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Data on the “luck” of the Irish

Tracking Ireland's house prices, GDP, and unemployment

Yesterday was St. Patrick’s Day, which honors the patron saint of Ireland. Many in the United States (with or without Irish ancestry) also tend to observe this feast day. But now that the parades are over, let’s take a minute to see what Ireland’s economy is up to.

Ireland is on the fringes of Europe and heavily dependent on the vagaries of its large neighbor, the United Kingdom. So it faces twin challenges:

  • difficult integration with the rest of Europe
  • strong fluctuations due to its small size, lack of diversification, and dependence on others

These challenges are apparent in the FRED graph above: Ireland had a deep and long recession around 2009, with a big drop in GDP, high unemployment, and collapsing real estate prices.

But the country recuperated and has done relatively well through the pandemic. However, it faces new uncertainties with Brexit: Will it be a boon, thanks to business moving from the United Kingdom to Ireland? Or will it be a bust, as Ireland’s geographic location becomes even more challenging? Revisit this post every St. Patrick’s Day to follow the luck o’ the Irish, as the FRED graph will update automatically with new data.

How this graph was created: Search for and select one of the series. From the “Edit Graph” panel, use the “Add Line” tab to add the two other series. Use the “Format” tab to switch sides for the legends (which helps in getting several series with different units visible in a single graph) and change the order of the series in the legend to match the order in the graph.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: LRHUTTTTIEM156S, NYGDPPCAPKDIRL, QIER628BIS

Long-term trends in car and light truck sales

The FRED graph above tracks vehicle sales in the United States since 1976. Despite a substantial increase in population, the general trend of vehicle sales is surprisingly flat. But the composition has changed: The proportion of automobiles (in purple and green) has decreased significantly in favor of light trucks and SUVs (in blue and red).

The FRED graph below tracks the same data, but the series are ordered differently: foreign vehicles on the top and domestic vehicles at the bottom. This reordering doesn’t change anything, but it does illuminate the increase in the share of light trucks and SUVs over cars—which occurred among domestic and foreign vehicles alike.

Finally, these trends hide considerable churn: The automobile industry is especially susceptible to recessions, like all sectors that produce investment goods. But we can see the pandemic recession is special, given that the deep drop in sales lasted for only a short period compared with other recessions.

How these graphs were created: Search for “car sales” on FRED, then look for the release table below the graph. There, check the series to display and click “Add to Graph.” Start the graph in 1976, when all series are available. From the “Edit Graph” panel, use the “Format” tab to change the graph type to a normally stacked area and change the order of the series to suit tastes.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: DAUTOSAAR, DLTRUCKSSAAR, FAUTOSAAR, FLTRUCKSSAAR

What happened to the median wage in 2020?

The power of the composition effect

Our first FRED graph traces the evolution of the median weekly wage in the United States. See the spike in 2020? Does this huge increase mean everyone got a huge raise? No, it does not. As we’ll try to show in this post, the so-called composition effect is misleading us here.

We’ve discussed the composition effect before, which is basically that group averages can mask true individual experiences.

Our second graph shows employment for various education levels, excluding non-salaried workers: We see that more education made it less likely to lose a job in 2020.

The third graph shows the number of employed people by education, including non-salaried workers: All categories decreased, but the decreases were disproportionally larger for the less educated.

The second and third graphs show us where that composition effect kicks in: After losing more low-wage jobs than high-wage jobs, the median wage had to go up. Remember: With a median, in this case median wage, half the jobs are above and half are below. If you remove more jobs from the bottom half than the top half, the median wage will rise.

How these graphs were created: For all graphs, start at the Weekly and Hourly Earnings from the Current Population Survey release tables and navigate to the table of interest. Check the series you want to display and click “Add to Graph.”

Suggested by Christian Zimmermann.

View on FRED, series used in this post: LEU0252881600Q, LEU0252916400Q, LEU0252917000Q, LEU0252918800Q, LEU0252919400Q, LEU0254929100Q, LNS12027659, LNS12027660, LNS12027662, LNS12027689


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