C-SPAN program features BLS union membership data

Mike Horrigan, the BLS Associate Commissioner for Employment and Unemployment Statistics, appeared on the “America by the Numbers” segment of C-SPAN’s Washington Journal program on Friday, March 27. Dr. Horrigan spoke about data on union membership.

Watch the video: C-SPAN Washington Journal (March 27, 2015)

Why This Counts: Medical Care Services in the CPI

The U.S. Bureau of Labor Statistics is best known for our monthly job and inflation reports. We also publish data on many other topics, ranging from how Americans spend their time and money to workplace injuries and the growth of entrepreneurship. My new blog series, “Why This Counts,” will explain why we conduct our surveys and how people can use the data at work and home. I hope this series will take the mystery out of our data and make our work come to life for both new and advanced users.

In Tuesday’s Consumer Price Index release, one interesting item caught my eye. The seasonally adjusted index for medical care services declined 0.2 percent in February 2015, its first decline since November 1975. That’s a long time ago—I was still in college then! Historically, the medical care services index has tended to increase more sharply than the overall price level.

This seems like the perfect time to define “medical care services” in more detail and explain why we measure this index.

First, the basics. The Consumer Price Index (CPI) measures the average change over time in prices paid by consumers for a market basket of goods and services. The CPI affects nearly all Americans because of the many ways it is used, from making changes in the federal income tax structure to cost-of-living wage adjustments for millions of American workers.

One important part of the CPI market basket (that is, the set of goods and services we price for the CPI) is medical care. Reflecting actual spending patterns, medical care now accounts for about 8 percent of the market basket for the CPI for all urban consumers (CPI-U). We call this share of the market basket its “relative importance,” and we use these shares to weight price changes as we calculate the average price change. Medical care in the CPI is broken down into medical care commodities (mostly prescription and nonprescription drugs) and medical care services.

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Medical care services is the larger of the two components, representing over three-fourths of the medical care weight and about 6 percent of the entire CPI market basket.

Exactly what does the CPI price in medical care services? The largest components are hospital services and physicians’ services. Also included are dental services, services by other medical professionals, eyeglasses and eye care, and nursing homes.

In other words, the medical care services index in the CPI reflects the cost to consumers not only of trips to the doctor’s office or to the hospital, but also of trips to the dentist, psychologist, or chiropractor, or even buying a new pair of glasses or staying in a nursing home.

Not surprisingly, medical care has a long history in the CPI, although the composition of the index has changed over time. In the 1930s, when medical care represented only about half the weight it does now, the medical care part of the CPI included specific entries like castor oil, tonsillectomies and, quaintly, “house visits” by doctors.

Like other CPI data, prices for medical care services are collected monthly in a sample of metropolitan areas across the country. Of course, collecting medical care prices isn’t as simple a matter as collecting prices for some other goods in the CPI, such as bananas or gasoline.

Collecting these medical care prices allows us to accurately track medical care spending patterns.

What should we make of this month’s decline in the medical care services index? My staff often says that “one month does not make a trend.” Nevertheless, even with the recent slowdown in the pace of medical care services inflation this number is clearly unusual. So, we need to keep watching over the coming months to see if this is the start of a new trend or a one-time occurrence.

Government Statistics in a World of Big Data

“Big data” is a buzzword you hear often these days. Long before the term even existed, BLS and other federal statistical agencies have used alternative data sources—that today would be labeled “big data”—to revolutionize the way we do business.

Last week I participated in a panel, sponsored by the American Enterprise Institute, to discuss the current and future role of federal statistical agencies in this era of big data. (See the video of the discussion.)

My fellow panelists and I agreed on one point early on: our dislike for the term “big data”!

Former U.S. Census Bureau Director Robert Groves prefers the term “organic data,” while Burning Glass CEO Matthew Sigelman refers to big data as “open market” data sources. Billion Prices Project cofounder Alberto Cavallo defines big data as “new technologies for data collection.”

Whatever term we use, we all agreed that government and private-sector data should be viewed as complementary or mutually reinforcing.

During my presentation, I discussed how big data can complement government surveys. I talked about how the Billion Prices Project, which Cavallo cofounded at the Massachusetts Institute of Technology, relates to the BLS Consumer Price Index.

The Billion Prices Project provides the extreme timeliness of a daily price index and large sample sizes that serve the almost instant needs of some data users, particularly investors.

The Consumer Price Index measures changes in the cost of living for a representative consumer buying a representative market basket. This comprehensive approach is critical to serving policymakers, Social Security recipients, and many others who use the Consumer Price Index in government programs and private contracts.

Far from being a competition, these two approaches provide important, though different, ways to measure and track the economy. Or, as I like to say, two lenses are always better than one.

