Federal Reserve Economic Data

Corporate profits have been growing at unprecedented rates, and inflation in producer prices has risen sharply as well. Our FRED graph above helps us compare the two and briefly discuss their relationship.

Pre-tax corporate profits (shown by the blue line) increased by 51% between the fourth quarter of 2019 and the first quarter of 2022. During the same period, producer price index (PPI) inflation in manufacturing rose by 21.2% (shown by the red line).

Why would this matter? PPI inflation measures changes in prices producers receive for their products and prices other producers pay for those products as intermediate goods in their own production. During the COVID-19 pandemic, supply chain disruptions contributed to an increase in the price of these products. (See this Review article for a deeper discussion.) And yet, corporations seem to have passed through enough of these intermediate costs onto the consumers of their final products to see record profits and large profit margins.

How this graph was created: Search FRED for “corporate profits” and select “Corporate business: Profits before tax (without IVA and CCAdj).” From the red “Edit Graph” button in the top right, use the “Add Line” tab at the top to type in the search box “PPI manufacturing” and select “Producer Price Index by Commodity: Total Manufacturing Industries.” Change the units for PPI to “Percent change from a year ago.” In the “Edit Graph” panel, use the “Format” tab and under Line 2 change the y axis to “Right.” Change dates in the top right of the graph to the desired period.

Suggested by Ana Maria Santacreu and Jesse LaBelle.

Part of the “My favorite FRED graph” guest post series.

It’s July 14th, Bastille Day! So the FRED Blog focuses on France, where the retirement age was a central issue in their recent elections.

France’s legal retirement age is 62, conditional on time worked. President Emmanuel Macron, who was re-elected in April, prefers raising it to 65. Jean-Luc Mélenchon campaigned on lowering it to 60 as part of the leftist coalition policy proposal. That political debate didn’t include a great deal of data, so we provide some here, including international comparisons.

The FRED graph above uses OECD data to display employment rates—that is, the employed as a fraction of the relevant population. In this case, the population is men 55 to 64 years old in France, Spain, Italy, the U.S., Germany, Sweden, and the Netherlands. Why only men? The differences in women’s employment rates are driven more by cultural factors, and working women aren’t the norm everywhere and in every generation.

Although France’s employment rate for men 55 to 64 is increasing, it is the lowest in this group. Some may see this as a lost opportunity to contribute to economic activity; others may see opportunities for spending free time on non-market activities that improve well-being. Opinions diverge on why many in this age category don’t manage to find work. Previous reforms postponing the retirement age have contributed to increasing employment in this age category, but could also have pushed the least-qualified workers further into poverty.

A compromise could be found in improving working conditions for seniors to extend their labor force participation while also maintaining good health for all. Sweden has consistently had an employment rate at the top of the field, so maybe they can show us that older workers and quality of life aren’t incompatible.

How this graph was created: Search FRED for “Employment Rate Aged 55-64 Males for France.” From the “Edit Graph” panel, use the “Add Line” tab to successively search for and add the other series. Use the “Format” tab to thicken the French line.

Suggested by Guillaume Gaulier.

FRED has data from Indeed.com, an online aggregator of job listings. The data are the percentage changes in seasonally adjusted job postings since February 1, 2020. That date is set by the source as the pre-COVID-19 pandemic baseline.

The FRED graph above shows large declines in the number of job postings in Australia, Germany, Ireland, the United Kingdom, the United States, Canada, and France during and immediately after the February-April recession (indicated by the shaded area in the graph). Although this dating of the recession shown here reflects economic conditions in the United States, per the National Bureau of Economic Research Business Cycle Dating Committee, we can see marked co-movement in the number of job postings across countries. Such a pattern isn’t surprising, given the worldwide impact of the COVID-19 pandemic.

However, the evolution of country-level job postings after March 31, 2021, is more intriguing.

• The decline in the number of job postings continued for another month or so in many countries. In the case of the United Kingdom, it extended into the first week of June 2020.
• There were noticeable reductions in the number of job postings in Australia, Canada, and the United Kingdom at the end of both 2020 and 2021. These are intriguing because the data are seasonally adjusted and, thus, do not reflect the regular ebbs and flows in employment that match the calendar year.
• The earliest bounce back in job postings to pre-pandemic levels, at the end of 2020, was recorded in Australia and, soon after, in the United States. Data on U.S. job openings from the Bureau of Labor Statistics show a very similar timing.

Lastly, the percentage changes in the number of U.S. job postings are noticeably less volatile month over month than those recorded in other countries. The differences in volatility may reflect differences in the relative size of Indeed.com in each country: the same change, measured in absolute value, in job postings in two countries will result in unequal percent changes when the total number of job postings themselves are different. This makes data from small samples  less informative.

In that light, it is difficult to interpret the reason behind the decline in U.S. job postings recorded since the start of 2022. Is it an early sign of a change in the phase of the labor market cycle, or does it merely indicate a switch to other channels to look for job candidates? The BLS data we referenced above does not show a contemporaneous decline in job openings, so we can’t provide even a tentative answer to this question. The FRED Blog will have more to say about the story behind those numbers when the data arrive.

How this graph was created: Start from the release table “Job Postings Indexed Trend,” check the series labeled “Change in Job Postings Indexed Trend,” and click “Add to Graph.”

Suggested by Diego Mendez-Carbajo.