Wednesday , May 18 2022
Home / FRED Blog
FRED Blog

FRED Blog

The Federal Reserve Bank of St. Louis is the center of the Eighth District of the Federal Reserve System. This District includes Arkansas, eastern Missouri, southern Illinois and Indiana, western Kentucky and Tennessee, and northern Mississippi.

Articles by FRED Blog

Referring to the interest paid on reserves : A rate by any other name…

6 days ago

The Fed’s monetary policy tools are used to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy. These tools evolve over time as the economy evolves, and so it makes sense the terms that describe these tools also change.
The FRED graph above shows three different interest rates the Board of Governors has set on the reserve balances commercial banks keep at their corresponding Federal Reserve Banks. The time frame is between October 9, 2008, and when this post was written:
The interest rate on required reserves (the dashed red line) and the interest rate on excess reserves (the solid orange line) were identical. The former applied to balances kept in fulfillment of reserve requirement ratios, and the latter applied to balances kept in

Read More »

Where CPI inflation isn’t so high : Including a closer look at rents

9 days ago

There’s no doubt that consumer price inflation is relatively high. The consumer price index (CPI), though, is a composite of the prices of many goods and services. Thus, some show even higher inflation, such as energy and transportation, and others show lower inflation. This is what the FRED graph above is all about.
The blue bar shows overall CPI inflation. The other bars display specific categories with lower-than-average inflation. For example, both education and health services, which have had noteworthy price increases in the past, are showing much more restraint now. There are also puzzles, like alcoholic beverages, toys, and communications (for example, computers). Prices that are administratively set, such as water and trash collection, are fairly stable.
And then there’s a

Read More »

Regional differences in mean and median family income : Growing inequality across and within regions

13 days ago

The FRED Blog has examined family incomes in the United States before, specifically the typical (or median) family income and its growing gap relative to the average (or mean) family income. Here, we revisit the topic of regional income inequality by comparing differences in the evolution of median and mean family income.
The FRED graph above uses U.S. Census data to show how different the typical (or median) family income is from the mean (or average) family income. The graph is divided into the four regions defined by the Census: Northeast, Midwest, South, and West.* Each line plots the regional dollar value, measured at 2020 prices, of mean family income divided by median family income.
In all four regions, the value of that ratio is larger than one, indicating that average

Read More »

The new St. Louis Fed Macro Snapshot

16 days ago

People who work with economic data are familiar with the most popular indicators in FRED—the unemployment rate, GDP, interest rates, etc. But FRED contains close to a million data series, each of which can be modified and presented in various ways. Given the sheer size and scope of FRED, it can be difficult to know which other series you should focus on if you want to better understand the current economy. You may ask yourself, “Well, what do economists and policymakers look at—and how do they think about those indicators?”
The St. Louis Fed’s new Macro Snapshot answers these and other questions. The Macro Snapshot is a new portal to the FRED dataverse. It compiles into a single interactive dashboard important economic indicators from FRED—the indicators economists and policymakers

Read More »

Revisions and updates to CPI data : Recalculating seasonal adjustment factors and expenditure weights

20 days ago

The FRED Blog has used ALFRED graphs to discuss the regular revisions to employment data and the periodic updates to real gross domestic product data. Here, once again, we tap into ALFRED to discuss revisions and updates to consumer price index (CPI) data.
The bars in the ALFRED graph above show the annual CPI inflation rates between 2018 and 2021 using two different vintages of CPI data: before (in red) and after (in blue) the January 2022 revision and update to the CPI data. The differences in annual inflation rates are minimal, so what is involved in those revisions and updates?
The revisions are conducted every year and involve adjusting many of the 80,000 individual prices recorded every month for changes in their seasonal patterns. For example, fresh fruit prices are lower

Read More »

The latest on homeownership: race and region

23 days ago

Homeownership is a significant part of the American economy—and, from many perspectives, the American Dream. Given the recent talk about rising house prices, one could ask whether prices are higher because ownership is higher or whether ownership is lower because houses have become less affordable. These topics are always complicated, but maybe a glance at the homeownership rate could help.
The FRED graph above shows the recent evolution of the homeownership rate, but the verdict is…unclear. The rate spiked through the early phase of the pandemic, which actually looks like an acceleration of a previous trend. But then the rate crashed back to pre-pandemic levels and seems to be staying put. These dynamics are much more complex than a simple story of housing demand and affordability

Read More »

Gaslighting gas prices : What’s behind the recent surge of prices at the pump?

