Consumer Price Index

The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) the CPI for Urban Wage Earners and Clerical Workers (CPI-W), which covers households of wage earners and clerical workers that comprise approximately 32 percent of the total population and (2) the CPI for All Urban Consumers (CPI-U) and the Chained CPI for All Urban Consumers (C-CPI-U), which cover approximately 87 percent of the total population and include in addition to wage earners and clerical worker households, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPIs are based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected in 87 urban areas across the country from about 50,000 housing units and approximately 23,000 retail establishments, department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index.

All items less food and energy captures approximately 76.0% of the total CPI index. The food category accounts for approximately 14.0% of the total CPI index, and the energy category accounts for approximately 10.0% of the total CPI index.

Estimates for nonfarm payroll employment come from the establishment survey.

Personal Consumption Expenditures: Price Indices

The personal consumption expenditure (PCE) chain-type index is released as part of the Personal Income and Outlays data. Personal income is generally released on or near the last business day of the month. The index is a measure of inflation, similar to the CPI.

While PCE is the amount of money individuals spend on goods and services, the index measures the inflation rate for those expenditures. The PCE index is different from the CPI in that it better accounts for the fact that, as prices change, people's spending habits change. The ‘core’ piece of the index removes the volatility associated with changing food and energy prices, just like the CPI, and focuses on the remaining items in the index.

Employment Cost Index

The Employment Cost Index (ECI) is a measure of the change in the cost of labor, free from the influence of employment shifts among occupations and industries. The compensation series includes changes in wages and salaries and costs faced by employers for employee benefits. The Data Summary reports total compensation data and wage and salary data for both Civilian and Private Industry workers.

Wages and salaries are defined as the hourly straight-time wage rate or, for workers not paid on an hourly basis, straight-time earnings divided by the corresponding hours. Straight-time wage and salary rates are total earnings before payroll deductions, excluding premium pay for overtime and for work on weekends and holidays, shift differentials, and nonproduction bonuses such as lump-sum payments provided in lieu of wage increases. Production bonuses, incentive earnings, commission payments, and cost-of-living adjustments are included in straight-time wage and salary rates.

Productivity and Costs

Productivity estimates are released 8 times per year. The first estimates for each quarter are generally released at the beginning of the second month following the end of the quarter. The original estimates are revised one month later.

roductivity describes the relationship between real output and the labor time involved in its production (i.e. output per hour). Productivity shows the changes from period to period in the amount of goods and services produced per hour. Although productivity measures relate output to hours at work of all persons engaged in a sector, it does not measure the specific contribution of labor, capital, or any other factor of production. Rather, it reflects the joint effects of many influences, including changes in technology; capital investment; level of output; utilization of capacity, energy, and materials; the organization of production; managerial skill; and the characteristics and effort of the work force.

Hourly compensation equals compensation divided by hours worked. Compensation includes the wages and salaries of employees plus employers' contributions for social insurance & private benefit plans. Unit labor costs equal hourly compensation divided by productivity, which is equivalent to compensation divided by output.

Hourly Earnings

Earnings data are released in the Employment Situation and are collected as part of the establishment survey. The Employment Situation is generally released on the first Friday of every month.

Hours and earnings data are for private businesses and relate only to production workers in the goods-producing sector and nonsupervisory workers in the service-providing sector.

Personal Income

Personal income and consumption expenditures are released on a monthly basis. Income figures are reported in nominal terms. Real consumption numbers are the same as reported on the GDP release, but reported on a monthly basis.

Personal income is calculated as the sum of wages and salary disbursements, other labor income, proprietors' income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and transfer payments to persons, less personal contributions for social insurance.

Wages and salaries account for approximately 52 percent of personal income. Real disposable income is equal to personal income less personal tax and nontax payments and is adjusted to remove price changes. Real durable goods account for approximately 14 percent of real consumption.

The saving rate equals personal savings as a percentage of disposable personal income. Personal savings is the difference between disposable income and personal outlays (personal consumption expenditures, interest paid by persons, and personal transfer payments to the rest of the world [net]).

