The Department of Commerce is a cabinet-level agency of the U.S. federal government that supports business growth. It has 46,608 employees located in all U.S. states and territories and in 86 countries. It had a $15.2 billion budget in FY 2020. President Donald Trump requested $7.9 billion for the Fiscal Year 2021 budget. That's a $7.3 billion or a 48% decrease from the 2020 enacted level.
Commerce is the agency that manages the National Weather Service, National Oceanic and Atmospheric Administration, and the Foreign Commercial Service. It also oversees ocean and coastal navigation and negotiates bilateral trade agreements. It also conducts the Decennial Census.
What It Does
The Commerce Department's mission is to "create the conditions for U.S. economic growth and opportunity." It negotiates trade agreements, provides economic research, and sets business standards.
As a result, its responsibilities are as diverse as its 12 agencies:
- Bureau of Economic Analysis provides important economic research.
- Bureau of Industry and Security controls trade that affects national security, including nuclear non-proliferation, chemical/biological weapons, and trade sanctions.
- Census Bureau counts the population every 10 years.
- Economic Development Administration provides grants to support strategically important economic activity.
- Office of the Under Secretary for Economic Affairs provides policy direction to both the Bureau of Economic Analysis and the U.S. Census Bureau.
- International Trade Administration promotes international trade.
- Minority Business Development Agency secures contracts and partnerships for minority-owned firms.
- National Institute of Standards and Technology regulates standard measurements and manages the Internet Time Service.
- National Oceanic and Atmospheric Administration does research to protect the oceans. It also operates the National Weather Service.
- National Technical Information Services uses government-sponsored research to help businesses.
- National Telecommunications and Information Administration expands broadband capabilities to rural communities.
- Patent and Trademark Office protects intellectual property.
How It Affects the U.S. Economy
The Commerce Department helps to set both domestic and international trade policy. For example, it renegotiated the North American Free Trade Agreement. It did this under Trump's threat to dump NAFTA if Canada and Mexico didn't agree.
The ITA is responsible for successfully administering trade agreements with countries with desirable natural resources. These trade agreements can lower the cost of imports. It also improves the trade deficit and current account deficit. It enforces existing policy on trade, intellectual property, and technology standards. This reassurance increases the competitive ranking of the United States by attracting high technology companies.
Commerce provides the research which is critical to maintaining a stable economy. It measures the nation's output as measured by gross domestic product. For example, if last quarter’s GDP is revised downward, Wall Street investors may turn bearish because they anticipate a further decline in growth.
The International Trade Administration (ITA) helps companies learn how to export. It also has about 170 offices globally to promote U.S. trade in foreign markets. ITA enforces free trade agreements and takes action on violations of international trade law, strengthens U.S. industry competitiveness by analyzing trade data to use in developing trade policy, and enforces anti-dumping violations.
How It Affects You
The National Weather Service can literally save your life. It issues warnings and alerts for natural disasters and extreme weather. These include:
- Drought monitors and outlooks.
- Flood advisories, watches, and warnings, as well as flood safety tips.
- Heat wave advisories, watches, and warnings. It also predicts when heat will be higher than average for an area.
- Hurricane advisories, watches, and warnings through the National Hurricane Center. It also provides outlooks for each season.
- Tornado and severe thunderstorm watches.
- Wildfire probabilities and outlooks, in conjunction with other agencies.
The NOAA monitors global warming and how it affects the oceans. It measures rising sea levels and ocean pollution. It also monitors the impact of oceanic catastrophes like the BP Oil Spill. That affects your quality of life.
The BEA reports immediately affect Wall Street traders. So these affect you as well. It's in your best interest to be aware of these reports so that you can change your financial strategy when needed. Here are the most current BEA indicators.
- Current GDP Statistics
- Current Retail Sales
- International Trade
- Current Consumer Spending
The Census Bureau conducts the annual American Community Survey. It provides updated statistics on U.S. demographics. Some data is exclusive to the survey, such as education, mobility, and health insurance. Here are its most current indicators:
- Income per Capita
- Average Net Worth
- Average Household and Family Income
- Federal Poverty Threshold
- Middle-Class Income
The Commerce Department provides research on international trade:
- TradeStatsExpress provides general information about U.S. exports and imports to various countries.
- Export Solutions provides market research about any foreign market.
- BuyUSA.gov helps your business export to various countries. It also provides trade missions you can join.
The ITA negotiates free trade agreements. These agreements lower the cost of the things you buy.
The Bottom Line
The U.S. Department of Commerce oversees the nation’s businesses to balance economic growth, create job opportunities, and improve America’s standard of living. As an umbrella agency, it manages several bureaus. They supervise domestic and international trade, support economic activities, and gather and analyze data relevant to the economy. It also pursues technology and patent protection to help American businesses maintain their edge over global competitors. Commerce bureaus also watch the climate and monitor consumer income, consumption, and employment levels. All of these factors directly affect the U.S. economy.
Be aware of the Commerce Department’s goals and actions. Your standard of living and financial well-being are highly dependent on them.