27 days ago

The Russian invasion of Ukraine has amplified concerns about the price of gasoline. And for good reason: In March, prices at the pump surged over $4 per gallon for the first time since July 2008. This increase is more than 50% above prices in March 2021, which were about $2.80 per gallon. Gas at $4 per gallon sounds scary, but are real gas prices really that high?
By real prices, we mean prices that take overall inflation into account. To investigate, we compare nominal gas prices (the price you pay at the pump) to real gas prices, which we compute by dividing the nominal price by the consumer price index (CPI) and multiplying by 127.5, the value of the CPI in January 1990. By doing this, we normalize the gas price to the value of the dollar in January 1990, allowing us to compare

Read More »

Comprehensive updates to real GDP : Periodic improvements to economic statistics

April 18, 2022

The FRED Blog sometimes taps into ALFRED, the archive of historical versions (or vintages) of FRED data. Today’s post does just that to discuss how the Bureau of Economic Analysis (BEA) periodically updates its quarterly and annual gross domestic product (GDP) figures to produce more accurate and complete figures of overall economic activity.
The ALFRED graph above shows seven different vintages of real GDP for the second quarter* and third quarter of 1991. The vintage dates included in the series names are the dates when the BEA released a comprehensive update to the data series. While a data revision incorporates newly arrived source data to paint a more complete picture of current or very recent economic conditions, a comprehensive data update reflects changes in economic and

Read More »

How important are fuel excise taxes?

April 14, 2022

As gas prices have soared, various polities have proposed the reduction or temporary elimination of excise taxes on fuel, to provide relief to households. There are various issues attached to this proposal, and we touch on a few in this post.
How much relief would this provide? To answer this question, we propose the FRED graph above, where we express the fuel excise taxes at the state and federal levels and express them as a percentage of disposable income. (That is, the income that household have for expenses after paying taxes.)
The first thing we see is that this percentage has been declining almost constantly, more than halving in about three decades of data. The second thing is that, as of 2020, about a quarter of a percent of disposable income is dedicated to fuel excise

Read More »

Increased spending on internet services : Disruption and innovation in communication

April 11, 2022

The FRED Blog has looked into internet use rates around the world. Today, we bring the topic of internet services back to the United States by visualizing the fraction of personal consumption expenditures on communication services taken up by the internet between 1987 and 2021.
The FRED graph above shows the three categories of personal consumption expenditures on communication services currently reported by the U.S. Bureau of Economic Analysis:
Telecommunication services (in blue): spending on landline and cellular telephone services.
Postal and delivery services (in red): spending on first class U.S. postal service and other delivery services (not from the USPS)
Internet access services (in green): spending on internet services and electronic information providers.
The areas in

Read More »

Declining spending on residential phone service : Cutting the cord by going mobile

April 7, 2022

The FRED Blog has compared mobile cellular subscriptions across countries, highlighting the rapid adoption of that communication technology in some developing economies. Here, we revisit the idea of “going mobile” by comparing it with its counterpart of “cutting the cord” (i.e., landline phone service).
The FRED graph above shows data from the Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics. The purple area represents consumer spending on cellular phone services as a percentage of total consumer spending on telephone services. The green area represents the percentage of spending on residential landline phone service, voice over internet protocol (VOIP), and phone cards.
The available data show a gradual change in spending patterns from landline phone

Read More »

New vehicle sales and auto price inflation since the pandemic

April 4, 2022

The FRED graph above plots two monthly U.S. data series from February 2019 through February 2022: monthly total new vehicle sales and the consumer price index for new vehicles. The numbers on the left vertical axis go from 0 to 180: The vehicle sales series stays in a broad neighborhood of 20 (which reflects 20 million units), whereas the price index stays in a range of 140 to 170. Because of the difference in values, this leaves a lot of white space in the middle of the graph. To better read the data, one can improve the graph by using different vertical axes for the two series.
The FRED graph below shows the same data with different axes for each series: right axis for the sales and left axis for the price index. Notice how much easier it is to understand the price and quantity

Read More »

Is the housing market as wild as it seems?