Retail Sales

The Census Bureau conducts the Advance Monthly Retail Trade and Food Services Survey each month to provide an early indication of sales of retail and food service companies. The Advance Monthly Retail Survey is a voluntary survey of a sub-sample of about 5,000 firms selected from the Monthly Retail Trade Survey. Data are measured in millions of dollars. Advance monthly sales for retail and food services covers NAICS codes 44, 45, and 722. Major categories included in these codes are:

• Motor vehicles & parts dealers
• Furniture & home furnishings stores
• Electronics & applicance stores
• Building material & garden eq. & supplies dealers
• Food & beverage stores
• Health & personal care stores
• Gasoline stations
• Clothing & clothing accessories stores
• Sporting goods, hobby, book & music stores
• General merchandise stores
• Miscellaneous store retailers
• Nonstore retailers (ie., electronic shopping & mail-order houses)
• Food services & drinking places

Motor vehicles & parts dealers have accounted for 20% of total retail sales on average over the past ten years. The weight of the autos contribution had been steadily declining, however, to a series-low 16.5% in 2009, but has since increased to 17.5% in 2011.

Retail sales excluding food, autos, building supplies and gas stations is a closely watched sub-series, commonly referred to as ‘core sales’. Since its inception in 1992, these items have accounted for 45.2% of total sales on average.

Auto and Truck Sales

Lightweight vehicle sales data for a particular month are updated within the first three business days of the following month; recently the data has been released on the first or second business day. On the day of the release, most manufacturers report early in the afternoon, but at least one major manufacturer does not report until later in the day. This data is typically reported on by major media outlets immediately, but the BEA does not release the official, final data until later in the day. Auto production and inventories are available by the end of the second week after the end of the month.

Total auto and light truck sales include autos (all passenger cars, including station wagons) and light trucks (trucks up to 10,000 pounds gross vehicle weight, including minivans and sport utility vehicles), regardless of where the vehicles were produced.

The domestic sales series includes only those vehicles above that were sold in the U.S. and assembled in North America. This measure does not include foreign produced vehicles. The domestic auto sales series is equal to the previous series excluding trucks.

Domestic auto & light truck production include only autos and light trucks assembled in the U.S.

Domestic auto & light truck inventories include vehicles assembled in the U.S., Canada, and Mexico.

Day's supply = domestic inventories divided by domestic sales multiplied by 307 (selling days). Day's supply measures the number of days it would take to deplete inventories on hand.

New Residential Construction

New Residential Construction data, covering residential construction from private contracts, is the product of two surveys, the Survey of Construction (SOC) and the Building Permits Survey (BPS). Building permits (authorizations of new privately owned housing units) data is a better indicator of future activity in the housing market, and as such is one of the indicators that comprised the Leading Index published by The Conference Board. It can take five months to establish an underlying trend for starts and up to four months to establish one for permits.

Total housing starts cover new, privately-owned residential buildings currently authorized by a building permit or started in areas not requiring a building permit. Data are available monthly and annually for housing starts since 1959; reported data are for building activity taking place during the applicable reference period. Monthly data collection begins the first day after the reference month and continues through the 7th working day. Total starts is a simple sum of single- and multi-unit starts (any slight differences are due to rounding errors).

Total building permits cover all places issuing building permits for privately-owned residential structures. Over 98 percent of all privately-owned residential buildings constructed are in permit-issuing places. Data on permits for new construction are available monthly and annually since 1959; reported data are for activities taking place during the applicable reference period. Prior to 1959, data were collected by the Bureau of Labor Statistics.

During the ongoing recovery, new construction activity has been mostly focused on multi-unit structures. Single-unit start and permit data increased a bit through 2009, but fell back in early 2010 and has held mostly steady since. Multi-unit data has exhibited a steady upward trend since late 2009. One possible explanation for the dichotomy over this period is the fallout from the mortgage and credit crisis, which has dramatically lowered the value of single-family homes while raising rents.

Home Sales

New home sales cover residential properties only, and it takes five months to establish a trend for new houses sold. Preliminary new home sales figures are subject to revision due to the survey methodology and definitions used. The survey is primarily based on a sample of houses selected from building permits, and since a “sale” is defined as a deposit taken or sales agreement signed, this can occur prior to a permit being issued. An estimate of these prior sales is included in the preliminary sales figure, which on average is revised about 3%.