I was happy to learn the panelists appreciate the key role that federal statistical agencies must play in the emerging world of big data. All parties need to work together to better use all the information we have, whether survey data or big data. Indeed, blending these two types of data creatively will produce new and better ways to inform sound decision making by our nation’s businesses, families, and policymakers. That’s a win-win for everyone.

President’s 2016 budget would fund data on export prices and poverty measures

A few weeks ago President Obama presented his fiscal year 2016 budget request to Congress. That budget proposes $632.7 million in funding for BLS, an increase of $40.5 million over our fiscal year 2015 funding. The 2016 budget proposes new funding to help BLS meet some important data needs. I have asked David Friedman, the acting Associate Commissioner for Prices and Living Conditions, to explain how we plan to use the proposed funding to improve prices and consumer spending information.

The President’s 2016 budget asks Congress to restore funding that would let BLS continue producing and publishing export price indexes. These indexes measure the price change of goods and services U.S. firms sell to foreign buyers. In fiscal year 2014, we announced plans to stop publishing export price indexes because of reduced funding. However, before we carried out the planned cuts, the Administration looked for and found other temporary funding sources. This money is only enough to produce and publish export price indexes until September 30, 2015. This budget proposal would allow us to continue producing and publishing export price indexes in fiscal year 2016 and beyond.

BLS publishes import and export price indexes, and both are critical for understanding how our nation’s economy connects to the world economy. Export price indexes help policymakers and businesses understand trends in trade balances and how well U.S. firms compete in international markets. The Bureau of Economic Analysis uses export price indexes to estimate real Gross Domestic Product, which measures all the goods and services the nation produces. BLS measures of productivity and costs also rely on export price indexes. A recent Beyond the Numbers article showed that no other data sources are substitutes for export price indexes.

The President’s 2016 budget also proposes funds for BLS to produce spending measures that would help the U.S. Census Bureau measure poverty more accurately. Poverty measures are essential for understanding hardship and prosperity in our economy. Other federal agencies use these measures to improve conditions for the poor. The official U.S. poverty measure began in the 1960s and has not changed substantially since then. Many observers have criticized the measure for several flaws. In particular, it does not account for many government aid programs. The alternative poverty measures the Census Bureau would produce from BLS spending data would not replace the official measure; instead they would provide a broader view of hardship. If Congress funds this proposal, it would allow us to:

  1. Release consumer spending data more quickly to help the Census Bureau produce alternative poverty measures each year.
  2. Add questions to the Consumer Expenditure Survey on topics such as school breakfasts and lunches and help paying for home heating and other household expenses.
  3. Continue research to improve how federal agencies measure poverty.

If Congress funds the BLS proposal in the coming year, it would allow us to strengthen our partnership with the Census Bureau on this important national issue. Without the funding, our ability to be a full participant in development and maintenance of the supplemental poverty measure is not possible.

Why This Counts: Volunteering in the United States

The U.S. Bureau of Labor Statistics is best known for our monthly job and inflation reports. We also publish data on many other topics, ranging from how Americans spend their time and money to workplace injuries and the growth of entrepreneurship. My new blog series, “Why This Counts,” will explain why we conduct our surveys and how people can use the data at work and home. I hope this series will take the mystery out of our data and make our work come to life for both new and advanced users.

We recently released data on volunteering in the United States. About 62.8 million people volunteered for an organization at least once between September 2013 and September 2014. That’s 25.3 percent of the nation’s civilian population age 16 and older.

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Why do we produce these volunteering data, and how do they affect you?

The mission of BLS and the other federal statistical agencies is to provide quality, unbiased data to support better decisions. Data about volunteers show how volunteering in the United States may be changing. People in communities across the country can use the data to understand civic engagement.

The latest volunteering data come from questions asked in the September 2014 Current Population Survey. That’s the monthly household survey that collects information about people who are working, looking for work, or not in the labor force.

The Corporation for National and Community Service provides funding to ask the questions about volunteering. That federal agency helps Americans improve the lives of their fellow citizens through service.

Volunteers are people who performed unpaid volunteer tasks through or for an organization at any point during the survey reference year. (That’s September 1, 2013, through the week of September 12, 2014.) We ask questions about the number of hours people volunteered, the organizations they served, and the tasks they performed.

The Corporation for National and Community Service, charities, and others use the data to track national volunteering rates and conduct research on volunteer retention, services, and more.

The volunteer data track the number of volunteers in America, their characteristics, and the things they do to serve others. These data help volunteer organizations decide the best ways to recruit volunteers, care for seniors, help communities respond to disasters, teach people to read, and much more.

I’m happy that we produce these data to examine the important, though unpaid, contributions that volunteers make to our economy.