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How much commuting time are we saving by working from home?

A back-of-the-envelope calculation of pandemic-related changes

The FRED Blog has looked at the wide range of commuting times across U.S. cities and counties, as well as the impact of shorter commutes on employment and happiness.

Given that many employees have been working from home during the COVID-19 pandemic, we’ll try to gauge the potential number of hours per week that are no longer spent commuting to work. Clearly, not every employee is working from home these days. So this is a “back-of-the-envelope” calculation, which uses available information to approximate answers to very complex questions.*

First, we use the latest data (which is from 2018) on the average daily commuting time for three suburban counties:

  • 29.57 minutes in DuPage County, IL
  • 24.30 minutes in St. Louis County, MO
  • 32.18 minutes in Fairfax, VA

Next, we multiply those average commuting times by the number of employed persons in those counties. Then we divide each figure by 60 to transform minutes to hours and multiply that by 5 to account for a 5-day workweek.

The FRED graph above shows the potential number of hours per week spent on commuting that are being saved by working from home: Between April and July, that potential weekly time savings in each county ranges from 1 million to 1.5 million hours.

*The physicist Enrico Fermi used this method to great effect in his research and teaching to get rough orders of magnitude. We wonder what Professor Fermi would have been able to accomplish if he had access to FRED… He received a Nobel Prize in physics in 1938 and passed in 1954, long before FRED came to be.

How this graph was created: Search for and select “Employed Persons in DuPage County, IL.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Employed Persons in St. Louis County, MO” and “Employed Persons in Fairfax County, VA.” Next, click on “1Y” above the graph to display the last 12 observations. Next, customize each line by applying the formula (a*average commuting time/60)*5. For Line 1, that formula is (a*29.57/60)*5. Last, from the “Edit Graph” panel, click on the “Format” tab and select line colors and mark types to taste.

Suggested by Diego Mendez-Carbajo.

View on FRED, series used in this post: LAUCN170430000000005, LAUCN291890000000005, LAUCN510590000000005

What are the odds? Prices differ between hotels and casino hotels

The FRED Blog recently discussed the large reductions in travel related to the COVID-19 pandemic. Today we expand that analysis to include a specific aspect of travel: hotel stays.

The graph above shows producer price index (PPI) data from the Bureau of Labor Statistics (BLS) that measure price changes from the perspective of the seller. Percent changes in prices from a year ago are shown for both stand-alone hotels (in gold) and hotels attached to casinos (in red).

Seller prices began dropping for stand-alone hotels in February, and the downturn has persisted through the summer: During peak season (June to August) prices were, on average, 17% lower than they were a year ago.

But hotels attached to casinos show an increase for most of this time period. This disparity reflects the different drivers of consumer demand for stays at these two different types of hotel. Moreover, it may reveal different levels of risk aversion during a pandemic among these consumers.

Learn more about COVID-19’s impact across industries from this Economic Synopses by Matthew Famiglietti, Fernando Leibovici, and Ana Maria Santacreu.

How this graph was created: Search for and select “Producer Price Index by Industry: Hotels (Excluding Casino Hotels) and Motels.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Producer Price Index by Industry: Casino Hotels.” Use “Edit Line 1” to change “Units” to “Percent Change from Year Ago” and click “Copy to All” to apply this change to line 2. Use the “Format” tab to select “Graph type: Bars” and select colors to taste.

Suggested by Diego Mendez-Carbajo.

View on FRED, series used in this post: PCU7211172111, PCU721120721120

Unemployment rates by country during COVID-19

Considering differences in pandemic-related policies

In a previous post, we mapped unemployment claims for U.S. states during the COVID-19 pandemic. Today, we compare the unemployment rates of seven high-income countries.

The graph shows monthly, seasonally adjusted unemployment rates for Japan, Germany, U.K., U.S., Canada, France, and Italy. These rates are harmonized—that is, the same definition of unemployment is used for all these countries.

U.S. unemployment spiked from 3.5% in February 2020 to 14.7% in April. (It spiked similarly in Canada, from 5.6% to 13%.) But unemployment did not rise significantly in other countries. What explains this difference?

Countries that reduced the spread of COVID-19 early on have had less severe economic contractions, which may help explain the low unemployment rates in Japan and Germany. However, this doesn’t explain the overall trend of higher unemployment in the U.S. when the U.K., France, and Italy have also been heavily impacted by the pandemic.

In Europe and Japan, the government’s approach to unemployment during COVID-19 has focused on maintaining employer-employee relationships. Significant subsidies have been provided for employers to maintain their workforces, leading to fewer applications for unemployment insurance benefits. In the U.S., policy has focused on providing unemployment benefits to workers that have already been laid off or furloughed. It remains to be seen which approach will be more effective in supporting labor markets.

How this graph was created: From FRED’s main page, browse data by “Source.” Click on “Organization for Economic Co-operation and Development” and then “Main Economic Indicators.” On the left, filter by “Unemployment,” “Harmonized,” and “Seasonally Adjusted.” Select the monthly unemployment rates for Germany, Japan, the United States, Italy, France, Canada, and the United Kingdom. Select “Add to Graph” at the top of the page. From the “Edit Graph” panel, use the “Format” tab to change colors/line markers as desired.

Suggested by Iris Arbogast and Yi Wen.

View on FRED, series used in this post: LRHUTTTTCAM156S, LRHUTTTTDEM156S, LRHUTTTTFRM156S, LRHUTTTTGBM156S, LRHUTTTTITM156S, LRHUTTTTJPM156S, LRHUTTTTUSM156S


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