Existing-home sales are reported by the National Association of Realtors (NAR), and include single-family homes, townhomes, condominiums and co-ops. The series is based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions. It takes several months to establish a trend for existing homes sold. According to the NAR, a home must be built for one year before it is considered "existing". Therefore, if a builder sells a home and the buyer immediately sells it (flips it), it is not considered an existing home sale.

Construction Put in Place

Real construction includes both residential and nonresidential construction from private or public contracts. It may take two months to establish an underlying trend for total construction and as long as eight months for specific categories of construction.

FHFA House Price Index

The House Price Index (HPI) is published by the Federal Housing Finance Agency (FHFA) using data provided by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). It is a broad measure of the movement of single-family house prices and serves as a timely, accurate indicator of house price trends at various geographic levels. The HPI is a weighted repeat sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties. It is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single family properties are included. "Conforming" refers to a mortgage that both meets the underwriting guidelines of Fannie Mae or Freddie Mac and that doesn't exceed the conforming loan limit, a figure linked to an index published by the Federal Housing Financial Board. "Conventional" means that the mortgages are neither insured nor guaranteed by the FHA, VA or other federal government entity.

The FHFA house price index for all U.S. houses, including purchases and refinancings.

House price purchase only index includes only purchase price data; it does not include refinancings.

Industrial Production

The Federal Reserve's monthly index of industrial production and the related capacity indexes and capacity utilization rates cover manufacturing, mining, and electric and gas utilities. The industrial sector, together with construction, accounts for the bulk of the variation in national output over the course of the business cycle. The industrial detail provided by these measures helps illuminate structural developments in the economy. The release also includes monthly indexes on the use of electric power in manufacturing and mining.

The production index measures real output and is expressed as a percentage of real output in a base year, currently 2007. The capacity index, which is an estimate of sustainable potential output, is also expressed as a percentage of actual output in 2007. The production indexes are computed as Fisher indexes since 1972; the weights are based on annual estimates of value added. The rate of capacity utilization equals the seasonally adjusted output index expressed as a percentage of the related capacity index.

For the period since 1997, the total IP index has been constructed from 312 individual series based on the 2002 North American Industrial Classification System (NAICS) codes. These individual series are classified in two ways: (1) market groups, and (2) industry groups. Market groups consist of products and materials. Total products are the aggregate of final products, such as consumer goods and equipment, and nonindustrial supplies (which are inputs to nonindustrial sectors). Materials are inputs in the manufacture of products. Major industry groups include three-digit NAICS industries and aggregates of these industries — for example, durable and nondurable manufacturing, mining, and utilities.

Manufacturing consists of those industries included in the NAICS definition of manufacturing plus those industries – logging and newspaper, periodical, book and directory publishing – that have traditionally been considered to be manufacturing and included in the industrial sector.

The Federal Reserve Board constructs estimates of capacity and capacity utilization for industries in manufacturing, mining, and electric and gas utilities. For a given industry, the capacity utilization rate is equal to an output index (seasonally adjusted) divided by a capacity index. The Federal Reserve Board’s capacity indexes attempt to capture the concept of sustainable maximum output—the greatest level of output a plant can maintain within the framework of a realistic work schedule, after factoring in normal downtime and assuming sufficient availability of inputs to operate the capital in place.

2010 IP Weights*

By Market Group:
Final Products and Nonindustrial Supplies – 54.60 (Consumer Goods – 28.20 [durable 6.31, nondurable 21.89], Business Supplies – 9.93, Business Equipment – 9.54, Construction Supplies – 4.10), Materials – 45.40 (Non-energy – 28.53, Energy – 16.87)

By Industry Group:
Manufacturing – 75.55 (NAICS Manufacturing – 72.39 [Durable 38.02, Nondurable 34.38], Non-NAICS – 3.16), Utilities – 11.22 (Electric – 9.67, Natural Gas – 1.55), Mining – 13.23
*The proportion data are the relative weights for the rates of change for each series in the computation of the change in total industrial production in the following year

Manufacturers’ Shipments and Durable Goods Orders

The purpose of the Manufacturers' Shipments, Inventories, and Orders (M3) survey is to provide broad-based monthly statistical data on current economic conditions and indications of future production commitments in the manufacturing sector. The M3 is based upon data reported from manufacturing establishments with $500 million or more in annual shipments. Units may be divisions of diversified large companies, large homogenous companies, or single-unit manufacturers in 89 industry categories. The M3 provides statistics on manufacturers' value of shipments, new orders (net of cancellations), end-of-month order backlog (unfilled orders), end-of-month total inventory, materials and supplies, work-in-process, and finished goods inventories (at current cost or market value). Data are collected and tabulated predominantly by 6-digit NAICS (North American Industry Classification System). The survey has been conducted monthly by the US Census Bureau since 1957.

