MNI INTERVIEW: Lawmakers Push For More Frequent US Income Data

Democratic U.S. lawmakers are pushing for the Bureau of Economic Analysis to produce more frequent quarterly disaggregated data on U.S. personal income, Congressman Jim Himes, who is advocating Commerce Department funding of the project and says more frequent data would help policymakers including those at the Federal Reserve, told MNI.

"You can't manage what you don't measure and aggregate measures in a economy as diverse as ours miss most of the story," said Himes, a Democrat of Connecticut, adding he thinks the measure will attract bipartisan support.

President Joe Biden's budget for fiscal year 2023 released in March included a USD2.7 million request to fund the initiative, which Democrats on the Committee including Himes are seeking to secure. Himes stressed the Commerce Department's next budgetary request should explicitly include funding for the project.

"This is one of those sorts of inexpensive, really important, possible changes that nobody really knows about, except for the economist for whom it's essential," said Himes, chairman of the House Select Committee on Economic Disparity and Fairness in Growth, in an interview.

"The headline number of 3.6% unemployment is obviously something we celebrate, but when you unpack that either geographically and look at the difference say between Boston and Lorain, Ohio, or if you unpack them by either age or race demographics you discover that there are pockets of serious economic distress embedded in that number."

In December, the Commerce Department released alongside its 2019 income data a feasibility study on its ability to produce quarterly releases. The government body said there are significant challenges that come with trying to create a higher-frequency and lower-latency data product, given the currently available data sources.

FED TRAJECTORY

The BEA's Distribution of Personal Income series which it started publishing in 2020 offers a picture of the distribution of growth, personal income and inequality among households. The only other comparable official quarterly estimates available on inequality are those extrapolated by the Federal Reserve in its Distributional Financial Accounts series.

Himes said the BEA's income distribution series should be released on a similar schedule to GDP growth figures and pointed to a recent letter his committee sent to Commerce Secretary Gina Raimondo urging the department to use resources to more frequently release data, quarterly rather than annually and on a two year lag.

The Congressman said policymakers would have acted differently if they had had the data over the last two years during the pandemic.

"If we could look at that in a more granular way I suppose you'd have the ability to sort of control a program with with sharper controls," he said. "If we had the capability to really closely monitor the effects of the economic impact payments or the effects of the PPP then we could learn the lessons much faster," he said, referring to the USD953-billion business loan Paycheck Protection Program.

With more frequent personal income data, Himes said the Fed could have moved on to a different policy trajectory earlier.

"I actually think the Fed would be a huge beneficiary of this because of course they're making almost monthly decisions about interest rates and their balance sheet," he said. "What they do with interest rates in some cases has a lot more impact than we do with fiscal policy."