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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


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