Data are collected by FAX image capture (PFIRS) and Internet-based survey form (Census Taker). Data describe activities taking place during the calendar month. There are two press releases per month. The first, Advance Report on Durable Goods Manufacturers' Shipments, Inventories, and Orders is available about 18 working days after each month. The second, Manufacturers' Shipments, Inventories, and Orders includes durable and non-durable manufacturing and is available about 23 working days after each month. Bureau of Economic Analysis uses M3 data to make GDP estimates and compiles the principal economic indicator series. The Federal Reserve Board, Department of Treasury, and Council of Economic Advisers use M3 data to develop fiscal and monetary policy. Corporate economists, trade associations, news media, academia, investment consultants, and researchers use M3 data for analysis and forecasting of future economic conditions.

New orders, as reported in the monthly survey, are net of order cancellations and include orders received and filled during the month as well as orders received for future delivery. They also include the value of contract changes which increase or decrease the value of the unfilled orders to which they relate.

Durable goods orders account for just under half (approximately 44%) of total manufacturing new orders.

Durable goods, excluding transportation, account for approximately 74% of durable goods orders and 33% of total manufacturing new orders.

New orders for nondefense capital goods account for approximately 37% of durable goods orders and 17% of total manufacturing new orders.

New orders for nondefense capital goods, excluding aircraft, account for approximately 15% of total manufacturing new orders and 89% of total nondefense capital goods. This measure is often used to predict future business investment.

The value of shipments data in the MS survey represents net selling values, f.o.b. plant to the customer, after discounts and allowances and excluding freight charges and excise taxes.
Shipments of nondefense capital goods, excluding aircraft, account for approximately 14% of total shipments and 93% of total nondefense capital goods shipments. This measure is often used to predict future business investment.

Durable goods, unfilled orders account for 100% of manufacturing unfilled orders.
Durable goods unfilled orders, excluding transportation, account for approximately 42% of total unfilled orders.

Unfilled orders for nondefense capital goods account for approximately 59% of total manufacturing unfilled orders.

Unfilled orders for nondefense capital goods, excluding aircraft, account for approximately 23% of total manufacturing unfilled orders and 39% of total unfilled nondefense capital goods.

(All proportions above are average weights, Jan. 2011 - Mar 2012)

Manufacturing & Trade

The estimates in the Manufacturing and Trade: Inventories and Sales report are based on data from three surveys: the Monthly Retail Trade Survey, the Monthly Wholesale Trade Survey, and the Manufacturers' Shipments, Inventories, and Orders Survey. Manufacturing and Trade: Inventories and Sales reports are released approximately six weeks after the close of the reference month. They contain preliminary figures for the current month and final figures for the previous month. Statistics include sales, inventories and inventories-to-sales ratios for the combined domestic activities of retailers', wholesalers' and manufacturers. The report also includes retail inventories and retailers' inventories-to-sales ratios.

ISM Manufacturing
The Manufacturing ISM Report On Business® is based on data compiled from monthly replies to questions asked of purchasing executives in more than 400 industrial companies. Membership of the ISM Business Survey Committee is diversified by NAICS category, based on each industry's contribution to Gross Domestic Product (GDP). Twenty industries in 50 states are represented on the committee. The 20 manufacturing NAICS codes are: Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Wood Products; Paper Products; Printing & Related Support Activities; Petroleum & Coal Products; Chemical Products; Plastics & Rubber Products; Nonmetallic Mineral Products; Primary Metals; Fabricated Metal Products; Machinery; Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Furniture & Related Products; and Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies). The report is issued on the first business day of the month.

