumption adjustment for tion of each private industry and of gov- corporations and for nonfarm sole ernment to the nation’s GDP. It is defined proprietorships and partnerships is the as an industry’s gross output (which difference between capital consumption consists of sales or receipts and other based on income tax returns and capital operating income, commodity taxes, and consumption measured using empirical inventory change) minus its intermedi- evidence on prices of used equipment ate inputs (which consists of energy, and structures in resale markets, which raw materials, semi-finished goods, and have shown that depreciation for most services that are purchased from domestic types of assets approximates a geometric industries or from foreign sources). These pattern. The tax return data are valued at estimates of value added are produced for 432 Income, Expenditures, Poverty, and Wealth U.S. Census Bureau, Statistical Abstract of the United States: 2012 61 private industries and for 4 govern- Consumer Expenditure Survey— ment classifications—federal general The Consumer Expenditure Survey government and government enterprises program began in 1980. The principal and state and local general government objective of the survey is to collect cur- and government enterprises. rent consumer expenditure data, which provide a continuous flow of data on the The estimates by industry are available buying habits of American consumers. in current dollars and are derived from The data are necessary for future revi- the estimates of gross domestic income, sions of the Consumer Price Index. which consists of three components— the compensation of employees, gross The survey conducted by the Census operating surplus, and taxes on produc- Bureau for the Bureau of Labor Statistics tion and imports, less subsidies. Real, consists of two components: or inflation-adjusted, estimates are also (1) an interview panel survey in which prepared. the expenditures of consumer units are obtained in five interviews conducted Regional Economic Accounts— every 3 months, and (2) a diary or These accounts consist of estimates of recordkeeping survey completed by state and local area personal income and participating households for two of gross domestic product by state and consecutive 1-week periods. are consistent