Economists measure labor market tightness as the number of job vacancies per unemployed worker, which is a key factor in monetary policymakers’ decisions.

In the FRED graph above, the blue line shows the seasonally adjusted number of job openings as a fraction of the number of workers in the labor force since January 2020, just before the pandemic. The red line shows the seasonally adjusted unemployment rate. The shaded area shows the onset of the pandemic-related recession, when job postings declined and the unemployment rate jumped to a historically high 15%. But soon after, the unemployment rate declined sharply and job openings became more abundant.

The second graph, below, shows labor market tightness as the ratio of job openings to unemployment. This captures how many job opportunities there are for each person seeking a job. Labor market tightness reached around 2 in early 2022, meaning a very tight labor market with two job openings for each unemployed worker. During this period, many firms faced high demand; as a result, they attempted to hire many workers. Since then, the labor market has cooled significantly, with recent labor market tightness approaching one job for each person seeking a job. This coincides with a general cooldown in demand.

The current labor market is slightly less tight than it was right before the pandemic, though it still remains very tight by historical standards.

How these graphs were created: For the first graph, search FRED for and select “Job Openings: Total Nonfarm (JTSJOR).” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Unemployment Rate (UNRATE).” Finally, adjust the time series to be from 2020-01-01 to 2024-08-01.
For the second graph, search FRED for and select “Job Openings: Total Nonfarm (JTSJOR).” From the “Edit Graph” panel, go to the “Customize data” field and search for “Unemployment Rate (UNRATE)” and click “Add.” Then, in the “Formula” field type a/b and select “Apply” to obtain the ratio of job openings to the unemployment rate. Finally, adjust the time series to be from 2020-01-01 to 2024-07-01.

Suggested by Mick Dueholm and Serdar Ozkan.

Businesses reap profits when their total revenue exceeds total expenses. In other words, there’s a profit if the sale price of a good or a service is higher than the sum of its direct production cost (e.g., labor, materials) and the overhead costs of operating the business (e.g., administration). The term “markup” stands for the difference between production cost and sale price.

The FRED graph above shows data from the US Bureau of Economic Analysis on the percent share of national income represented by corporate profits, before taxes, between 1947 and 2024. In broad terms, that share declined between 1947 and 1986, reaching an all-time low of 6.8%. It bounced back afterward, and at the time of this writing it stands at 16.7%.

The rise in business profits, with its associated rise in markups, is the focus of recent research by Ricardo Marto at the St. Louis Fed. He finds that the overall rise in markups has been driven by larger service markups, which have grown faster than markups on manufactured goods. His analysis goes on to consider the role of consumer preferences for services, concluding that higher incomes and an increased willingness to pay for services are the driving forces behind the rise in markups.

For more about this and other research, visit the publications page of the St. Louis Fed’s website, which offers an array of economic analysis and expertise provided by our staff.

How this graph wase created: Search FRED for “National income: Corporate profits before tax (without IVA and CCAdj).” Next, click the “Edit Graph” button and use the “Line 1” tab to customize the data by searching for and adding “National income: Corporate profits before tax (without IVA and CCAdj).” Last, type the formula (a/b)*100 and click on “Apply.”

Suggested by Diego Mendez-Carbajo.

Net international investment position (NIIP) captures the difference between two large numbers: the value of US-owned assets abroad (foreign assets) and the value of foreign-owned assets in the US (foreign liabilities). The NIPP determines whether a country is a net creditor (positive position) or a net debtor (negative position) and is an important indicator of a country’s financial condition.

The FRED graph above shows that the US NIIP as a percentage of US gross domestic product has been negative and declined sharply since the 2008 financial crisis. From 2007 to 2021, the NIIP fell dramatically, by approximately 67 percentage points of GDP, from –9% to –76% of GDP. There was a brief increase in 2022, when the NIIP rose to –62% of GDP. But this recovery was short-lived. By the end of the first quarter of 2024, the US NIIP had fallen again, back to –75% of GDP. This overall trend represents a significant and persistent weakening of the United States’ financial position relative to the rest of the world over nearly two decades.

What’s driving this decreasing trend in the US NIIP? Examining the evolution of the two major components of the NIIP separately—foreign assets and foreign liabilities—will allow us to determine whether the decreasing NIIP is primarily due to changes in US foreign assets, foreign liabilities, or a combination of both.

The second FRED graph, above, breaks down US assets (green line) and liabilities (red line) as percentages of US GDP. Assets and liabilities generally move in tandem, but the percentage of US-owned assets abroad is consistently lower than foreign-owned US assets.

At the start of the financial crisis, this gap in investment began to widen and assets fell by a larger percentage than liabilities: 30 versus 10 percentage points, respectively. Then in 2012, assets and liabilities moved apart and the gap widened. From 2012 to 2020, assets steadily fell within 120% to 140% of GDP while liabilities hovered between 160% and 180% of GDP. At the onset of the pandemic, around the second quarter of 2020, both assets and liabilities jumped, but liabilities increased by a slightly larger percentage.

Data show that the growing gap between US-owned assets abroad and foreign-owned US assets explains the increasing decline in the US net international investment position.

But this gap is driven by more than just new investments and divestments. A crucial factor is the impact of valuation changes on existing asset holdings. These valuation effects can arise from fluctuations in asset prices, such as stock market movements, or changes in exchange rates. Such changes can significantly alter the value of cross-border holdings without any actual transactions taking place. A more comprehensive understanding of this NIIP deterioration needs a detailed study of both the composition and valuation dynamics of these international assets and liabilities.

How these graphs were created: Search FRED for “International Investment Position” and select “U.S. Net International Investment Position.” Click the “Edit Graph” panel in the upper right corner to open the “Edit Line” box. Scroll down to “Customize data.” In the text box, search for “gdp” and select “Gross Domestic Product.” Click “Add” next to the text box. Below this section, in the “Formula” space, enter (a/1000)/b and click “Apply.” Repeat this process for the second graph with “U.S. Liabilities.” Next click the gray “ADD LINE” box at the top. In that search box, search for “U.S. Assets.” Scroll down to “Customize data”: Search for “gdp” and select “Gross Domestic Product.” Click “Add” next to the text box. Below this section, in the “Formula” space, enter (a/1000)/b and click “Apply.”

Suggested by Ana Maria Santacreu and Ashley Stewart.