Economic and Public Policy FAQs
The following are some Frequently Asked Questions and responses, as well as helpful links provided by the Economics and Public Policy team at the Kem C. Gardner Policy Institute.
The final value of all goods and services produced in a region. The value of goods and services produced for the use of households, business investment, governments, and for export, less the cost of the goods and services used as inputs to production.
Nonfarm payroll employment consists of total full and part-time jobs, counted equally, covered by the Unemployment Insurance Program. It is a count of jobs, not people: for example, one person who holds two jobs would be counted twice. It does not include military personnel. This is the type of employment reported by the Utah Department of Workforce Services and the U.S. Bureau of Labor Statistics. The U.S. Bureau of Economic Analysis’ employment estimates also count full- and part-time payroll jobs, but add agricultural jobs, the military, and the self-employed (proprietors) as well.
Persons 16 years and older who do not have a job but are available for work and actively looking for employment.
Individuals aged 16 years and older who are employed or unemployed. It does not include those who are retired, incarcerated, students, and others who are not working and not looking for work.
The proportion of the labor force that is unemployed but actively looking for work is referred to as “headline unemployment.” The U.S. Bureau of Labor Statistics also tracks individuals who are underemployed (working part-time but would like to work full-time) and marginally attached to the labor force (unemployed, previously employed or looking for work within the past 12 months but no longer looking for work and therefore not counted in the headline rate). The sum of headline unemployment and these other measures is called the U-6 Unemployment Rate because it includes six categories of underutilization (the headline and marginally attached rates each have several categories).
The share of the population 16 and older that is in the labor force, i.e. either employed or unemployed and looking for work. The labor force participation rate has declined over the last decade in part due to the growing share of the population that is of retirement age.
Income received by all persons from all sources. It consists of:
Earnings: Wages and salaries, employer pension and insurance contributions, and earnings from self-employment;
Dividends, interest, and rent: Personal investment income, including rental income; and
Transfer receipts: Personal receipts from government and business for which no services are performed, including Social Security benefits, veterans’ benefits, unemployment insurance, and pensions.
Household income is the combined personal income of all members of a household.
The North American Industry Classification System (NAICS) is the standard used to classify economic activity by grouping business establishments into industries according to similarities in the production process. NAICS employs a 6-digit identifier; the first two digits represent sectors, the third digit represents the subsector, the fourth the industry group and the fifth and sixth, the industry. There are 20 sectors, consisting of:
11 Agriculture, Forestry, Fishing and Hunting
21 Mining, Quarrying, and Oil and Gas Extraction
42 Wholesale Trade
44–45 Retail Trade
48–49 Transportation and Warehousing
52 Finance and Insurance
53 Real Estate and Rental and Leasing
54 Professional, Scientific, and Technical Services
55 Management of Companies and Enterprises
56 Administrative and Support and Waste Management and Remediation Services
61 Educational Services
62 Health Care and Social Assistance
71 Arts, Entertainment, and Recreation
72 Accommodation and Food Services
81 Other Services (except Public Administration)
92 Public Administration
The cycle of growth and decline in economic activity around a long-term trend. The business cycle has five phases. They are:
- Phase one – Peak or the high point of economic activity;
- Phase two – Recession or when the economy contracts.
- Phase three – Trough or turning point from a contracting economy to an expanding one;
- Phase four – Recovery, or when the economy begins to expand again;
- Phase five – New peak or when economic growth surpasses the previous peak until another peak is achieved.
Particularly steep expansions are called booms and particularly abrupt contractions are called busts.
The use of the word cycle is a bit of a misnomer in that the business cycle does not exhibit a regular pattern in terms of magnitude of contraction and expansion and length of time. The National Bureau of Economic Research Business Cycle Dating Committee provides the official identification of United States business cycles by analyzing a variety of economic indicators, including GDP, employment, and personal income. A general rule of thumb that many economists use to identify recessions is two consecutive quarters of declining GDP.