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Comparing apples and oranges


When we talk about apples and oranges, we usually mean objects or concepts that cannot be compared. But FRED is all about comparing many kinds of economic data, and it allows you to place series that represent different concepts from different sources in the same graph. It even allows you to compare apples and oranges. Literally.

The graph above shows the producer price index (PPI) for several varieties of apples. A quick look at the graph reveals two things: First, the lines are not continuous. This very specific product doesn’t have price observations for every month. Second, the deviations across varieties of apples are sometimes large and persistent.

What about oranges? The producer price index also includes information about frozen orange juice, for which there has been a “liquid” market for decades. In the graph below, we compare the PPI for frozen orange juice with the PPI for red delicious apples (which is the apple with the most information available). What’s surprising is that the price of frozen orange juice fluctuates just as much as the price for fresh fruit. But while the price of apples is clearly influenced by seasonal factors, the price for orange juice appears more persistent, especially in recent years.

How these graphs were created: Searching for “apple” gives you a long list of fruit-related series sorted by popularity, but the series we want for this graph are at the bottom of that list. Apparently few people are interested in the price of apples… Searching for “PPI apples” gets you the series you want (plus a few others). Select them, click on the “Add to graph” button, and restrict the sample to the past 10 years. The price indexes have different base years. To make them uniform, we choose “Index (Scale value to 100 for chosen period)” under “Units” and enter 2008-06-01 for all series except the special index. (FRED will choose the closest date if there are missing observations.) Finally, change the color of the special index to black and make the line thicker. For the second graph, search for “PPI orange,” add that series to the graph, and then add the series for red delicious apples.

Suggested by Christian Zimmermann

View on FRED, series used in this post: PCU31141131141117, WPU01110208, WPU01110209, WPU01110211, WPU01110215, WPU01110216, WPUSI01102A


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