The PMI is a composite index based on the seasonally adjusted diffusion indices for the following five indicators at equal weights (20% each): New Orders, Production, Employment, Supplier Deliveries, and Inventories. A PMI reading above 50% indicates that the manufacturing economy is generally expanding; below 50%, that it is generally declining. A PMI over 42.6%, over a period of time, indicates that the overall economy, or GDP, is generally expanding, below 42.6% that it is generally declining. The distance from 50% or 42.6% is indicative of the strength of the expansion or decline.
An Employment Index above 50.5%, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. A Prices Index above 49.4%, over time, is generally consistent with an increase in the BLS Index of Manufacturers Prices.

ISM Non-Manufacturing
The Non-Manufacturing ISM Report On Business® is based on data compiled from purchasing and supply executives nationwide. Membership of the Non-Manufacturing Business Survey Committee is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). The Non-Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation & Warehousing; Information; Finance & Insurance; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Public Administration; and Other Services (services such as Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services).

The NMI is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. An index reading above 50 percent indicates that the non-manufacturing economy in that index is generally expanding; below 50 percent indicates that it is generally declining.

Leading Indicators
The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging economic indexes are essentially composite averages of several individual leading, coincident, or lagging indicators. They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component — primarily because they smooth out some of the volatility of individual components. Historically, the cyclical turning points in The Conference Board LEI for the U.S. have occurred before those in aggregate economic activity, while the cyclical turning points in The Conference Board CEI for the U.S. have occurred at about the same time as those in aggregate economic activity.

The composite index of leading indicators is comprised of the following 10 indicators:

1. Average weekly hours, manufacturing (0.2781)
2. Average weekly initial claims for unemployment insurance (0.0334)
3. Manufacturers' new orders, consumer goods and materials (0.0811)
4. ISM new orders index (0.1651)
5. Manufacturers' new orders, nondefense capital goods excluding aircraft (0.0356)
6. Building permits, new private housing units (0.0272)
7. Stock prices, 500 common stocks (0.0381)
8. Leading Credit IndexTM (0.0794)
9. Interest rate spread, 10-year Treasury bonds less federal funds (0.1069)
10. Average consumer expectations for business conditions (0.1551)
    

The composite index of coincident indicators is comprised of the following 4 indicators:

1. Employees on nonagricultural payrolls (0.2597)
2. Personal income less transfer payments (0.1357)
3. Industrial production (0.0728)
4. Manufacturing and trade sales (0.5318)
   

Notes:
The component factors (numbers in parentheses) are inversely related to the standard deviation of the month-to-month changes in each component. They are used to equalize the volatility of the contribution from each component and are “normalized” to sum to 1. When one or more components are missing, the other factors are adjusted proportionately to ensure that the total continues to sum to 1.

U.S. International Trade

The Census basis goods data are compiled from the documents collected by the U.S. Customs and Border Protection and reflect the movement of goods between foreign countries and the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and U.S. Foreign Trade Zones. They include government and non-government shipments of goods, and exclude shipments between the United States and its territories and possessions, transactions with U.S. military, diplomatic and consular installations abroad, U.S. goods returned to the United States by its Armed Forces, personal and household effects of travelers, and in-transit shipments. The General Imports value reflects the total arrival of merchandise from foreign countries that immediately enters consumption channels, warehouses, or Foreign Trade Zones.

The Trade Balance is the difference between goods and services exported from the U.S. to other countries less goods and services imported to the U.S from other countries. Exports are valued at the f.a.s. (free alongside ship) value of merchandise at the U.S. port of export, based on the transaction price including inland freight, insurance, and other charges incurred in placing the merchandise alongside the carrier at the U.S. port of exportation. For imports, the value reported is the U.S. Customs and Border Protection appraised value of merchandise; generally, the price paid for merchandise for export to the United States. Import duties, freight, insurance, and other charges incurred in bringing merchandise to the United States are excluded.

Exchange & Interest Rates

This table is updated on a weekly basis (Tuesday mornings, Wednesdays when the Monday is a Federal holiday). The most recent data are for the prior week ending Friday.
The FRB Trade-weighted dollar series is a weighted average of the foreign exchange values of the U.S. dollar against a subset ('major' currencies) of currencies in the broad index that circulate widely outside the country of issue. The weights are derived from those in the broad index. Countries whose currencies are included in the major currencies index are the Euro Area, Canada, Japan, the United Kingdom, Switzerland, Australia, and Sweden. The Euro Area includes Germany, France, Italy, the Netherlands, Belgium/Luxembourg, Ireland, Spain, Austria, Finland, Portugal & Greece. This series is part of the FRB G.5 statistical release.