March 31, 2022

There is a lot of talk about how wild the housing market has been, including houses sold on the day of listing without any inspection and for much more than the asking price. Can we see evidence of this in the data?
This housing fervor should be reflected in the number of days that houses are on the market, which is what our FRED graph shows. We sampled three housing markets generally considered to be hot—San Francisco, Denver, and Austin—but the story is similar elsewhere. While the median days on the market are lower than usual, they’re not dramatically lower and certainly don’t show that most houses are sold unusually quickly. In fact, the typical seasonal pattern seems to persist.
Before trying to understand what’s really going on, we need to understand what the data are

Read More »

Interest rates on secured and unsecured overnight lending : Comparing AMERIBOR and SOFR

March 28, 2022

The FRED Blog has discussed interest rates before, including those used as benchmarks of overnight borrowing costs in financial markets. Today, we revisit the topic of overnight financial transactions by comparing the interest rates of two types of loans: secured and unsecured.
The FRED graph above shows two different interest rates paid by financial institutions for borrowing cash at the end of the business day and paying it back at the start of the next business day:
The blue line shows the overnight unsecured AMERIBOR benchmark interest rate. Reported by the American Financial Exchange, this is a volume-weighted average of interest rates applied to transactions where the borrower does not offer a security as collateral for repayment.
The red line shows the secured overnight

Read More »

A ratio for labor market tightness : There are just 60 unemployed workers for every 100 job openings

March 24, 2022

The unemployment rate is the highest-profile labor market data point, but there are plenty of other ways to gain additional insight into the job market. One such figure is the ratio of unemployed workers to job openings. It’s a straightforward statistic created by combining two key BLS series: unemployment level (via the Current Population Survey) and total nonfarm job openings (via the JOLTS survey).
Exits from the labor force during the COVID-19 pandemic have been analyzed, with research conducted into the reasons for exits and the likelihood of re-entry. It’s led to some debate as to the true tightness of the labor market— after all, total nonfarm payrolls are still 2 million below January 2020 numbers. This ratio sidesteps all that, giving us a measure of labor tightness that

Read More »

The meaning and mechanics of “inflation shocks” : Measuring expected vs. actual inflation

March 21, 2022

With inflation in the news, we look to the FRED graph above to reveal how much realized inflation has differed from expected inflation. The graph shows one measure of realized inflation from the Bureau of Labor Statistics and measures of expected inflation from the Federal Reserve Bank of Cleveland:
The blue line shows the monthly year-over-year change in the consumer price index.
The red line shows one-year-ahead inflation expectations recorded over the course of the year.
The green line shows the one-year-ahead inflation rate that was expected for February 2022 as of February 2021.
The distance between the blue line’s realized inflation as of February 2022 (7.91%) and the green line’s expected inflation for February 2022 (1.67%) represents an “inflation shock.” These shocks are

Read More »

Which U.S. states may feel the trade effects of the Russia-Ukraine war?

March 17, 2022

Although the U.S. is not feeling the direct effects of the Russian invasion of Ukraine, U.S. consumers may already be feeling the negative economic effects of higher gas prices. Are there other effects on U.S. producers that may take longer to manifest? We explore this question with two GeoFRED heat maps of the value of exports by U.S. state: one for exports to Ukraine and the other for exports to Russia.
The map of exports to Ukraine refers to data from 2017, the latest year with available data. Colored dark green, the top exporters to Ukraine were states with export values between $59.98 million and $221.69 million. These states are spread out across the U.S., with California and Washington on the West Coast, Texas in the South, Iowa and Illinois in the Midwest, and New York, New

Read More »

Income inequality across racial groups and the Gini ratio : Income among Black households and families is the least equal

March 14, 2022

The FRED Blog has used the yearly Current Population Survey conducted by the U.S. Census Bureau to illustrate measures of inequality and highlight the difference between households and families. (A household includes all people living in a housing unit; a family includes only those related by marriage, blood, or adoption.) This post compares inequality for both household and family incomes across racial and ethnic groups.
The FRED graph above describes household inequality with something called the Gini ratio. This Gini ratio is a statistical measure of how unequal incomes are within a group. A value of 1 indicates absolute inequality, where one household earns all the income and the rest of them earn nothing. A value of 0 indicates absolute equality, where all households earn the

Read More »

The declining labor force : New job seekers aren’t offsetting the retiring Boomers

