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Japan’s anti-retirement miracle

The graph above shows real GDP growth for two countries, Japan and the United States. It's pretty clear the U.S. growth rate has consistently been higher than Japan's. (Recently, there have been only a few quarters where Japan has higher growth.) But can we really compare these two growth rates? One important difference between the two countries is that the U.S. population is growing while Japan's is stagnant, if not declining.

The second graph shows GDP growth adjusted by the working age population—that is, the growth rate of GDP less the growth rate of the working age population. Now the story is different: Japan performs better than the U.S. in most quarters.

How does Japan do it? One way is through increasing its labor force participation, which the third graph shows. More women in Japan have joined the labor force, and more older people are staying in the labor force. This latter point is especially important for Japan, which has one of the oldest populations (if not the oldest) in the world.

How these graphs were created: For the first graph, search for Japan real GDP, select the series, and click on "Add to Graph." From the "Edit Graph" panel, add a line by searching for "real GDP," select as units "percent change from previous year," and click "Apply to all." For the second graph, take the first and for each line add a series by searching for "working age population 15-64," choose units "percent change from previous year," and apply formula a-b. For the third graph, search for "employment rate 15-64" and the two series should be among your top choices. For all graphs, adjust the sample period to start when both series are available.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: GDPC1, JPNRGDPEXP, LFWA64TTJPM647S, LFWA64TTUSM647S, LREM64TTJPA156N, LREM64TTUSM156S

Which workers quit more?

Obviously, workers move from job to job over time and across sectors of the economy. FRED has some convenient release tables you can use to create a graph like the one above, which shows the rate of voluntary turnover (quits) for workers in four sectors: accommodation and food services, retail trade, manufacturing, and government. It's striking that the ranking of these sectors doesn't change despite variations in their levels of employment over time. The consistency of these and other sectors becomes even more striking once you strip out the seasonal adjustments, as in the graph below, created with another convenient release table. In fact, seasonal variation seems to be stronger than variation caused by the business cycle. For example, people quit more when the unemployment rate is lower. If we look closely, we can see some details: It's remarkable that, on a regular basis, monthly quits in accommodation and food services represent about 5% of that workforce. And, in both graphs, the government sector consistently has the lowest quit rate. Given the right circumstances, of course, even consistent patterns can change.
How these graphs were created: Go to the release tables noted above, select the series you want displayed, and click "Add to Graph." Suggested by Christian Zimmermann.
View on FRED, series used in this post: JTS3000QUR, JTS4400QUR, JTS7200QUR, JTS9000QUR, JTU3000QUR, JTU4000QUR, JTU510099QUR, JTU7200QUR, JTU9000QUR

Do we live in uncertain times?

Ever wonder about the current state of the world? Well, FRED has two relevant indicators for the U.S. that may help you sleep better at night...or maybe worry even more. The first series calculates an index based on the proportion of newspaper stories that discuss uncertainty, changes to tax codes, and disagreement among forecasters. The second series relates more to market sentiment by looking at newspaper stories mentioning the economy, stock markets, and (again) uncertainty specifically. The graph above shows that the two series correlate well, but aren't in total lock-step. Right now, the first series seems to be about as high as it was during the last financial crisis, although it hasn't spiked as high as it did in September 2008. The second series shows that the market seems a little less worried about uncertainty, but overall it's still elevated.

Similar series are available for a few other countries. The graph below shows one for the U.K. The Brexit referendum took place on June 23, 2016, which has clearly contributed to their spike in economic uncertainty in the summer of 2016. And that uncertainty is still elevated compared with previous periods.

How these graphs were created: Search FRED for "uncertainty," select the series, and click "Add to Graph."

Suggested by Christian Zimmermann.

View on FRED, series used in this post: UKEPUINDXM, USEPUINDXD, WLEMUINDXD

The education trade balance

Our last post discussed the foreign travel trade balance—that is, money spent by foreigners for tourism, business, and education in the U.S. compared with what Americans spend abroad. In this post, we focus on travel for education. The Bureau of Economic Analysis began including travel-for-education data only recently, when they made their last big revision to GDP data. In fact, the BEA has recomputed these data for the past several years, so we can compare the old and new series to get a sense of the education trade balance. (This is a much more convenient process than adding up all the expenses of foreign students, so thanks BEA!)

The FRED graph above makes it quite apparent that foreign students spend much more in the U.S. (3.5 times more) than American students spend abroad. In fact, the surplus for the last month of available data, $3.3 billion in September 2017, is about 7% of the overall trade deficit at the time and 12% of the trade deficit with China. Obviously, this surplus is quite substantial—with the bonus of having top international students study in the U.S., and possibly remain as part of the U.S. economy, after having their education paid by funds from abroad.

How this graph was created: Search for "travel trade," select the exports series that includes education travel, and click "Add to Graph." From the "Edit Graph" panel, add the export series that removes education travel and apply formula a-b. Repeat for the imports series.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: BOMTVLM133S, BOXTVLM133S, ITMTAEM133S, ITXTAEM133S

The foreign travel trade balance

The U.S. plays host to many visitors from abroad—for tourism, business, and education. Many Americans travel abroad for the same reasons. How much is spent on this type of travel? FRED's best option for answering this question is the national income and product accounts (NIPA), which has exports and imports series dedicated to travel. The graph above includes all local expenses related to travel (food, lodging, entertainment, tuition, and business expenses) except the cost of the overseas flight. The graph shows that the U.S. is a net exporter of travel services, particularly since the most recent recession. Over the past few years, though, the gap seems to be shrinking. Because the graph above uses nominal terms, we repeat it in real terms below using specific deflators for exports and imports of services. The new trend is confirmed and, in fact, appears even stronger.
How these graphs were created: For the first graph, search for "trade travel" and you should get four results. Select the ones including education, as they have more-recent data points, and click "Add to Graph." For the second graph, use the first and go to the "Edit Graph" panel: Add a series by searching for "export deflator." Select the quarterly series pertaining to only services. Then apply formula a/b*100. Repeat for the imports. Suggested by Christian Zimmermann.
View on FRED, series used in this post: A646RD3Q086SBEA, A656RD3Q086SBEA, ITMTAEM133S, ITXTAEM133S


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