Unlike the neatly presented graphs on our brother site FRED, FRASER’s collections of statistical data often take a bit more time and effort to discover and make use of. Furthermore, measures and concepts used in economic discussions today (what FRED calls “headline figures“) are largely recent inventions.[1] That means that understanding economic history often requires first understanding the history of available economic data.
The best-known economic dataset (an “economic indicator”) is gross domestic product, better known as GDP, which attempts to measure the value of a country’s economy. GDP grew out of a number of 20th century attempts to measure the U.S. economy. With a quick online search, you can find a number of histories of GDP and its related measures written by economists, historians, and journalists, but you can also trace much of the history of national economic statistics right here on FRASER.
Up to and through much of the Great Depression, there was no standardized way to approximate the strength of the entire economy the way that GDP does now. Economists and policymakers relied on industrial production data, stock numbers, and even freight hauling data to give them a picture of the nation’s economic health.[2] The earliest 19th century statistics publications, such as the Department of Commerce’s Statistical Abstract of the United States, focused primarily on money and commodities, which were easily measured.
In discussing the economic realities of financing World War I, economist and founding member of the Federal Reserve Board Adolph C. Miller argued in 1918 that, since “no official or authoritative estimate of the current annual income of the people of the nation” had been made, the estimates of national income available at the time significantly underestimated the national economic situation. His calculations of national income used data patched together from the U.S. Census Bureau, Department of Agriculture, Geological Survey, and Bureau of Labor Statistics in an attempt to correct the perceived undercounting.[3] From its earliest years, the Federal Reserve attempted to fill in gaps in the understanding of the nation’s economic health by providing statistical releases, tracking not only banking and finance statistics but also industrial production, retail sales, and other indicators.
In the postwar years, Congress called for the Federal Trade Commission (FTC) to measure the nation’s wealth and income,[4] lamenting that “from the vast fund of statistical information in the nation we can only indicate tendencies, and then only with some uncertainty.”[5] This was a first step toward estimating the overall value produced by the U.S. economy—how much money the economy “earns.” Building on similar work by the Census Bureau, in 1926 the FTC published a report of its estimates. The FTC declared that the limitations of its study—which measured only “material wealth“—were “minor in comparison with what may by some be improperly expected of such an estimate.”
Throughout the 1920s, economists expanded and refined estimates of just how much the American economy was worth. In business circles, the development of these innovative national economic statistics was big news—but the new data were not quite the bellwether hoped for. For example, the December 28, 1929, issue of the Commercial and Financial Chronicle, published just two months after the stock market crash, cited a National Bureau of Economic Research (NBER) report boasting of “the almost steady upward trend of the nation’s income during the last two decades.”
Not long after the crash, the Great Depression began to be felt throughout the country, prompting Congress to again call for better economic data.[6] In response, the Department of Commerce’s Bureau of Foreign and Domestic Commerce, working with researchers from the NBER and led by economist Simon Kuznets, produced the seminal study “National Income, 1929-1932.” This report and its techniques set a new standard for measuring the U.S. economy. In the years following that first study, the Bureau, which later became the Bureau of Economic Analysis (BEA), shifted from highlighting early monthly indicators, such as department store sales, freight car loadings, and bank loans, to highlighting national income in its Survey of Current Business. The first regular publication of national income data, in the August 1934 Survey, came with strong warnings about the data’s preliminary nature and the “difficulties in accurate estimation.” These data were updated in November 1934 and annually thereafter, but national income did not feature in the monthly statistics until March 1938.
According to the BEA’s 2007 history of national income statistics, by the early 1940s, national income had become the most cited U.S. economic statistic. In May 1942, preliminary estimates of gross national product (GNP, a measure of national income) for 1929-41 were finally added to the Survey.[7] Measures of national income didn’t take top billing in the monthly business indicators until later in the 1940s, where they have stayed (under various names). In the mid-1970s, the Survey began publishing data comparing the relationships among gross national product, net national product, and national income, reflecting new techniques for estimating the strength of the economy. GNP remained the BEA’s headline figure until the switch to GDP in late 1991. The August 1991 Survey outlined the differences between the two measures and explained the reasoning behind the switch to GDP.
A deeper dive into FRASER can also bring up historical research and reports on GDP and its predecessors by Federal Reserve Banks, the Board of Governors, the Bureau of Labor Statistics, and others. When examining historic economic policy decisions, it can be enlightening to find out just what data were available and how they might have informed those decisions.
[1] Some of this article is based on the following article: Carol S. Carson. “The History of the United States National Income and Product Accounts: The Development of an Analytical Tool.” Review of Income and Wealth. June 1975: 153-181. http://www.roiw.org/1975/153.pdf
[2] Bureau of Economic Analysis. “GDP: One of the Great Inventions of the 20th Century.” Survey of Current Business. January 2000: 6. https://fraser.stlouisfed.org/scribd/?toc_id=357954&filepath=/files/docs/publications/SCB/2000-09/SCB_012000.pdf&start_page=10
[3] Adolph C. Miller. “War Finance and Inflation.” The Annals of the American Academy of Political and Social Science. January 1918: 118. https://www.jstor.org/stable/1014013
[4] U.S. Congress. Congressional Record 1923: 4632. https://babel.hathitrust.org/cgi/pt?id=njp.32101076476272;view=1up;seq=298
[5] Quoted in United States Federal Trade Commission. National Wealth and Income. May 25, 1926: 18. https://fraser.stlouisfed.org/scribd/?title_id=384&filepath=/files/docs/historical/congressional/19260525_sen_natlwealthinc.pdf
[6] S. Res. 220 called for the Department of Commerce to estimate national income for 1929, 1930, and 1931. In proposing the project, sponsoring Senator Robert La Follette complained that “for a number of years there has been no study of the very important question of national income [and that] the only available data on this question have been furnished by unofficial agencies.” U.S. Congress. Congressional Record 1932: 12285. https://archive.org/stream/congressionalrec75dunit#page/n898/mode/1up
[7] U.S. Bureau of Economic Analysis. “U.S. National Income and Product Statistics.” Survey of Current Business. February 2007: 36. https://fraser.stlouisfed.org/scribd/?toc_id=35967&filepath=/files/docs/publications/SCB/2000-09/scb_200702.pdf&start_page=42
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