Federal Reserve Economic Data

As gas prices have soared, various polities have proposed the reduction or temporary elimination of excise taxes on fuel, to provide relief to households. There are various issues attached to this proposal, and we touch on a few in this post.

How much relief would this provide? To answer this question, we propose the FRED graph above, where we express the fuel excise taxes at the state and federal levels and express them as a percentage of disposable income. (That is, the income that household have for expenses after paying taxes.)

The first thing we see is that this percentage has been declining almost constantly, more than halving in about three decades of data. The second thing is that, as of 2020, about a quarter of a percent of disposable income is dedicated to fuel excise taxes. Is that a lot or not? We’ll let the reader make that judgement.

That said, prices do act as a signal of scarcity. If the recent surge in gas prices is a reflection of a mismatch between supply and demand, lowering the price to consumers is only going to aggravate that mismatch. Conversely, if the goal is to reduce fuel consumption for whatever reason, increasing its price is going to work better that reducing it.

How was this graph created: Search FRED for “federal diesel tax.” From the “Edit Graph” panel, use the “Customize data” field to search for and add the “federal gasoline tax,” “state fuel tax,” and disposable income series. (For the last, use the nominal not real measure.) Apply formula (a+b+c/1000)*100. (Use 100 here to get percentages and 1000 here to get the same units.)

Suggested by Christian Zimmermann.

The FRED Blog has looked into internet use rates around the world. Today, we bring the topic of internet services back to the United States by visualizing the fraction of personal consumption expenditures on communication services taken up by the internet between 1987 and 2021.

The FRED graph above shows the three categories of personal consumption expenditures on communication services currently reported by the U.S. Bureau of Economic Analysis:

• Telecommunication services (in blue): spending on landline and cellular telephone services.
• Postal and delivery services (in red): spending on first class U.S. postal service and other delivery services (not from the USPS)
• Internet access services (in green): spending on internet services and electronic information providers.

The areas in the graph show the fraction of overall expenditures for each type of service. In 1929, telecommunication services represented 84% of all communication expenditures. By 2021, that share had shrunk to 64%, partly the result of the growing use of internet services. First accounted for in 1987, expenditures on internet services amounted to 30% of overall communication expenditures in 2021.

As a fraction of total personal expenditures, spending on communication services grew at a fairly steady pace between 1929 and 2000 (see graph here). Because consumer prices on communication services have declined since 1997 (see graph here), the reduced spending might not imply lesser use of communication services. Moreover, as high-speed internet services are increasingly delivered through wireless networks, cellular phone use and internet access are gradually blending.

Did you know that FRED launched a cellphone app 10 years ago? If you’re reading this FRED Blog post on your cellphone, you’re likely part of that trend blurring the line between telecommunications and internet services.

How this graph was created: Search for “Personal consumption expenditures: Telecommunication services.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Personal consumption expenditures: Postal and delivery services” and “Personal consumption expenditures: Services: Internet access.” Next, from the “Format” panel, select “Graph type: Area” and “Stacking: Percent.”

Suggested by Diego Mendez-Carbajo.

The FRED Blog has compared mobile cellular subscriptions across countries, highlighting the rapid adoption of that communication technology in some developing economies. Here, we revisit the idea of “going mobile” by comparing it with its counterpart of “cutting the cord” (i.e., landline phone service).

The FRED graph above shows data from the Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics. The purple area represents consumer spending on cellular phone services as a percentage of total consumer spending on telephone services. The green area represents the percentage of spending on residential landline phone service, voice over internet protocol (VOIP), and phone cards.

The available data show a gradual change in spending patterns from landline phone service toward mobile phone service between 2013 and 2020. The longer-running trend of “cutting the cord on landlines” is described by Brett Creech.

Speaking of phone lines… Did you know that FRED was launched 31 years ago as a free electronic bulletin board of economic data that users could access via modems connected to personal computers through phone landlines? By 1995, FRED was on the world wide web and anybody could access it through the internet.

How this graph was created: Search for and select “Expenditures: Residential Phone Service, VOIP, and Phone Cards: All Consumer Units.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Expenditures: Cellular Phone Service: All Consumer Units.” Next, from the “Format” panel, select “Graph type: Area” and “Stacking: Percent.”

Suggested by Diego Mendez-Carbajo.