The foreign 3-month interest rate is the 3-month Eurodollar deposit (London) interest rate. Bid rates are for Eurodollar deposits (at 9:30 a.m. London time) annualized, using a 360-day year. The bid rate (LIBID) is the rate at which banks are ready to accept deposits. The offered rate (LIBOR) is the banks' lending rate. This series is part of the FRB H.15 release.

Also in this table is the 3-Month rate for Financial Commercial Paper, a rate from the Fed's statistical release H.15. Quoted on a discount basis. There is a break in the series: since 9/2/97 FRB uses interpolated data from the Depository Trust Company. Trades represent the offer side. Annualized using a 360-day year.

Gross Domestic Product

Gross Domestic Product (GDP) is the most widely recognized measure of the nation's production. In particular, the quarterly estimates of inflation-adjusted GDP provide the most comprehensive picture of current economic conditions in the United States. Estimates for GDP are released on a monthly basis, although the data is reported at a quarterly frequency. Estimates for each quarter are reported towards the end of each month, during each of the three months following the actual quarter. The three GDP releases are referred to as the Advance, Second, and Third Estimates (formerly Advance, Preliminary, and Final).

GDP measures the value of final goods and services produced in the United States in a given period of time. As long as the labor and property are located in the United States, the suppliers (that is, the workers and, for property, the owners) may be either U.S. residents or residents of the rest of the world. While GDP is used as an indicator of economic progress, it is not a measure of well-being (for example, it does not account for rates of poverty, crime, or literacy).

Components of GDP/Related series:

Final Sales - GDP less change in private inventories.
Personal Consumption Expenditures - Purchases of goods and services by households and by nonprofit institutions serving households. These goods and services include imputed expenditures on items such as the services of housing by a homeowner (the equivalent of rent), financial and insurance services for which there is no explicit charge, and medical care provided to individuals and financed by government or by private insurance. Major categories of consumption include durable goods (such as motor vehicles and parts; furniture and household equipment), nondurable goods (such as food; clothing and shoes; gasoline, fuel oil, and other energy goods), and services (such as housing; household operation; transportation; medical care; recreation).

Business fixed investment - Purchases of fixed assets (equipment, software, and structures) by private businesses that contribute to production and have a useful life of more than one year.

Equipment & Software - Includes the following major categories: Information processing equipment and software, industrial equipment, transportation equipment, and other equipment.

Information processing (E&S) - Includes the following subcategories: computers and peripheral equipment, software, communications equipment, instruments, photocopy and related equipment, and office and accounting equipment.
Residential Fixed Investment - Private residential structures purchased by people to live in and by landlords to rent out. Also included is residential equipment that is owned by landlords and rented to tenants.

Government consumption and investment - Final expenditures by Federal, state, and local governments. Government consumption expenditures represents the value of goods and services provided to the public by governments (such as defense or education). Gross investment consists of government purchases of equipment, software, and structures to use in producing those goods and services. These expenditures do not include government spending for social benefit programs (such as Medicaid), interest payments and subsidies.

Exports - Goods and services that are sold or transferred by U.S. residents to residents of the rest of the world.

Imports - Goods and services that are sold or transferred by the rest of the world to U.S. residents. Imports are a deduction in the calculation of GDP.

Net exports - Equals exports minus imports.

Price index GDP - The GDP price index essentially measures the difference between nominal GDP and real GDP.

Change in Nonfarm Business Inventories - Change in private inventories, or inventory investment, is a measure of the value of the change in the physical volume of the inventories - additions less withdrawals - that businesses maintain to support their production and distribution activities.  Inventory investment is one of the most volatile components of GDP, giving it an important role in shortrun variations in GDP growth. It also plays a key role in the timing, duration, and magnitude of business cycles, as unanticipated buildups in inventories may signal future cutbacks in production, and unanticipated shortages in inventories may signal future pickups in production.  The measure included in this report is only for nonfarm private businesses.