Federal Reserve Economic Data

As the US began to emerge from the pandemic, many different news sources provided many different explanations for the labor shortage: from childcare disruptions and fear of illness keeping minimum wage workers out of the labor force to a new wave of retirements from older workers.

A previous post looked at the labor force overall, but today we look at changes in the labor force participation rate (LFPR) for specific age groups: 20 to 24 years old, 25 to 54 years old, and 55+ years old. We subtract the LFPR from January 2020 to show the percentage-point change in labor force participation relative to the month right before the pandemic.

When the pandemic hit, the sharpest decline in the LFPR was for workers between the ages of 20 and 24. Their LFPR decreased from 73% to 64.4% in 4 months before increasing again. However, at the end of 2022, the LFPR for 20- to 24-year-olds still hadn’t fully recovered and remained 1.7 percentage points below its January 2020 value.

This overall pattern is similar but less extreme for the other age groups. Although no age group fully recovered by the end of 2022, the 25-54 group was closest, at 0.7 percentage points below its January 2002 level. There’s been much discussion of older workers retiring early (and permanently) during the pandemic, and the 55+ group remained 1.4 percentage points below its January 2020 level as of December 2022, with no sign of further recovery.

How this graph was created: Search FRED for “Labor Force Participation 20-24” and select “Labor Force Participation Rate- 20-24 Yrs.” Click the orange “Edit Graph” button on the right: From the “Add Line” section, add the 25-54 age group by searching for and selecting “Labor Force Participation Rate, 25-54 Yrs.” Repeat this process for the “55 plus” series. All three series should have “Percent” as the units. You must customize each series by subtracting the value for the series in January 2020: From the “Edit Line” section for each age group, use the customize data section at the bottom add the following formulas in the formula bar and hit “Apply”: For 20-24 Yrs, insert a-73.0; for 25-54 Yrs, insert a-83.1; for 55+ Yrs, insert a-40.2. Finally, change the beginning date of the graph to 2018-01-01.

Suggested by Maggie Isaacson and Hannah Rubinton.

Egg prices are absolutely soaring, while chicken meat prices have been well-grounded. What gives?

Team FRED Blog never wants to sound like Chicken Little, but we also don’t want to walk on eggshells. So, first, let’s simply look at the data: The FRED graph above shows that the average price of whole fresh chickens (in brown) rose 13% between January and December 2022 while the average price of eggs (in yellow) rose 120%. That’s 10 times faster!

Now let’s combine these data with some reporting from the US Department of Agriculture: During 2022, repeated outbreaks of avian influenza ravaged farm flocks of egg-laying hens, thereby drastically reducing the supply of eggs, which drove their prices to record highs. But the price of chicken meat has not experienced the same degree of inflation. Why?

Well, farmers don’t have all their chickens in one basket. Chickens raised for meat (a.k.a. “broilers”) have been less exposed and therefore less susceptible to the avian influenza that has decimated the egg-laying hens, and the supply of broilers has been reduced less than 1/10 of 1%. Because these two separate supplies of chickens have not been equally affected, neither have their prices. And, despite the regional concentration of losses to poultry populations, the average price of eggs remained remarkably similar across US regions.

If you want to avoid getting egg on your face and, instead, rule the data roost, read on for an explanation of how we chose to present this graph: We started with the monthly data from the Bureau of Labor Statistics (the good eggs who bring you the CPI), but we transformed the units of the data from dollars and cents to an index with a customized base period of January 2022. This transformation really helps illuminate the differences between the two series that have occurred since January 2022.

How this graph was created: Search FRED for “Average Price: Chicken, Fresh, Whole.” Next, click the “Edit Graph” button and use the “Add Line” tab to add “Average Price: Eggs, Grade A, Large.” Last, change the units to “Index (Scale value to 100 for chosen date),” enter “2020-01-01,“ and click on “Copy to all.”

Suggested by George Fortier and Diego Mendez-Carbajo.

FRED recently added more data from the Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS). The survey, conducted by the Board of Governors, is currently sent to 124 domestic banks and US branches and agencies of foreign banks. The senior loan officers at those organizations answer a series of questions about their opinions on current lending practices. This qualitative information is used by monetary policymakers to gauge credit market and banking conditions.

The FRED graph above shows the fraction of domestic banks that reported having tightened their lending standards minus the fraction of banks that reported having eased their lending standards on commercial loans to small firms and to large and middle-market firms. The graph shows data collected from all the surveyed domestic banks and those with large amounts of capital. When the data series is above the zero line, the majority of the surveyed banks are restricting lending; when it is below the zero line, the majority of the surveyed banks are easing lending.

The data show easier lending conditions during economic expansions, which are the time periods between contractions in economic activity (known as recessions, which shaded areas in the FRED graph). The data also show markedly tighter lending standards ahead of and during recessions. Why do loan officers’ perceptions about banking conditions change with the phases of the business cycle?

Research by Chen, Higgings, and Zha studied the relationship between perceived lending standards and uncertainty about the macroeconomic outlook: Uncertainty during recessions makes lending riskier and makes lenders more cautious. Earlier research by Maximiliano Dvorkin and Hannah Shell tapped into the SLOOS data to document the relationship between lending and borrowing perceptions and changes in actual bank lending during the 2001 and the 2007-2009 recessions, showing a direct correlation between opinions and actual loan growth.

How this graph was created: Search FRED for “Net Percentage of Domestic Banks Tightening Standards for Commercial and Industrial Loans to Large and Middle-Market Firms.” Next, click the “Edit Graph” button and use the “Add Line” tab to add “Net Percentage of Domestic Banks Tightening Standards for Commercial and Industrial Loans to Small Firms.” Repeat the last step to add the similarly named data series from large domestic banks.

Suggested by Diego Mendez-Carbajo.