The Census Bureau is pursuing an “economic indicator” designation for its Business Formation Statistics (BFS), in what would be a win for the agency’s experimental data products concept.
In an effort to provide more timely, relevant data, the bureau introduced its experimental data products in 2019. These products are created using new data sources and methods to fill gaps in the bureau’s understanding of the evolving U.S. economy.
One such product is the BFS, a series of quarterly business applications, formations and projections measures begun in July as a Center for Economic Studies collaboration with the Board of Governors of the Federal Reserve System, Federal Reserve Bank of Atlanta, University of Maryland, and University of Notre Dame.
Before the BFS was created, there was a two-year lag in the previous measure used to monitor U.S. and state business creation. Now the lag between data collection and release is two weeks.
If the Office of Management and Budget designates them as an economic indicator, the BFS will be the first measures to receive that distinction since the Quarterly Services Survey in 2004.
“Understanding that finding new and innovative ways to provide our data users with the information they need, but doing it without the added expense or burden of traditional surveys, has kind of really motivated a lot of the work,” said Rebecca Hutchinson, big data lead at the Census Bureau, during a Data Coalition webinar earlier this week.
The Business Application Series within the BFS looks at the number of applications under each employer identification number the IRS receives weekly. Business applications exclude those filed without a business intent, while High-Propensity Business Applications are a subset consisting of those applications that have a high likelihood of becoming employer businesses — like those indicating a date they’ll start paying wages.
Two additional series track Business applications with planned wages and from corporations.
A Business Formation Series models the projected number of businesses over a short term.
The three other experimental data products are Dispersion Statistics on Productivity aimed at the manufacturing sector, Post-Secondary Employment Outcomes looking at earnings and employment, and the Supplemental Quarterly E-Commerce Table dividing new measures of e-commerce by business type.
Experimental data products may not meet all of the Census Bureau’s current quality standards, so the ones that don’t are released with their methodology addressing shortcomings in the data. Products that do meet quality standards may achieve regular product status — resources permitting.
The products benefit from data user feedback. User comments are used to assess the demand for the bureau’s data products and improve their usefulness.
Feedback on the BFS has the bureau considering county- and industry-level measures to go along with the state-level one.
“Just giving data users an opportunity and a place to share their feedback — and kind of know that feedback is being taken into account as we further develop these products — has been really important and really helpful,” Hutchinson said.