March 10, 2022

When we talk about the labor market we often focus on the unemployment rate. But an equally important measure of labor market conditions is the labor force participation rate (LFPR).
The LFPR is equal to the employed plus the unemployed, divided by a measure of U.S. population. Think of it as those who want to work (i.e., have a job or want one) relative to those who could work (the entire population over age 16 that isn’t incarcerated or on active military duty).
The above FRED graph plots the monthly U.S. LFPR starting in 1948. One striking feature is its hump shape, which is related to demographic factors. LFPR fluctuates around 59% until the late 1960s, when it starts rising. This rise is attributed to the Baby Boomer generation joining the labor force, as well as to the

Read More »

Comparing Russia and the European Union: GDP and population

March 7, 2022

The Russian Federation is the largest country on earth by area, but it is smaller than the European Union both economically and demographically. Since 2013, the EU has included 27 member countries. In 1989, typically seen as the end of the Cold War, it included 11 member countries. But neither the discussion below nor the data above depend critically on the date you choose to start comparing Russia and the EU.
GDP
The blue line shows the ratio (expressed in percentages) of Russia’s GDP to the EU’s GDP. From 1989 through 2020, Russian GDP never exceeded 15% of the EU’s. The peak occurred in 2012. Since 2013, Russian GDP has grown more slowly than the EU’s—hence, its decreasing relative size.
To gauge the importance of this difference, consider the following thought experiment:

Read More »

The pandemic’s effects on nonstore and e-commerce retail sales : A temporary boost did not change the trend

March 3, 2022

The FRED Blog has discussed how the COVID-19 pandemic changed the sale volumes of different products, from groceries and alcohol to men’s clothing, sporting goods, pharmacies and drug stores. The social distancing required to manage the pandemic also impacted how people shopped, boosting online sales. Today, we compare nonstore and e-commerce retail sales to total sales to see if the boost to online sales was permanent or temporary.
The FRED graph above shows data from the U.S. Census about where consumers do their shopping. The blue line compares monthly nonstore retail sales (i.e., home delivery, TV or print catalog sales, and electronic shopping) with all other non-food, non-motor-vehicle retail sales. The red line compares quarterly retail sales over the internet with total

Read More »

Cross-country dynamics during COVID-19 : Output, demand, and inflation in Canada, Germany, and the U.S.

February 28, 2022

The economic effects of COVID-19 and the subsequent recovery have been markedly different across countries. So it’s a good thing FRED has international data. Here, we compare the recent dynamics of output, demand, and inflation for three developed economies: Canada, Germany, and the United States.
Output: GDP
Economic activity contracted sharply in all three countries with the onset of COVID-19 in early 2020. The contraction was mildest in the U.S. and most severe in Canada. But the economic differences across these countries become wider throughout the recovery. The U.S. recovered the fastest, with real GDP in 2021:Q4 about 5% higher than in 2020:Q1. The recoveries in Canada and Germany have been slower: Real GDP in 2021:Q4 increased about 2.5% and 0%, respectively, relative to

Read More »

Rental costs in redlined neighborhoods : Relatively higher rents in areas with lower home values

February 24, 2022

The FRED Blog has used data compiled by Daniel Aaronson, Daniel Hartley, and Bhashkar Mazumder to show the lasting effects on U.S. home values of the color-coded maps created by the Home Owners’ Loan Corporation in the 1930s. Today, we examine the data on rent and rental costs included in that data set.
The FRED graph above shows the same type of rental cost layering we described for home values: Between 1930 and 2000, redlined neighborhoods (areas with a “D” letter code) consistently recorded the lowest rent prices. That is to be expected, as properties in the area were old or nearby unattractive or unhealthy industrial areas. However, relative to the typical home values in those redlined areas, rental costs were consistently high during much of this period.

The second FRED graph

Read More »

A short history of public borrowing for wars

February 17, 2022

The FRED graph above shows public lending (positive values) and public borrowing (negative values) for the United Kingdom since the year 1700. The timeline includes large downward swings that are dominated by wars:
War of the Spanish Succession and Queen Anne’s War (1701-1714)
War of the Austrian Succession (1740-1748)
Seven Years’ War (1756-1763)
American Revolutionary War and associated wars (1775-1783)
Seven coalition wars, including the French Revolution and Napoleonic wars (1792-1815)
World War I (1914-1918)
World War II (1939-1945)
Of course, the United Kingdom fought many more wars, mostly in its colonies. But those seem to have been part of the normal course of operations, whereas the wars highlighted above have had a serious impact on government finances. Since World War

Read More »

