Finding More Timely Economic Statistics
This is part two of a four-part blog series where Kauffman Foundation Research Director E.J. Reedy interviews Ron Jarmin, Assistant Director of Research and Methodology at the U.S. Census Bureau, to learn more about how Census is continuing to create new, innovative data resources and about some of its work as a partner with the newly created Institute for Research on Innovation and Science at the University of Michigan. The next part of this interview will be released Kauffman’s Growthology blog. Read part one of the interview on the Institute for Research on Innovation and Science.
Part 2: Finding More Timely Economic Statistics
Q (Reedy): As the Census Bureau attempts to become more timely and provide more detail on the activities it benchmarks, how are you thinking about this and other projects you might want to undertake?
A (Jarmin): We are looking at ways that we can go to other parts of the economy and do similar things. If you think of what we do every five years with the economic census, where we actually contact millions of business organizations around the country to do our most accurate snapshot, that’s used to benchmark the National Income and Product Account, the input/output tables, and a whole bunch of stuff that our colleagues at the Bureau of Economic Analysis do. That process creates very lagged information. If we were able to collect a lot of the types of information that we collect in the economic census in a more passive, automated way, much more frequently, we’d be able to have the National Income and Product Accounts benchmarked in close to real time or at least within several months. So that’s kind of the vision we’re shooting for and, with the IRIS-IMI project, we’re collaborating with some academic researchers that are going to help us sort of prototype a lot of the things that we would have to do in order to expand this to the rest of the economy.
Q: What kind of criteria would you use to evaluate a potential data source or data partnership before considering moving forward? Is it important to find basically real-time data or is it a matter of scale? Or is it a matter of finding a known universe of coverage?
A: So I think it’s going to be all of those things. We have very good administrative data that’s pretty timely on some basic aspects of the operation of firms in the economy, and those come from the tax system, whether it be payroll taxes or unemployment insurance taxes. And those give us a pretty accurate picture of part of the business universe. But what we don’t collect from those things that we do have to collect, say, in the economic census is a richer description of the inputs and outputs of various firms and sectors so that you can compute value added, GDP, etc. We can change this if we were able to speed that process up. A really great example that people point to is when the recession happened there was the picture of the economy that was several years old contrasted with the activity in the shale fields in North Dakota. Those things just weren’t in the models and it’s because we were using old data. So I think we’d like to be able to speed up the processing of this richer information that we get in the economic census, and actually, in fact, enrich it and expand the scope of what we collect from businesses in a much more timely manner. If we were able to reduce the cost of bringing the information in through automation, you can think about collecting the rich information we now collect only every five years on an annual or even quarterly basis or something like that. So the data would be much more timely.
Q: So it could be automatically collected via existing records not currently available to the Census or via more standardized reporting?
A: Right. We envision some sort of upfront costs of getting it set up. But I think businesses would benefit from this because you make an upfront investment and then a lot of your reporting to government agencies becomes automated. For some things, I think we would try to collect them in places where they naturally pile up. So we’re exploring things like getting transaction-level data, or aggregations of them, from sources like credit card companies and stuff like that to look at retail trade, those sorts of things. So I mean, there’s a number of ways I think we can find these certain places in the economy where information tends to get aggregated, and we can get it there rather than going out and asking thousands of firms or households for it. But you know, when we do have to get it from individual firms, I think we will be looking for ways to streamline, automate, and speed up the processing time it takes to get the data and then put data products out for the public.
This is part two of a four-part blog series where Kauffman Foundation Research Director E.J. Reedy interviews Ron Jarmin, Assistant Director of Research and Methodology at the U.S. Census Bureau, to learn more about how Census is continuing to create new, innovative data resources and about some of its work as a partner with the newly created Institute for Research on Innovation and Science at the University of Michigan. The next part of this interview will be released on Kauffman’s Growthology blog.
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