Federal Reserve Economic Data

Although the U.S. is not feeling the direct effects of the Russian invasion of Ukraine, U.S. consumers may already be feeling the negative economic effects of higher gas prices. Are there other effects on U.S. producers that may take longer to manifest? We explore this question with two GeoFRED heat maps of the value of exports by U.S. state: one for exports to Ukraine and the other for exports to Russia.

The map of exports to Ukraine refers to data from 2017, the latest year with available data. Colored dark green, the top exporters to Ukraine were states with export values between $59.98 million and $221.69 million. These states are spread out across the U.S., with California and Washington on the West Coast, Texas in the South, Iowa and Illinois in the Midwest, and New York, New Jersey, and Pennsylvania on the East Coast. At over $221 million, Pennsylvania had the highest value of exports to Ukraine. Washington came in second, at about $122.2 million.

The map of exports to Russia also refers to data from 2017. Unsurprisingly, state-level exports to Russia tended to be larger than those to Ukraine. Top exporters to Russia had export values between $115.08 million and $607.46 million. Colored dark green, the top exporters to Russia include California on the West Coast, Tennessee and Florida in the South, Illinois and Ohio in the Midwest, and Pennsylvania, New York, and Massachusetts on the East Coast. Illinois had the highest value of exports to Russia of over $607 million, about 2.7 times the value of the top exporter to Ukraine.

Top exporters to both Ukraine and Russia are likely to feel the economic impact of the ongoing war more deeply than other states, due to trade disruptions. Four states that are among the top exporters for both countries—California, New York, Pennsylvania, and Illinois—may even suffer a twofold blow. The negative effects for any given state, however, depend on what proportion of its worldwide export value goes to Russia and Ukraine.

How these maps were created: The original post referenced interactive maps from our now discontinued GeoFRED site. The revised post provides replacement maps from FRED’s new mapping tool. To create FRED maps, go to the data series page in question and look for the green “VIEW MAP” button at the top right of the graph. See this post for instructions to edit a FRED map. Only series with a green map button can be mapped.
Suggested by Michael McCracken and Ngân Trần.

When we talk about the labor market we often focus on the unemployment rate. But an equally important measure of labor market conditions is the labor force participation rate (LFPR).

The LFPR is equal to the employed plus the unemployed, divided by a measure of U.S. population. Think of it as those who want to work (i.e., have a job or want one) relative to those who could work (the entire population over age 16 that isn’t incarcerated or on active military duty).

The above FRED graph plots the monthly U.S. LFPR starting in 1948. One striking feature is its hump shape, which is related to demographic factors. LFPR fluctuates around 59% until the late 1960s, when it starts rising. This rise is attributed to the Baby Boomer generation joining the labor force, as well as to the widespread entry of women into the labor force. The LFPR plateaus at around 67% in the late 1990s and starts to decline in the 2000s.

This decline wasn’t just a result of the Financial Crisis of 2007-08. The year 2008 is also when the oldest Baby Boomers started turning 62, the earliest age they could claim Social Security benefits.

LFPR has declined since then, which can be explained by the Baby Boomers retiring and slower U.S. population growth: Subsequent generations have been smaller than the Baby Boomer generation, so their entry into the labor force hasn’t made up for the retiring Boomers.

The recent COVID-19 crisis led to the largest drop in LFPR on record: from 63.4% in February 2020 to 60.2% in April 2020. (See this Economic Synopses essay for more on retirement during COVID-19.) While the LFPR has partly recovered, it is still below its pre-COVID levels. However, the trend line in the graph shows that the post-pandemic LFPR is not far from what we would expect, given its downward trend.

How this graph was created: Search for and select “Labor force participation rate.” From the “Edit Graph” panel, use the “Add Line” tab to select “Create user-defined line.” Set the start and end dates to January 2000 and January 2022, respectively, and the start and end values to the predicted labor force participation rates for each date based on the regression—here, 67.38711 and 61.56833, respectively. A note about the trend line: FRED has no built-in trend line functionality, so we had to download the data (Excel, Stata, or other statistical packages work), regress date on labor force participation rate values from January 2000 to January 2022, and then calculate the predicted labor force participation rates for those dates.

Suggested by Miguel Faria e Castro and Devin Werner.

The Russian Federation is the largest country on earth by area, but it is smaller than the European Union both economically and demographically. Since 2013, the EU has included 27 member countries. In 1989, typically seen as the end of the Cold War, it included 11 member countries. But neither the discussion below nor the data above depend critically on the date you choose to start comparing Russia and the EU.

GDP

The blue line shows the ratio (expressed in percentages) of Russia’s GDP to the EU’s GDP. From 1989 through 2020, Russian GDP never exceeded 15% of the EU’s. The peak occurred in 2012. Since 2013, Russian GDP has grown more slowly than the EU’s—hence, its decreasing relative size.

To gauge the importance of this difference, consider the following thought experiment: Suppose the EU spends 4% of its GDP on defense (4% of GDP is approximately how much the U.S. spends on defense). Because Russian GDP was approximately 10% of EU GDP in 2020, Russia would have to spend 40% of its GDP on defense to simply match EU spending. Obviously, 4% is just an example, but it illustrates the principle that Russia must spend 10 times more of its GDP to match the EU.

Population

The red line shows that Russia’s population has decreased from about 35.2% to 32.2% of the EU’s population from 1989 to 2020.

Comment

Combined together, the GDP ratio and the population ratio imply that the Russian Federation’s GDP per capita is also smaller than the European Union’s: about two-third smaller in 2020. This post doesn’t attempt to answer the difficult question of whether the outcome of a conflict is determined by total GDP or GDP per capita. Certainly, both variables are likely to play a role, among others. But in its current confrontation with the European Union, the Russian Federation is likely to be at a disadvantage on these two fronts.

How this graph was created: Search FRED for “GDP Russia.” From the “Edit Graph” panel, search for “GDP European Union” and apply formula a/b*100. Open the tab “new line” and repeat with population.

Suggested by Guillaume Vandenbroucke.