Remarks to the World Congress May 12, 2008 Role of Official Statistics in a Modern Society: A U.S. Perspective Keith Hall Commissioner Bureau of Labor Statistics

What the future should bring The importance of services in our domestic and international economy Challenges and gaps in the measurement of services in the U.S. economy: Past, Present and Future Globalization and future measurement challenges

Services as a percent of U.S. GDP, % 59%

U.S. trade relative to GDP, % 28.9%

The growth in U.S. service sector employment as a share of total U.S. employment

Change in payroll employment during recessions,

The Growing Contribution of Non-Manufacturing Industries to U.S. Productivity: Private Business MFP Contribution of Non-manufacturing There still may be measurement problems for many industries, especially in finance, health care, education and construction. New data have been coming on line and the situation may be improving.

What the future should bring The importance of services in our domestic and international economy Challenges and gaps in the measurement of services in the U.S. economy: Past, Present and Future Globalization and future measurement challenges

Price indexes for domestically produced services Coverage of domestically produced, in-scope services in the BLS Producer Price Program has been a real success story, although even today, significant gaps in coverage remain.

In-scope services output covered by PPI, 2001 to 2007

Coverage of services Sectors with little or no coverage –Educational services –Arts, Entertainment, and Recreation –Management of Companies and Enterprises –Other Services (Repair and Maintenance) Significant gaps within covered sectors –Health Care and Social Assistance (office of dentists, continuing care retirement communities, freestanding ambulatory surgical and emergency centers ) –Finance and Insurance (credit card issuing and reinsurance) –Professional services (computer systems design, research and development) –Administrative and Support Services (telemarketing bureaus)

Depth of Coverage of Services Service industry coverage: –571 service industries –PPI publishes indexes representing : 100 service industries 125 retail and wholesale trade industries Planned increase in coverage of Wholesale Trade –PPI publishes 2 aggregate indexes for merchant wholesale trade –We plan to publish 18 wholesale trade 4 digit NAICS industries on a post-stratified basis International coverage of services: –We don’t have this as percent of output, just whether or not each country has service industry indexes – wait for Bonnie’s

FYI: CPI Services Measurement objective – average change over time in the prices paid by urban consumers for a market basket of consumer purchased services. Weight of services in the CPI ALL ITEMS Services Price change CPI services vs. commodities 1998 – 2007 Services % Commodities %

What the future should bring The importance of services in our domestic and international economy Challenges and gaps in the measurement of services in the U.S. economy: Past, Present and Future Globalization and future measurement challenges

Future challenges Capturing global movements of production and labor Capturing price changes when production shifts from being domestic to foreign sourced. The increasingly blurred distinction between Wholesale Trade and Manufacturing resulting from globalization trends