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GAO report: Unreliable economic, limited labor data make P.R.’s situation difficult to assess

The U.S. General Accountability Office issued a report recommending that several U.S. agencies work to include Puerto Rico in more federal economic and labor data reporting, to make it easier to assess the commonwealth’s true problems.

In its report, the GAO made specific recommendations — that the U.S. Department of Commerce ensure that its Bureau of Economic Analysis (BEA) includes Puerto Rico in its reporting on Gross Domestic Product, as it does for other U.S. territories.

Furthermore, the GAO suggested that the Department of Commerce, in cooperation with the U.S. Department of Labor’s Bureau of Labor Statistics, should conduct a study on the feasibility of including Puerto Rico in its reporting of the Current Population Survey.

While the U.S. Department of Commerce agreed with the recommendations, the Department of Labor did not have any comments on the report, the GAO stated.

Among the findings included in the report, the GAO confirmed that in its assessment of the commonwealth, it found that the Puerto Rico Planning Board uses outdated methods to calculate GDP, “which results in unreliable data from year to year and can make it difficult for policymakers to fully analyze specific economic needs and develop long-range plans.”

In its report, the GAO questioned the reliability of Planning Board data showing that from 2005 to 2016 Puerto Rico’s GDP decreased by more than 9 percent, after adjusting for inflation.

For six years, the BEA has “provided technical support to the Planning Board to update its methods and Planning Board officials described plans to do so, but its methods remain outdated.”

“A 2016 Congressional Task Force recommended that BEA calculate Puerto Rico’s GDP, and BEA considers it a long-term goal; however, BEA has not taken steps to do so,” the GAO stated.

However, As of August 2018, the BEA received initial funding for the remainder of Fiscal 2018 and Fiscal 2019 to begin producing economic statistics for Puerto Rico, the Department of Commerce stated in its comments to the GAO’s report.

“BEA is currently meeting with the government and other stakeholders and building a work plan, with a kick-off expected in early Fiscal 2019 and initial outputs anticipated in late Fiscal 2019,” the Department of Commerce noted.

“In addition, BEA reported taking steps to develop a work plan to calculate GDP and review the economic and demographic data currently available from the federal government and Puerto Rico,” the agency stated.

“Any short-term efforts to calculate GDP will rely heavily on data currently collected by the Puerto Rico government. Additional efforts beyond Fiscal 2019 are contingent on resource availability,” it added.

Meanwhile, the U.S. Department of Commerce stated that including Puerto Rico in the Current Population Survey would cost some $1.5 million over an 18-month period.

“Commerce understands that BLS, which funds the majority of the CPS, does not have the funds within its budget to conduct a feasibility study,” the agency noted in its comments.

“Given these resources constraints, Census and BLS would also not be able to absorb the costs of collecting, analyzing and producing the data in the out years,” it added.

Comment here