The national income and product accounts: preliminary, revised estimates, 1977

Survey of Current Business, May, 1984 by Gerald F. Donahoe

Government purchases of goods and services.--The upward revision in government purchases is largely due to State and local highway construction. The presently published series is based on the Census Bureau's series on the value of new construction put in place. BEA has adjusted these data based on an analysis of comparable expenditure data from the Census Bureau's Governmental Finances and from the Federal Highway Administration's Highway Statistics. Charges against GNP

Compensation of employees.--The revision in compensation of employees is moderate and largely in other labor income. Most of the revision is in employer contributions for group health insurance, based on revised data from the Health Care Financing Administration.

Rental income of persons.--Most of the downward revision in rental income of persons is in the net income of owner- and tenant-occupied nonfarm dwellings. For these parts, net income is derived as gross rental receipts less expenses. Gross rental receipts is revised up slightly (see earlier discussion of PCE). However, expenses are revised up much more, because the list of expenses has been expanded. (The new list includes all types of expenditures that are considered ordinary and necessary as deductions under income tax regulations.) These revisions lead to a downward revision in rental income of $7 billion, including $5 billion to the owner-occupied part. Also contributing to the downward revision are upward revisions in mortgage interest and real estate taxes--two expense items reflected in the presently published expense estimate. These revisions are due to the incorporation of data from the Survey of Residential Finance (a survey associated with the 1980 Census of Population and Housing.)

Net interest.--Most of the upward revision in net interest is due to a larger estimate of imputed interest paid by private noninsured pension plans, based on Internal Revenue Service tabulations of employee benefit plans described earlier. This revision is partly offset by an upward revision in monetary interest received by these plans, which is deducted in calculating net interest. An upward revision in mortgage interest paid, discussed earlier under rental income of persons, also contributes to the upward revision. Other NIPA components

Other NIPa components are revised slightly or not at all. Revisions in the remaining accounts (accounts 2-5) are largely due to revisions in the national income and product account.