Distributive Services in the U.S. Economic Accounts

Distributive services industries such as wholesale trade and retail trade have contributed significantly to productivity growth in the U.S. nonfarm business sector during the past decade. Bosworth and Triplett found that retail trade alone contributed nearly one-half to the acceleration of multifactor productivity growth in the late 1990’s. At the same time, they expressed concern that productivity growth for these industries may be overstated because of the way real output is measured, especially for retail stores that sell computers and electronic devices whose quality continues to improve while prices fall. Different output concepts, data sources, and methodologies have led researchers to reach different conclusions about the sources of productivity growth and its attribution among industries. Questions have also been raised about whether the current treatment of trade industries could lead to an overstatement of overall economic growth.