FR1374_20170224_omb

Supporting Statement for the
Intermittent Survey of Businesses
(FR 1374; OMB No. 7100-0302)
Summary
The Board of Governors of the Federal Reserve System (Board), under delegated
authority from the Office of Management and Budget (OMB), proposes to extend for three years,
without revision, the voluntary Intermittent Survey of Businesses (FR 1374; OMB No. 71000302). The survey data are used by the Federal Reserve to gather information specifically
tailored to the Federal Reserve’s policy and operational responsibilities. There are two parts to
this event-generated survey. First, under the guidance of Board staff, the Federal Reserve Banks
survey business contacts as economic developments warrant. Currently, there are approximately
2,400 business respondents for each survey (about 200 per Reserve Bank); occasionally state and
local government officials are called, in which case there are far fewer respondents. It is
necessary to conduct these surveys to provide timely information to the members of the Board,
and to the presidents of the Reserve Banks. Usually, these surveys are conducted by Reserve
Bank economists telephoning or e-mailing purchasing managers, economists, or other
knowledgeable individuals at selected, relevant businesses. Reserve Bank staff may also use
online survey tools to collect responses to the survey. The frequency and content of the
questions, as well as the entities contacted, vary depending on developments in the economy.
The attachment provides a sample of the types of questions used in a previous survey to illustrate
the format of these surveys. Second, economists at the Board survey business contacts by
telephone, inquiring about current business conditions. Board economists conduct these surveys
as economic conditions require, with approximately ten respondents for each survey. The total
annual burden for the FR 1374 is estimated to be 1,825 hours.
Background and Justification
Prior to the 2002 implementation of this survey, the Federal Reserve found it helpful to
collect information on an ad-hoc basis from individuals within the business community on a realtime basis. This information typically reflected current business conditions and ongoing
developments in the economy as well as topical issues. Prior to 2002, the Federal Reserve
limited its contacts to fewer than nine firms and asked open-ended questions. However, the
Federal Reserve believes that it is extremely valuable to talk with firms and ask targeted
questions that are critical to understanding the current economic situation and outlook. This is
especially true for the surveys conducted by Reserve Banks, many of which have been initiated
at the request of Reserve Bank presidents. An in-depth understanding of overall economic
conditions and the types of special issues shown in the attachment can only be gleaned in real
time through direct discussions with contacts at relevant entities. The information gathered in
surveys conducted by Board economists are disseminated to the Board members. For surveys
conducted by Reserve Bank economists, information also goes to the presidents of the Reserve
Banks. The information is also used by the Federal Reserve as input to its economic forecasting
activities.

In 2010, the respondent panel was revised to include state and local governments as
warranted by economic conditions. (At that time, understanding how these governments were
allocating funds from the American Recovery and Reinvestment Act of 2009 was of particular
interest.) Because spending by state and local governments currently accounts for about
11 percent of total Gross Domestic Product (GDP), understanding developments in this sector
can help the Board better understand the likely path for overall economic activity.
In 2013, the Federal Reserve increased the permitted number of respondents from 240 to
2,400 for the Reserve Bank surveys. This increase allowed (but did not require) Reserve Banks
to survey an average of 200 respondents per District instead of 20, which provided better
representation and more complete coverage of economic developments within each District
(especially with respect to issues of broad applicability). The Board part of the survey remained
unchanged.
Description of Information Collection
The topics discussed with the respondents are time sensitive, and the questions vary with
the topic. There is no reporting form because the questions typically change with each survey.
For each survey, the Federal Reserve prepares in advance questions of specific topical interest,
often at the request of Reserve Bank presidents. The Federal Reserve then determines a relevant
target group of firms to contact. If conducted by telephone, the discussions could last up to
twenty minutes, with the typical conversation lasting approximately fifteen minutes. If
conducted using an online survey tool, the response times are likely to be significantly shorter.
The Federal Reserve tabulates the results of the Reserve Bank surveys and prepares a brief
summary of the results. The tabulation and the summary, along with the submission from the
individual Reserve Banks, are then circulated to the members of the Board and Reserve Bank
presidents. For the Board surveys, a memo is prepared for the Board members summarizing the
survey results.
Time Schedule for Information Collection
The surveys are conducted intermittently.
Legal Status
The Board’s Legal Division has determined that section 2A of the Federal Reserve Act
(FRA) requires that the Board and the Federal Open Market Committee maintain long run
growth of the monetary and credit aggregates commensurate with the economy’s long run
potential to increase production, so as to promote effectively the goals of maximum employment,
stable prices, and moderate long-term interest rates (12 U.S.C. § 225a). Under section 12A of
the FRA, the Federal Open Market Committee is required to implement regulations relating to
the open market operations conducted by the Federal Reserve Banks with a view to
accommodating commerce and business and with regard to their bearing upon the general credit
situation of the country (12 U.S.C. § 263). The FR 1374 is a voluntary survey.
Because questions may vary from survey to survey, it is difficult to determine whether

