Federal Reserve Economic Data

The FRED Blog occasionally refers to ALFRED, the archive of historical versions (or “vintages”) of FRED data that recently turned 15. It has been featured in posts about recurring revisions of employment data. Today we call upon ALFRED to illustrate a different type of data revision: one where the methodology for calculating the data changes.

Here’s an analogy: Imagine preparing a pitcher of fresh lemonade. The recipe that you follow is the methodology; the lemons are the information available to you at the time you mix all the ingredients; and the delicious lemonade is the final product of your work, the data.

Some data, such as gross domestic product and nonfarm employment, are revised up to three times because it takes time and effort to assemble economic information and not all of it is immediately available. These lemons have uneven sizes and yield different amounts of juice.

The ALFRED graph above, though, shows a change in data methodology. The organization reporting the number of active real estate listings, Realtor.com, has changed its process to account for real estate listings. The recipe has changed: The dashed blue line shows the data calculated with the old methodology, and the solid red line shows the data calculated with the new methodology.

Revising the procedure used to report this metric of the housing inventory resulted in decreases of up to 5.7% in the count of single-family and condo/townhome homes listed for sale. To learn more about the data themselves, read the notes below every FRED or ALFRED graph. Those notes are updated when the methodology used by the source changes.

How this graph was created: Search ALFRED for “Housing Inventory: Active Listing Count in the United States.” By default, ALFRED shows a graph with two sets of bars: the most recent vintage and the prior vintage. To change the graph type and style of the series use the “Format” panel.

Suggested by Diego Mendez-Carbajo.

The first shaded region on the FRED graph above indicates the 2008-09 Great Recession. In that recession, the seasonally adjusted unemployment rate (red line, right axis) nearly doubled from 5% in December 2007 to 9.5% in June 2009. At the same time, seasonally adjusted credit card delinquency rates (blue line, left axis) increased from 4.6% in the fourth quarter of 2007 to 6.8% in second quarter of 2009. In short, as workers became unemployed, some stopped making on-time credit card payments.

Research by Athreya, Sánchez, Tam, and Young (2015) shows how this relationship can emerge in a model where low-income households may skip credit card payments (“informal default”) to sustain a minimum level of consumption.

The FRED graph also shows the most recent recession, caused by the COVID-19 pandemic, from February 2020 to April 2020. During this time, the seasonally adjusted unemployment rate spiked from 3.5% to 14.8%, a more than fourfold increase. However, unlike in the Great Recession, seasonally adjusted credit card delinquencies declined. Thus, there was a slight negative correlation between unemployment and credit card delinquency rates. What would cause such different behavior in credit card repayment during this recession?

It is probably a mix of several reasons: easy access to forbearance programs, unusually generous unemployment insurance programs, and government stimulus checks. Of course, more research is needed to understand the specific role of each of these programs.

How this graph was created: Search for and select “Delinquency Rate on Credit Card Loans, All Commercial Banks.” Open the graph, click on “Edit Graph,” open the “Add Line” tab, and search for and select “UNRATE.”

Suggested by Juan M. Sánchez and Olivia Wilkinson.

FRED has some surprising international data, including U.S. trade data for Christmas Island.

Christmas Island doesn’t appear to be a home for Santa, as it is just south of Indonesia, administered by Australia, with remarkably stable tropical weather. A couple of thousand inhabitants principally work in phosphate extraction from guano deposits. It was named on December 25, 1643, by a British captain sailing past it. The first human set foot on the island in 1688, but it took two centuries for the first settlement after the discovery of those nearly pure phosphate deposits.

Overall, trade with Christmas Island is modest, even considering its small size. The latest value for its annual worldwide exports is about $17 million. Yearly trade with the U.S. sometimes exceeds a million and sometimes is even zero.

The above FRED graph shows monthly trade with the U.S., which allows us to see several small spikes and one very large one. In September 2008, something very pricey was exported from the U.S. to Christmas Island, which the Census Bureau trade database classified as jewelry: NAICS codes 339911 (Jewelry except Costumes) and 339913 (Jewelers’ Material and Lapidary Work). Was it a Christmas gift?

How this graph was created: Search FRED for “Christmas Island imports.” Once you have the graph, use the “Edit Graph” panel to open the “Add Line” tab. Then search for and select “Christmas Island exports.”

Suggested by Christian Zimmermann.