Federal Reserve Economic Data

FRED just added a new family of data that can help us get a read on the U.S. economy.

The BBKI (Brave-Butters-Kelley Indexes) draw on about 500 indicators and search for some commonality among them, thanks to a technique called dynamic factor analysis. This analysis allows for an estimate of monthly GDP and decomposes it into different components. (GDP measures are typically quarterly, and this innovation is meant to be more timely.)

The graph above shows the monthly GDP estimate along with the coincident and leading indicators for a period spanning the past two recessions. Clearly, the leading indicator was able to accurately determine the direction of the changes in this current and strange recession. Anticipating the turning points, of course, is very difficult in forecasting.

The graph below shows a decomposition of the monthly GDP indicator into various components:

1. a trend, which varies very little through time
2. a leading component—that is, which current data will influence future GDP
3. a lagging component that was largely determined from the previous period
4. a cycle component—that is, a deviation from the trend that has some persistence
5. and an irregular component of random events and one-offs with no persistence.

As with many graphs lately, things are a little bit difficult to distinguish because of the scale of the data in our current environment. So let’s concentrate on the past year. The graph below shows that the large swings in 2020 were due to different components. The large downturn was due to the cyclical and irregular components, but the large upswing was mostly irregular, which then swings back down. This back and forth isn’t cyclical, at least not at the frequency that economists typically think a business cycle should last (2 to 8 years). And indeed, these wide swings didn’t have any economic fundamentals; they were tied to the evolution of health-related concerns.

How these graphs were created: Start from the BBKI release table, check the series you want displayed, and click “Add to Graph.” Adjust the time period to taste.

Suggested by Christian Zimmermann.

The FRED Blog has looked at the speed of Internet adoption in a few countries: the U.S., China, Korea, Germany, and India. Today, we use World Bank data to widen our view and map Internet use rates around the world. Then we connect those rates to countries’ per capita GDPs.

Our first GeoFRED map identifies the number of Internet users per 100 people in each country. In countries colored blue, over 80% of the population uses the Internet: Liechtenstein is at the top, with a ratio of 99.55%. In countries colored red, under 20% of the population uses the Internet: Eritrea is at the bottom, with a ratio of 1.31%.

Our second map shows inflation-adjusted gross domestic product (GDP) per person. In countries colored blue, GDP per person (at 2010 prices) is more than $28,000 per year: Monaco, where the figure is above $186,000, is at the top. In countries colored red, GDP per person is less than $1,600: Burundi, where the figure is $214, is at the bottom.

Consider the examples of Austria, Belgium, Finland, and Germany, which have Internet use rates of 84% to 88% and per capita GDPs of $48,000 to $50,000. Now consider that Cambodia, Honduras, India, and Sudan have Internet use rates of 31% to 32% and per capita GDPs of $1,000 to $2,000.

Comparing the maps reveals the close correspondence between Internet use rates in the population and GDP per capita. Access to the Internet requires investment in physical capital, so its positive correlation with prosperity is pretty much expected. The scatterplot below also illustrates this overall relationship (read from left to right and from bottom to top) between the two variables for the 184 nations and territories during 2017:

To account for their large range of variation, the values of constant GDP per capita are plotted in logarithms. Each dot represents a country and the general shape of the dot cloud indicates a positive relationship between income levels and Internet use: On average, the richer the country, the larger the fraction of its population that is online.

By the way, more countries and territories report their Internet use than their GDP per capita. The production of economic information, much like the provision of internet services, requires investment.

How these maps were created: The original post referenced interactive maps from our now discontinued GeoFRED site. The revised post provides replacement maps from FRED’s new mapping tool. To create FRED maps, go to the data series page in question and look for the green “VIEW MAP” button at the top right of the graph. See this post for instructions to edit a FRED map. Only series with a green map button can be mapped.

Suggested by Diego Mendez-Carbajo.

The FRED Blog makes every attempt to offer right-off-the-vine FRED data, from the prices paid by consumers for strawberries, grapes, and bananas to the prices received by producers for apples and oranges. And today’s graph harvests a similar set of data with a focus on freshness.

The graph shows the proportion of consumer expenditures on fresh fruit (in orange) and fresh vegetables (in green) relative to their processed counterparts.

Consumers steadily spend almost twice as much on fresh vegetables as they do on the processed kind—a pattern that has been nearly constant between 1984 and 2019.

The appetite for fresh fruit has steadily grown since 2001: Between 1984 and 2001, consumers spent almost one and a half times more on fresh fruit than they spent on processed fruit. At the turn of the decade, that proportion started to increase and, as of 2019, stood at almost three times as much.

Consider the U.S. Department of Agriculture’s resources when planning your diet. Don’t forget to eat your fruits and vegetables, but also be sure to add a hearty serving of fresh FRED data. We hear it’s high in fiber.

How this graph was created: Search for and select “Expenditures: Fresh Fruits: All Consumer Units.” From the “Edit Graph” panel, use the “Edit Line 1” tab to customize the data by searching for and selecting “Expenditures: Processed Fruits: All Consumer Units.” Next, create a custom formula to combine the series by typing in a/b and clicking “Apply.” For the second line, repeat the same steps with the series “Expenditures: Fresh Vegetables: All Consumer Units” and “Expenditures: Processed Vegetables: All Consumer Units.” To change the line colors, use the choices in the “Format” tab.

Suggested by Diego Mendez-Carbajo.