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BLS to publish quarterly data from Consumer Expenditure Survey.

Expenditures for many consumer items vary by season. For example, purchases in the fourth quarter are higher for many apparel and entertainment items due to holiday spending. Specifically, the average expenditure for jewelry and watches in the fourth quarter is double that in any other quarter, and television, radio, and sound equipment purchases are a third higher. Quarterly expenditure data are useful for discerning these seasonal movements, as well as for assessing economic changes more quickly. Examining quarterly expenditures provides information that may be masked in annual results.

The Interview portion of the Consumer Expenditure Surveys is a quarterly survey. In the past, however, annual estimates have been published based on one or two years of data. In the fall of this year, with the release of survey results ftom second-quarter 1987, the Bureau will begin publishing quarterly data. The quarterly estimates are presented at annual rates. That is, the values refer to expenditures in the particular quarter but are multiplied by

4. This facilitates analysis in relating expenditures to income and comparisons with earlier annual data. Tables I and 2, based on data from the first quarter of 1987, illustrate the type of information that will be available in the new quarterly release.

With the quarterly publication of data, the estimates will be available to users sooner than in the past. However, there are limitations to these estimates. First, for some analytical uses, seasonally adjusted data are desired. BLS is currently working on seasonally adjusting the expenditure survey data. An approximation of seasonal adjustment can be obtained by comparing any quarter with the same quarter of a year ago or earlier years. The analysis of trend data presented in this report follows this practice.

Second, there are fewer reports in a quarter for infrequently purchased items than there are for a year. For example, the percent of consumer units' reporting vehicle purchases is approximately 6 percent per quarter. On the other hand, gasoline and motor oil, which is a recurring expense, is reported by approximately 88 percent of the consumer units interviewed per quarter. A sufficient level of reporting is required in order to obtain statistically reliable estimates. Therefore, the tables based on quarterly data show less detail than those based on annual data.' For the same reason, the information on characteristics of consumer units is also shown with less detail than that released based on a year's worth of data. For example, units with reference persons ages 25 to 34 and 35 to 44 have been collapsed into one age group, 25-44.

Seasonal variations

When comparing unadjusted quarterly data, seasonal variations become apparent, The top portion of table 3 shows each expenditure as a share of total expenditures for the period 1984 to the first quarter of 1987. A sample of the seasonal changes that can be observed in the Consumer Expenditure Survey data are discussed below. Chart 1 highlights some of these changes.

Owned dwellings increased as a share of total expenditures in each of the fourth quarters as compared to the first three quarters. Most of this increase is due to the fact that many consumers pay their property taxes at the end of the calendar year.

Because of the holidays, entertainment and apparel increased as a share of total expenditures in all of the fourth quarters examined (chart panel 4). In dollar terms, the average expenditure for jewelry and watches is at least twice as high in the fourth quarter as in other quarters. Expenditures for other apparel items, such as coats and sweaters, also are higher in the fourth quarter. As a share of total expenditures, total entertainment-which includes televisions, radios, sound equipment, and photographic equipment and supplies, as well as admissions-is about 25 percent higher in the fourth quarter than in the three preceding quarters of the year.

Utilities, fuels, and public services increase as a share of total expenditures in the first quarter, when the weather is coldest (chart panel 1).

Transportation as a share of total expenditures peaks in the second quarter, largely because of vehicle purchases (chart panel 2). However, the average expenditures for public transportation, which includes airline fares and leased and rented vehicles, are higher during the third quarter when most families take vacations.

During the busy summer months of July, August, and September, families eat out more often. This is reflected in both the increase in dollars spent and in the share of total expenditures allocated towards food away from home (chart panel 3).

