Federal Reserve Economic Data

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.

Today, the FRED Blog offers its 750th post of engaging graphs from the FRED data library. To celebrate, we draw a serendipitous connection between historical and current economics.

In 1271, 750 years ago, Marco Polo first left Venice for Asia. In the spirit of this traveling merchant, the FRED Blog compares air freight costs to and from Asia, which is not as straightforward as you might think.

The FRED graph above shows the price index for air freight (cargo) reported by the U.S. Bureau of Labor Statistics: U.S. cargo outbound to Asia in blue and U.S. cargo inbound from Asia in red. Because this data series uses an index number, equal to 100 in the year 2000, we can’t compare the actual price levels for flying cargo back and forth between the U.S. and Asia. However, we can compare the rates of growth of air freight prices and point out some thought-provoking patterns.

Between 1992 and 2020, both inbound and outbound air freight prices moved nearly in lockstep. That should be expected if the back-and-forth routes are very similar. Then, between February and May 2020, the COVID-19 pandemic caused a large spike in prices due to the drop in overall international travel driven by health and safety protocols. However, since mid-2020, inbound air freight prices have maintained a faster rate of growth than outbound air freight prices.

The reason for this disparity? Supply and demand.

This article from the Bureau of Labor Statistics describes how air freight flies both in dedicated cargo planes and in the holds of passenger planes. Increased U.S. demand for COVID-19-related masks, gowns, and other personal protection equipment drove air shipping costs up at the same time that inbound passenger travel decreased.

If Marco Polo were collecting mementos from trips to Asia today, he would be paying significantly more to ship them home than he would to send thank-you gifts to Asia for the hospitality he received.

How this graph was created: Search for and select “Outbound Price Index (International Services): Air Freight for Asia.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Inbound Price Index (International Services): Air Freight for Asia.” To change the line style of the series use the “Format” panel.

Suggested by Diego Mendez-Carbajo.

2021 is winding down, and new year’s resolutions are in the air. The FRED team is also thinking ahead to 2022, when it will update its data repository to reflect the discontinuation of several financial data series and the new  reliance on some replacement series.

This FRED news post provides the details of this transition. For example, 35 London interbank offered rate (LIBOR) benchmark rates produced by the Intercontinental Exchange (ICE) will no longer be calculated as of December 31, 2021. The Bank of England foretold this change in 2017 and is taking over the production of replacement series, including the Sterling Overnight Index Average (SONIA).

The FRED graph above shows the soon-to-be-discontinued overnight LIBOR in blue and its replacement, SONIA, in red. In short, both series are intended to reflect the interest rate at which banks could borrow money (denominated in British pounds, a.k.a. sterling) on unsecured terms in wholesale markets. The series are very similar in value, even though they’re calculated using different methodologies: LIBOR used a survey of large banks and SONIA is a trimmed mean of the relevant interest rates.

In the world of financial data, substituting one benchmark interest rate for another is a major endeavor. Know that FRED is at the ready to help data consumers adapt to these changes.

How this graph was created: NOTE: Data series used in this graph have been removed from the FRED database, so the instructions for creating the graph are no longer valid. The graph was also changed to static a image.

Suggested by Diego Mendez-Carbajo.