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The evolution of employment costs in the private and public sectors

A couple of months ago, FRED added Bureau of Labor Statistics data on the costs of employment. You can dissect these data in many ways—for example, by sector, type of compensation, bargaining status, occupational group, or region. Here we do a high-level comparison of compensation between the public and private sectors. These data are available as indexes, which means they reveal something about their relative evolutions over time, but nothing about their relative levels at any moment in time. The graph above tells us that wages and salaries have increased faster in the private sector. But, as both series are normalized to 100 in 2007, we can’t say whether wages had been better in the public sector and the private sector is just now catching up.

Of course, wages and salaries are only part of compensation. There are also various benefits. Some of these are difficult to quantify (pension benefits, for example, are realized only at some point in the future), but the BLS makes the effort to quantify all this. The private/public sector comparison of benefits in the graph below shows more growth in the public sector. Again, this graph says nothing about the levels. However, the two graphs in combination do tell us something: Relatively speaking, compensation in the public sector is increasingly in the form of benefits, while compensation in the private sector is increasingly in the form of wages and salaries.

How this graph was created: Search among the release tables for the Employment Cost Index and explore the data. The two graphs were created by selecting the appropriate series from Tables 1 and 3.

Suggested by Christian Zimmermann

View on FRED, series used in this post: ECIBEN, ECIGVTBEN, ECIGVTWAG, ECIWAG

Turkey price inflation

It is the season when the media add a dash of economics to the local custom of turkey dinners by reporting on the price of turkeys. At the FRED Blog, we will deviate slightly from this tradition by reporting on prices in Turkey. FRED has lots of Turkish data. At the time of this writing, in fact, there were 1,981 series. One of the most popular is the consumer price index, displayed above. As FRED graphs go, this one is rather uninformative. The data are flattened into the zero line for most years. This is likely because the data in the latter years have much larger values than the early ones. Once you look at yearly inflation (below), this is confirmed: The country experienced very high inflation rates for a very long time, leading the price index to grow very fast. The regime change in 2007, clearly visible with the inflation data below, is interesting and coincides with Turkey’s adoption of an explicit inflation target in 2006. While inflation is still high by international standards, it’s not as wild and doesn’t gobble up people’s savings.

How these graphs were created: Search for the Turkey tag, and the consumer price index should be among the top choices. For the second graph, change units to “Percent Change from Year Ago.”

Suggested by Christian Zimmermann

View on FRED, series used in this post: TURCPIALLMINMEI

Foreign exchange intervention

Foreign exchange intervention is the buying and selling of foreign currencies by central banks and finance ministries to influence the value of their own currencies. It has become rare for developed countries to intervene in foreign exchange markets. The last U.S. intervention in the foreign exchange market was in March 2011, as part of the G3 intervention with Japan and the European Central Bank (Neely, 2011).

In the bad old days, it was very difficult for researchers to obtain data on foreign exchange intervention, which central banks and finance ministries often treated as confidential. Beginning in the 1990s, however, central banks began to release foreign exchange intervention data to researchers. As intervention became rarer among developed economies, the trend toward releasing intervention data accelerated. Still, researchers needed to contact central banks directly to ask for such data.

About 10 years ago the Federal Reserve Bank of St. Louis began contacting central banks and finance ministries to obtain intervention data to post publicly on FRED to facilitate research on foreign exchange intervention. This dataset has been a little-known feature of FRED, but has been very useful to researchers. The countries that have contributed data include Australia, Germany, Japan, Italy, Mexico, Switzerland, Turkey, and the United States.

How this graph was created: Search for “foreign exchange intervention” and choose the series you want to graph. Note that currencies differ. Here, we chose the ones related to the Japanese yen.

Suggested by Christopher Neely

View on FRED, series used in this post: JPINTDDMEJPY, JPINTDEXR, JPINTDUSDJPY, JPINTDUSDRP


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