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Loving unemployment

A Valentine's Day post for Texas and Oklahoma

For Valentine’s Day, we embrace the subject of unemployment. Specifically, this graph shows the unemployment rate for 2 of the 3,000+ U.S. counties for which FRED has data: Love County in Oklahoma and Loving County in Texas. Besides their affectionate names, what’s so special about them?

Loving County has a rather unusual unemployment rate: It can stay at 0% for several months in a row or it can shoot up to 16%. This is what happens when a county has only 134 residents. Also, the BLS gathers unemployment numbers from surveys, so only some residents of this county were reached. The results, therefore, are (1) very volatile due to small samples and (2) more frequently off the mark.

Love County is an agriculture-centric county of a more traditional size: 10,000 residents. Such counties have unemployment rates that are below the national average and more stable, and this holds true here. The only unusual aspect is the uptick in the previous recession. The county’s largest employer is a casino, and that industry suffered a lot in the recession.

How this graph was created: Search for “loving unemployment” and, yes, the series you need will be among the few choices. Check the relevant series and click “Add to Graph.” To add the nice pink frame, go to the “Edit Graph” panel’s “Format” tab and play with the coloring options.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: OKLOVE5URN, TXLOVI1URN

How much cash is out there?

This graph shows U.S. dollars in circulation per capita—in other words, how much physical cash is held outside the Federal Reserve for each person living in the U.S. As of the November 2018 observation, that amount is $6,575. We checked, and no one on the FRED Blog team is holding that much cash right now. We assume not many of our readers would hold that much cash. So, who is holding it? Part of it may be lost. Much of it is held by domestic businesses and governments. And then there are all those dollars held abroad. In some countries, the dollar is valued over the local currency for its stability and low inflation rate. In fact, the following countries have adopted the U.S. dollar as legal tender and abolished their own currency: British Virgin Islands, Caribbean Netherlands, East Timor, Ecuador, El Salvador, Marshall Islands, Federated States of Micronesia, Palau, Panama, and Turks and Caicos Islands. Many more countries use the U.S. dollar alongside their own currency, either formally or informally. In addition, in those countries where the banking system is underdeveloped or not trusted, savings can be held mostly in U.S. cash in freezers and mattresses. (Note that foreign currency reserves held by central banks are rarely cash: They’re mostly held in Treasury bonds or accounts at the Fed.)

How this graph was created: Search for “currency in circulation” and click on the monthly series. From the “Edit Graph” panel, add a monthly population series, and apply formula a/b*1000.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: CNP16OV, MBCURRCIR

Foreign direct investment

This FRED graph plots quarterly foreign direct investment (FDI) flows into the U.S. as a percent of GDP. And what is FDI? It’s the flow of capital across borders when a firm owns a company in another country. But it’s more than simply owning stock in a foreign company: It implies that the investor is directly involved in the foreign company’s day-to-day operations.

FDI is beneficial to job creation and a country’s growth. In the U.S., it began to pick up after 1975 and spiked in the late-1990s and early 2000s, corresponding with the tech bubble. During recessions, which are represented in the graph by shaded bars, FDI systematically falls. Since the Great Recession, average FDI flows have been higher than in previous decades, ranging from 1% to 2% of GDP each quarter.

How this graph was created: Search for and select “Rest of the world; foreign direct investment in U.S.; asset, flow series (ROWFDIQ027S).” From the “Edit Graph” panel, use the customize data option to add the nominal quarterly GDP series (GDP). In the formula box, type ((a/1000)/b)*100 and click “Apply.”

Suggested by Brian Reinbold and Paulina Restrepo-Echavarria.

View on FRED, series used in this post: GDP, ROWFDIQ027S

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