Federal Reserve Economic Data

In the US, we commonly measure inflation with the yearly change in the consumer price index (CPI), which stands at 6.3% for January 2023. As we’ve said before in the FRED Blog, a single number like this can hide a lot of variation across all the goods consumed by Americans. So let’s look at a recent, interesting twist in prices in this country.

The FRED graph above divides the CPI into two parts: prices related to shelter and all other prices. It starts at an index value of 100 in January 2022 and ends in January 2023 to show how prices evolved over the past year. Shelter-only CPI has a value of 107.9, meaning it has increased by 7.9% since January 2022. All-items-except-shelter CPI has a value of 105.7.

The price of shelter has been continuously increasing, while the price for everything else stopped increasing in June 2022 and has even decreased a bit since. Does this mean our latest inflation episode is over except for shelter? Possibly, especially because there are data-collection lags when calculating the cost of shelter. Still, is six months enough time to claim victory and is the CPI even the right measure? We leave these difficult questions for policymakers to answer.

How this graph was created: Search FRED for CPI shelter. Click on “Edit Graph,” open the “Add Line” tab, search again for CPI shelter, but this time select the CPI less shelter. Choose unit “100 for a given date,” type in 2022-01-01, and click on “Apply to all.” Finally, reduce the sample period to one year.

Suggested by Christian Zimmermann.

Federal Reserve Chair Jerome Powell stated in November 2022 that “job openings exceed available workers by about 4 million.” That number currently stands at 4.7 million after continued strengthening of the labor market.

This mismatch between available jobs and workers to fill them has generated ongoing discussion, and the FRED graph above measures that mismatch in labor supply and demand: The civilian labor force, the amount of people working or looking for a job, is shown in red; the current employment level plus the number of job openings is shown in blue.

If the civilian labor force is greater than employment plus job openings, the economy has immediate capacity to fill open positions. Currently, the employment level plus job openings is at 170.5 million while the total civilian labor force is at 165.8 million. This is the gap of 4.7 million referred to above: that is, there are 4.7 million more jobs available than there are people available to fill them.

The pandemic has been emphasized as a cause of this acute labor shortage, but the trends in labor demand and labor supply in the graph above indicate that demand was already outpacing supply before the pandemic by about 1 million workers.

How this graph was created: Search FRED for “Job Openings” and select the right series. Click “Edit Graph,” search for “Employment levels,” then apply the formula a+b. Next, use the “Add Line” tab to search for and select “Civilian Labor Force Level.”

Suggested by Jack Fuller and Charles Gascon.

The Board of Governors reports the consolidated balance sheet of the 12 Federal Reserve Banks in its H.4.1 “Factors Affecting Reserve Balances” release. Table 5 of that release includes the sum of all assets, liabilities, and capital.

Changes in the composition of the Fed’s balance sheet reflect the operations of the Federal Reserve as it conducts monetary policy. The FRED graph above shows two series from that release as well as an indicator of the Fed’s monetary policy:

• The blue line is the weekly dollar value, as of Wednesday, of the repurchase agreement operations conducted by the Fed. These are assets to the Fed created when it temporarily purchases Treasury securities held by banks.
• The red line is the weekly dollar value, also as of Wednesday, of the reverse repurchase agreement operations conducted by the Fed. These are liabilities created when it accepts overnight deposits from financial institutions, with a security held as collateral.
• The third line, in green, is the effective federal funds rate, as reported by the Federal Reserve Bank of New York; the units are percent, which are plotted on the right axis.

The graph shows that the value of the overnight reverse repurchase agreements started to increase almost exactly 1 year before the Federal Open Market Committee (FOMC) started to raise its target range for the federal funds rate on March 17, 2022. That is, financial institutions gradually changed the composition of their own balance sheets by trading increasingly larger amounts of Treasury securities in exchange for earning the overnight reverse repurchase agreements award rate paid by the Fed. Those financial transactions effectively reduced the liquidity of lenders and, by doing so, contributed to higher interest rates for borrowers.

How this graph was created: Search FRED for “Assets: Other: Repurchase Agreements: Wednesday Level.” Click the “Edit Graph” button and use the “Add Line” tab to add the other two series: “Liabilities and Capital: Liabilities: Reverse Repurchase Agreements: Wednesday Level” and “Effective Federal Funds Rate.” Use the “Format” tab to change the Y-axis position of Line 3 from left to right.

Suggested by Diego Mendez-Carbajo.