2

the information collected under the FR 1374 will be considered confidential. However, the
information collected on the FR 1374 would be of a commercial nature in that is pertains to
commerce. Additionally, disclosure would impair the Board’s ability to obtain this necessary
information in the future. Some information collected may therefore fall within the reach of
exemption (b)(4) of the Freedom of Information Act (5 U.S.C. §552(b)(4)), which protects from
disclosure “trade secrets and commercial or financial information obtained from a person and
privileged or confidential.” As such, information that meets the preceding standards may be
granted confidential treatment. However, if the information does not meet these standards (for
example, if the information is already public), it would not be granted confidential treatment.
Consultation Outside the Agency
On October 3, 2016, the Board published an initial notice in the Federal Register (81 FR
68018) requesting public comment for 60 days on the extension, without revision, of the
FR 1374. The comment period for this notice expired on December 2, 2016. The Board did not
receive any comments. On January 17, 2017, the Board published a final notice in the Federal
Register (82 FR 4883).
Estimate of Respondent Burden
For surveys conducted by the Reserve Banks, the permitted number of respondents is
2,400 (an average of 200 at each Reserve Bank) for each survey. It is anticipated that these
surveys will be conducted approximately three times per year. A particular survey would likely
be conducted of either businesses or state and local governments, but not both. In the case of
state and local governments, the respondent count will be considerably lower. For surveys
conducted by Board economists, the number of respondents is 10 and the frequency is eventgenerated, with approximately 10 surveys per year. The average response time for both parts of
the survey is estimated to be 15 minutes. As shown below, the respondent burden for the
FR 1374 is estimated to be 1,825 hours annually. These reporting requirements represent less
than 1 percent of total Federal Reserve System paperwork burden.
Number of
respondents1

FR 1374

Reserve Bank
Board

2,400
10

Estimated
Estimated
Annual
average hours annual burden
frequency
per response
hours
3
10

Total

1

0.25
0.25

1,800
25
1,825

Of these respondents, none are considered small entities as defined by the Small Business Administration (i.e.,
entities with less than $550 million in total assets) www.sba.gov/contracting/getting-started-contractor/make-sureyou-meet-sba-size-standards/table-small-business-size-standards.

3

The total cost to the public is estimated to be $140,525.2
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
Contacting the respondents, compiling the information, and writing the summary memos
for the Board surveys involve about 25 hours of staff time per year, at an estimated cost to the
Board of $2,500. Regarding the Reserve Bank surveys, the cost to the Federal Reserve System
for collecting and processing the surveys is estimated to be $88,100.

2

Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (50% Financial Managers at $65 and 50% Chief Executives at $89).
Hourly rates for each occupational group are the (rounded) mean hourly wages from the Bureau of Labor and
Statistics (BLS), Occupational Employment and Wages May 2015, published March 30, 2016
www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined using the BLS Occupational Classification
System, www.bls.gov/soc/.

4

Attachment
Examples of Survey Questions
1. Do you expect your firm’s spending on new plant and equipment over the next six to twelve
months to increase, decrease, or be about unchanged relative to your actual spending over the
past six to twelve months?
2. If your firm plans to increase its spending on new plant and equipment, what are the major
factors behind your plan to increase capital spending?
3. How much of the increase in your firm’s planned spending on plant and equipment over the
next six to twelve months reflects investment that had been postponed because of the recession?
4. If your firm does not plan to increase its spending on new plant and equipment, what are the
major factors behind your plan not to increase capital spending?

5