The far-reaching effects of your Valentine’s Day chocolate

February 14, 2022

This post falls on February 14, Valentine’s Day, and our thoughts turn sweet. Specifically, to chocolate.
Chocolate is ubiquitous and delicious and sometimes frivolous, especially while strolling through the “impulse purchase” lanes of the supermarket. But chocolate can be of major importance to those who produce it, in particular to those who produce its raw material, cocoa.
The largest exporter of cocoa is Côte d’Ivoire (Ivory Coast) in West Africa. Cocoa beans and cocoa derivatives represent close to 40% of the exports for this country of 26 million residents. Cocoa matters a lot to Côte d’Ivoire.
The FRED graph above shows a couple of things:
The price of cocoa is quite volatile, which happens with primary commodities. But price volatility can have big effects on economies that

Read More »

Building home price indexes : Federal, S&P/Case-Shiller, and Zillow housing measures

February 10, 2022

“Every spirit builds itself a house; and beyond its house, a world”
—Nature, Ralph Waldo Emerson (1803-1882)
Today, the FRED Blog considers a more down-to-earth version of Emerson’s lofty concept: How is a home price index built? The FRED graph above starts us off by showing three headline indicators of U.S. home prices:
The all-transactions house price index for the United States (in green), produced by the U.S. Federal Housing Finance Agency, measures quarterly changes in single-family home values. It uses sample data from repeated sales of the same property. It is not adjusted for seasonal changes in home values. First released in 1996, this index extends back to the first quarter of 1975.
The S&P/Case-Shiller U.S. national home price index (in red), produced by Standard and

Read More »

Logs of softwood lumber : Using the natural logarithm to clarify volatile prices

February 7, 2022

Some commodities have seen some wild price fluctuations during the COVID-19 pandemic. One that was much discussed in the news is softwood lumber. While FRED does not have data on its retail price, it does have the price that the producer gets: the Producer Price Index, formerly called the Wholesale Price Index.
Our first FRED graph shows how unusual these price fluctuations have been. While the price stayed within a narrow band for years, it has suddenly spiked and plummeted in unprecedented ways since the middle of 2020. When data points rise or fall by multiples of their preceding values, it’s useful to transform the data to ensure an accurate understanding. In this case, taking logs of lumber prices provides us with that clarity—and a nice pun!
Our second FRED graphs shows

Read More »

Has consumption spending on services recovered? : More shoes, more shirts, and gradually more services

February 3, 2022

After COVID-19 induced a recession, the FRED Blog discussed the consequent drop in spending on services caused by mandated social distancing. This decreased demand for services (i.e., work done on one’s behalf) was partially offset by an increased demand for goods. Today, we revisit the topic to gauge the recovery in consumption spending on services.
The FRED graph above shows data from the Personal Income and Outlay Survey from the U.S. Bureau of Economic Analysis in inflation-adjusted U.S. dollars. The values are presented as a custom index equal to 100 in February 2020, the start of the COVID-19-induced recession. This data transformation allows us to easily observe the evolution of the three main components of personal consumption: services (in red), durable goods (in purple),

Read More »

Is there more or less health care than before the pandemic?

January 31, 2022

The pandemic brought about serious upheaval in the health care sector. Services directly connected to the COVID-19 virus were overwhelmed at times, while non-essential services came close to a standstill. Our question for today is, in sum, how has the health care sector fared?
The FRED graph above shows personal consumption expenditures on health care. This measure probably isn’t a good indicator to answer our question, as it doesn’t include any of the expenses paid by other entities, such as businesses and various levels of government. So we need a measure that encompasses all of the health care sector.

The second FRED graph gets closer to what we want, although with data that are not as current as the data in the first graph.
We see that total revenue of health care

Read More »

The seasonality of Chinese imports : Does Santa Claus shop in China?

January 27, 2022

The FRED Blog has discussed the seasonality of food prices, labor markets, interest rates, and e-commerce. So, perhaps it’s no surprise to learn that there are also seasonal ups and downs for some import flows.
The FRED graph above shows two data series produced collaboratively by the Census Bureau and the Bureau of Economic Analysis: the monthly U.S. dollar value of goods imported from China (in green) and from Canada (in red). This price does not include import duties, freight, insurance, and other charges related to bringing the merchandise into the U.S.
The repeating up-and-down monthly pattern of U.S. imports from China contrasts with the comparatively steadier pattern of U.S. imports from Canada: Many Chinese goods arrive at U.S. ports and shipping centers in October, while

Read More »