Federal economic statistics: Current uses, unmet needs, and directions for innovation

Introduction

How many jobs did the economy add last year? How many workers are currently unemployed, and which workers are most at risk of losing work due to AI? How much have the prices of essential items like groceries and housing risen since the pandemic? How many children live in poverty, and what public policies most effectively lift families out of poverty? How unequally is wealth distributed in the United States, and which policies have narrowed this gap over time? Providing answers to questions like these is essential—for monitoring and understanding the performance of the economy, for crafting public policy to effectively address challenges facing households and the nation, and for informing business and financial decisions across sectors.

The answers depend, in part, on information that requires the collection of data and production of economic statistics. And effectively serving the interests of the nation as a whole requires more specifically national statistics—data series that not only cover the whole of the country but also allow for analysis and comparisons across geographies, demographic groups, and over time, using common sources and methods. Meeting economic policy objectives at the national level, such as a low overall level of unemployment, requires national employment statistics. And because in both their production and use such data and statistics have the properties of a public good, it is both efficient and serves the nation for the federal government to collect these data and produce such statistics by investing in and operating a federal statistical system.¹

Recent and ongoing threats to the stability and independence of the federal statistical system, its component agencies, and its leadership have served to underscore this system’s economic and social value for a broad set of stakeholders.² Faced with uncertainty around the future of the data and statistics they depend on, many of these stakeholders have sought to raise the salience of protecting the current system, and further, they have begun to look ahead, asking how a future federal statistical system can be designed and built on firmer foundations and strengthened to better serve needs of users and, ultimately, the nation. In this paper, we highlight the importance of current federal economic data and statistics for key users and synthesize recent research and advances in data collection and statistical production, suggesting directions for continued innovation. For each of several categories of economic data and statistics, we discuss briefly the main questions and needs of key data users, how current data and statistics are used, and unmet needs and directions for innovation. The user groups and perspectives that inform this review include:

• Government: Policymakers and officials at all levels of government, including federal, state, and local governments, as well as key agencies of government such as the Federal Reserve and public-serving institutions such as workforce development boards.
• Businesses: Both small and large businesses across all sectors of the economy, including financial and nonfinancial firms as well as industry-serving groups and organizations.
• Researchers: Including not only academic researchers but also applied researchers working in think tanks and at research and philanthropic organizations.
• Civil society: Users such as the media, advocacy groups and community organizations, social sector actors and nonprofits, and citizens and voters themselves.

Taking a user perspective allows for an analysis that starts with the purpose that these data and statistics are intended to serve, highlighting their current value and identifying unmet needs. Moreover, considering the uses across a range of groups is important for understanding the breadth of use cases for these data, as different users often ask different questions, creating a range of potentially productive directions for innovation. For example, policymakers and business groups often seek a clear recommendation, sometimes in the form of a single answer for a point in time (Hughes-Cromwick and Coronado 2019), while researchers tend to ask questions seeking to identify trends and issues, (e.g., “what is the pay gap between one group and another?”) as well as their causes (“why does this problem persist?”).

We focus our review on several key categories of economic data and statistics which are central to a range of important questions across many groups of users. Furthermore, our focus is on issues for which emerging research, ongoing economic trends, or other factors have suggested new directions that federal data and statistics could take or new ways they could serve the needs of key users. We organize this discussion around key economic concepts that include:  

• Employment: Data and statistical series on concepts such as unemployment, vacancies, wages, and working conditions, overall and by occupation and industry.
• Prices: Statistical series including both key consumer and producer price indices, as well as for key categories such as food and shelter.
• Income: Measures of income distributions—such as median household income—both pre- and post-tax and transfer, from both wage and salary and non-wage sources, as well as derived indicators such as poverty rate measures.
• Wealth: Data and statistics on levels and the distribution of assets and debt, in total and for types of assets (household, business, and more).

For each category of data, we provide a brief discussion of some of the central questions they are intended to provide information on, highlight a selection of current measures and series, identify unmet needs, and discuss directions for innovations that could fill data gaps. The paper concludes with a discussion of cross-cutting issues related to how current federal statistics and data could meet the needs of users in general, such as the need for enhanced access, distribution, and presentation, as well as greater disaggregation. 

We note at the outset several important ways in which our discussion is targeted and not intended to be a full or systematic review of these issues: First, our discussion of current data users and uses is intended to be illustrative and not exhaustive—a full catalog of the uses of federal economic data is beyond the scope of a single, short paper. Second, our choice to highlight directions for innovation is not intended to characterize the current system by its inadequacy. If anything, our goal is the opposite—to identify ways in which an already strong and essential system can remain at the frontier. Third, in identifying unmet needs and directions for innovation we have focused on more conceptual issues and de-emphasized some of the important technical issues that are covered more thoroughly in other research.

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