Year-to-year changes

The bottom portion of table 3 shows percent changes in selected types of expenditures from the same quarter a year earlier, for the period 1984 to first-quarter 1987. Among the noteworthy findings:

Expenditures for utilities, fuels, and public services decreased slightly in the first two quarters of 1985, compared to the same quarters in 1984. There was a slight increase in expenditures for the third and fourth quarters of 1985 as against the respective quarters of 1984. For 1986, expenditures again decreased ftom the year-earlier period in the first two quarters, increased in the third quarter, and decreased in 'the fourth quarter. A 2-percent decrease in these expenditures was reported in the first quarter of 1987, similar to the yearto-year decline noted for the first quarter of 1986.

Expenditures on owned dwellings and rented dwellings increased anywhere ftom 7 percent to 14 percent over the year-earlier level each quarter from 1984 to 1985. More moderate increases occurred between 1985 and 1986, with the exception of the last quarter of 1986. In that quarter, expenditures on owned dwellings decreased 1.2 percent, compared to the same quarter in 1985.

Gasoline and motor oil expenditures decreased for every quarter with the exception of the last quarter in 1985. The most notable decreases for the period occurred from the second quarter of 1986 through the first quarter of 1987. These significant decreases ranged from 10 percent to 17 percent, which reflected falling gasoline prices during the same period as measured by the Consumer Price Index.

Description of the survey

The principal objective of the Consumer Expenditure Surveys is to collect data that provide a continuous now of information on the buying habits of American consumers. The survey had been conducted about every 10 years in the past, but has been ongoing since 1980, with rotating panels of participants.

The survey, which is conducted by the Bureau of the Census for the Bureau of Labor Statistics, consists of two components: (1) a Diary or recordkeeping survey completed by respondents for two consecutive 1 -week periods, and (2) an Interview survey in which the expenditures of consumer units are obtained in five interviews conducted every 3 months. Each component of the survey queries an independent sample of consumer units that is representative of the U.S. population. The Interview sample is selected on a rotating panel basis, targeted at 5,000 consumer units each quarter. As indicated earlier, the data in this article and those in the forthcoming quarterly release are based on the Interview survey,

The Interview survey is designed to obtain data on the types of expenditures and income that respondents can be expected to recall for a period of 3 months or longer. These include large expenditures, as for property, automobiles, and major appliances, or expenditures that occur on a regular basis, such as rent, utility payments, or insurance premiums, The Interview survey covers approximately 95 percent of all expenditures.

The data presented here and in the new quarterly release should be interpreted with care. The quarter-toquarter changes are more volatile than year-to-year changes because of seasonal variation and smaller sample sizes. The expenditures are averages for all consumer units with the characteristics indicated, even if few units actually had expenses for a particular item in the reference period. Therefore, the average may be considerably lower than the expense incurred by consumer units that actually purchased the item.

The less frequently an item is purchased, the greater the difference between the average for all consumer units and the average for those purchasing. An individual consumer unit may spend more or less than the average, depending on its particular characteristics, tastes, and preferences. But even within groups with similar characteristics, the distributionof expenditures varies substantially. These points should be considered when relating reported averages to individual circumstances.

Users should also keep in mind that the prices for many goods and services have risen since the period represented by the data shown here. For example, rent as measured by the Consumer Price Index rose about 3.8 percent between March 1987 and April 1988.

In addition, sample surveys are subject to two types of errors, Sampling errors occur because the data are collected from a representative sample rather than the entire population. Sampling errors for quarterly data are considerably higher than those for annual data, depending on the expenditure category. Nonsampling errors result ftom the inability or unwillingness of respondents to provide correct information, differences in interviewer ability, mistakes in recording or coding, or other processing errors.

Quarterly publication of expenditure data will provide estimates of changes in spending patterns as they occur during the year. In general, these patterns are stable, but the effect of sudden shocks to the economy can be examined more quickly. In addition, the ability to study seasonal differences in expenditures should be fruitful for many users.
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Title Annotation:Bureau of Labor Statistics
Author:Boyle, Maureen
Publication:Monthly Labor Review
Date:Jul 1, 1988
Previous Article:Finance, insurance, and real estate: employment growth during 1982-87.
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