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Unemployment rates by country during COVID-19

Considering differences in pandemic-related policies

In a previous post, we mapped unemployment claims for U.S. states during the COVID-19 pandemic. Today, we compare the unemployment rates of seven high-income countries.

The graph shows monthly, seasonally adjusted unemployment rates for Japan, Germany, U.K., U.S., Canada, France, and Italy. These rates are harmonized—that is, the same definition of unemployment is used for all these countries.

U.S. unemployment spiked from 3.5% in February 2020 to 14.7% in April. (It spiked similarly in Canada, from 5.6% to 13%.) But unemployment did not rise significantly in other countries. What explains this difference?

Countries that reduced the spread of COVID-19 early on have had less severe economic contractions, which may help explain the low unemployment rates in Japan and Germany. However, this doesn’t explain the overall trend of higher unemployment in the U.S. when the U.K., France, and Italy have also been heavily impacted by the pandemic.

In Europe and Japan, the government’s approach to unemployment during COVID-19 has focused on maintaining employer-employee relationships. Significant subsidies have been provided for employers to maintain their workforces, leading to fewer applications for unemployment insurance benefits. In the U.S., policy has focused on providing unemployment benefits to workers that have already been laid off or furloughed. It remains to be seen which approach will be more effective in supporting labor markets.

How this graph was created: From FRED’s main page, browse data by “Source.” Click on “Organization for Economic Co-operation and Development” and then “Main Economic Indicators.” On the left, filter by “Unemployment,” “Harmonized,” and “Seasonally Adjusted.” Select the monthly unemployment rates for Germany, Japan, the United States, Italy, France, Canada, and the United Kingdom. Select “Add to Graph” at the top of the page. From the “Edit Graph” panel, use the “Format” tab to change colors/line markers as desired.

Suggested by Iris Arbogast and Yi Wen.


The Fed’s balance sheet

Assets and liabilities of the Federal Reserve Banks

A graph is an excellent way to visualize economic data, and FRED gives you the power to construct these graphs. But some data—balance sheets, for example—convey information more clearly in table form.

Say you want to understand the Fed’s response to the current pandemic. A good place to start is the Fed’s balance sheet, which is published weekly: Table 5: Consolidated Statement of Condition of All Federal Reserve Banks.* Here, the consolidated assets and liabilities of the Federal Reserve Banks are offered in three columns: the most recent release, the previous release, and the release from a year ago. (You can also select specific releases using the calendar tool. The data below are as of September 16, 2020.)

Over the past year, the Fed’s assets have grown by about $3.2 trillion. If we inspect asset categories, we can see which are most responsible for the increase in total assets. The holdings of “U.S. Treasury securities” (purchases of notes and bonds with maturities longer than a year) grew by  $2.3 trillion, which is most of the overall increase.

An increase in assets implies a corresponding increase in liabilities. Here, we can see that currency (“Federal Reserve Notes”) has not grown much over the past year compared with other categories. Bank reserves (“Other deposits held by depository institutions”) and the “U.S. Treasury General Account” have grown significantly—about $1.5 trillion and $1.4 trillion, respectively. Of course, you could also graph these series to see how they’ve evolved. Just click on the checkbox next to each table item and select “Add to Graph”:

As we can see, since late 2008, the Fed’s purchases of U.S. Treasuries and bank reserves track each other closely. This is because the Fed buys securities from banks, which in turn have kept most of the proceedings from these sales at their account with the Fed. Recall that the Fed, as part of its response to the Financial Crisis of 2007-08, started paying interest on bank reserves in October 2008.

More recently, and especially since the current pandemic started, there is a noticeable gap between Treasury holdings and bank reserves. This gap is explained by the Treasury account at the Fed, which consists of the funds that the federal government has not yet spent. Over the past few months, the federal government has issued large amounts of new debt, some of which has been bought by the Fed with the rest absorbed by the market. However, a significant portion of the funds raised with this new debt remain unspent, as evidenced by the large size of the Treasury account. Over time, as these funds get spent, they will be transformed into currency and bank reserves.

*To reach this table, go to FRED’s homepage: Click on “Browse data by…Release.” On the releases page, scroll down to “H.4.1 Factors Affecting Reserve Balances,” which displays all the tables associated with this release, including Table 5.

Suggested by Fernando Martin.

View on FRED, series used in this post: WDTGAL, WLODLL, WSHOTSL

Staying put during the pandemic: Fewer miles in trains, planes, and automobiles

An earlier FRED Blog post covered the trends and cycles in the average number of miles per person traveled on the road. More recently, we’ve seen changes in all kinds of travel as a result of the COVID-19 pandemic.

The graph above uses data from the Department of Transportation’s Bureau of Transportation Statistics on the number of miles traveled each month by people riding trains, planes, and automobiles.

  • A rail passenger-mile is 1 passenger carried 1 mile.
  • An air revenue passenger-mile is 1 paying passenger carried 1 mile.
  • And vehicle miles traveled is the sum of the number of roadway miles traveled by each vehicle and (barring unoccupied self-driving cars) amounts to at least 1 person per vehicle per mile.

Before the pandemic, in February 2020, for each mile traveled by rail there were 167 miles traveled by air and 511 miles traveled by road vehicle. But as professional sport games and cultural and recreational venues closed, personal travel plans were scrapped; and the need for social distancing replaced business travel with teleconferencing.

Between February and April

  • Travel by rail declined 92%.
  • Travel by air declined 96%.
  • Travel on roads declined 41%.

All types of miles rebounded between April and May. Travel by rail and air improved some but the difference is almost imperceptible. Travel on roads rebounded the most, which may reflect a partial substitution from trains and planes to automobiles, where social distancing is much easier to accomplish. But as of May, road miles still remained 27% below their February value.

Remember to bookmark the FRED Blog. Visit us often and rack up your frequent reader miles.

How this graph was created: Search for and select “Rail Passenger Miles.”
From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Air Revenue Passenger Miles” and “Vehicle Miles Traveled.” Next, customize Line 1 by typing the formula a/10 and clicking “Apply.” Last, from the “Edit Graph” panel, click on the “Format” tab. Under Line 3, select “Y-Axis position: right” and select colors to taste. Note: Because the order of magnitude of each series is dramatically different, we customized the data units and graph format to allow us to see the three series at once.

Suggested by Diego Mendez-Carbajo.

View on FRED, series used in this post: AIRRPMTSID11, RAILPMD11, VMTD11

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