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Has the Canadian trade balance permanently shifted?

The U.S. trade balance, especially for goods, receives a lot of attention. Of course, FRED has data from all over the world, so we can stroll north a bit and look at the Canadian trade balance of goods.

Note the deep plunge in 2008, which Canada still hasn’t recovered from. First, it’s unusual to see a shock in the data this drastic and persistent, especially without a revolution or economic collapse of some kind. Second, for Canada, the Great Recession has looked much more like a normal recession than it has elsewhere in the world. So why the big chill in Canadian trade? Canada’s trade balance has always hinged on primary commodities. This country is a major exporter of all sorts of minerals and agricultural products—especially oil. These commodities are traded on world markets and are sometimes subject to wild price swings. And commodity prices did indeed run high until 2008, when they crashed. While they’ve recovered somewhat since then, the particular composition of Canadian imports and exports has kept the trade balance mostly negative. Is it going to stay that way? Check back in a few years, eh?

How this graph was created: Search for “Canada trade balance” and click “Add to Graph.”

Suggested by Christian Zimmermann.

View on FRED, series used in this post: BPBLTD01CAQ637S

The pitfalls of mapping poverty

Definitions are important, but difficult to pin down

Where is poverty prevalent in the United States? There’s no simple answer to this question because notions of poverty differ. And defining an objective threshold for poverty is especially difficult. But we can use FRED to put forth a good-faith effort. The Census Bureau uses a specific procedure to categorize poverty and then provides the data: First, they categorize 48 types of American households—which vary by age and composition. Second, they determine what income counts toward the threshold. And third, they determine what that threshold is. They then estimate what proportion of these households live below that threshold.

The results at the county level are shown in the GeoFRED map above. Before interpreting it, though, one needs to keep in mind that there’s no geographical variation for the poverty thresholds. This means that two families with the same income may be considered to be living in poverty regardless of whether they live in a high-cost or low-cost county. This absence of regional adjustment may bias the map. Indeed, according to some (subjective) poverty standards, too many people may be counted as poor in Mississippi (where costs are rather low) and not enough may be counted in the Washington, DC, area (where costs are rather high). So, one should always be cautious when looking at poverty data.

How this map was created: Go to GeoFRED, select county-level data, and search for “Estimated Percent of People.” (This label isn’t very helpful, but the FRED Team is hoping to improve that in the near future.)

Suggested by Christian Zimmermann.

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