GOVERNMENT scraps old method of classifying economy
Tuesday, May 22nd 2001, 12:00 am
By: News On 6
WASHINGTON (AP) _ After 60 years of faithful service, the government is saying goodbye to the Standard Industrial Classification system in favor of a more modern way of keeping tabs on the $10 trillion U.S. economy.
Government number crunchers at the Commerce Department said Monday that the old system, which identifies types of businesses tracked in various economic reports, had become outdated. The last time it was revised was 1987.
While the old system emphasizes manufacturing companies, the new system, called the North American Industry Classification System, is broader and includes more companies involved in the services and high-tech industries.
The new system classifies 1,170 industries, versus, 1,004 tracked under the old system.
Over time, the new system will be used for many of the government's economic reports. But for now, the change will affect just some of them. They include monthly figures on: retail sales, factory orders, and orders for costly manufactured items, known as durable goods. The durable goods report comes out Friday and will use the new classification system. All three reports come out of the Commerce Department.
For durable goods, the new system looks much the same. However, computers, communications equipment and semiconductors are broken out. Previously, those businesses were lumped into larger categories.
Similarly, in the retail sales report, electronics and appliance stores will be broken out, rather than being embedded in a broader classification.
Bars and restaurants will continue to be included in the monthly retail sales report, but in a new category of ``food services.''