Federal Reserve Economic Data

The FRED® Blog

How staying at home in 2020 affected the transportation industry: Part 1

Profit losses

In 2020, millions of Americans suddenly altered their travel habits, canceled vacations, and worked and learned from home. Data from the Census Bureau’s most recent Quarterly Financial Report (QFR) can help identify some of the effects from these sweeping changes. And in this three-part series, the FRED Blog looks at how Americans’ stay-at-home measures affected profits for two industries:

  • transportation equipment manufacturing (NAICS 336), which includes
    • aerospace products and parts manufacturing (NAICS 3364) and
    • motor vehicles and parts manufacturing (NAICS 3361, 3362, 3363)
  • petroleum and coal products manufacturing (NAICS 324).

The FRED graph displays data on the net income or loss (after taxes) for the transportation equipment manufacturing industry. In the first quarter of 2020, transportation equipment manufacturing companies recorded after-tax profits of $4.1 billion, which was $13.7 billion lower than the first quarter of 2019 and their lowest reported quarterly profit in roughly a decade. From the first to second quarter of 2020, profits decreased $11.8 billion, leading to a $7.7 billion loss. The last time transportation equipment manufacturing companies reported a net loss was during the second quarter of 2009 (the final quarter of the Great Recession, shaded in the graph).

Some areas of the transportation equipment manufacturing industry earned profits during the second quarter of 2020. However, those gains were offset by losses in two sectors of that industry: –$3.2 billion for aerospace products and parts manufacturing and –$4.8 billion for motor vehicles and parts manufacturing.

The transportation equipment manufacturing industry overall earned $15.1 billion in profits in the second quarter of 2019. A year later, it lost $7.7 billion (a decline of $22.9 billion). To put that in perspective, during the Great Recession, the transportation equipment manufacturing industry sank by $34.5 billion between the fourth quarters of 2007 and 2008. It took a total of five quarters for the industry’s profits to rebound.

A quick historical recap: The Great Recession began in the first quarter of 2008, bottoming out in the fourth quarter that year. In the third quarter of 2009, the transportation equipment manufacturing industry began showing a profit for the first time since the recession began, and profits returned to pre-recession levels in the first quarter of 2010. Since then, the industry logged 41 consecutive quarters of profit, before the pandemic hit.

The latest QFR shows profit in the third quarter of 2020 crossed back into the positive, rising to $17.8 billion, highest profit since $18.9 billion in the third quarter of 2019.

Check back on December 14 for the next post in this series, which looks at the petroleum and coal products industry.

About the U.S. Census Bureau: The U.S. Census Bureau collects data from thousands of companies to create monthly, quarterly, and annual reports for U.S. policymakers. These reports are free to the public and provide critical insight into the U.S. economy. To view all the Census Bureau economic indicator reports, visit the Briefing Room.

How this graph was created: Search for and select “Quarterly Financial Report: U.S. Corporations: Transportation Equipment: Income (Loss) After Income Taxes.” To change the line color, use the choices in the “Edit Graph” panel’s “Format” tab.

Suggested by Brooks Hurry and John Darr from the U.S. Census Bureau.

View on FRED, series used in this post: QFR115TRAUSNO

A history of European exchange rates

Data during and after the Bretton Woods system

The Bretton Woods agreement, signed by 44 nations in 1944, established an international monetary system that

  • instituted the convertibility of the U.S. dollar to gold
  • set fixed exchange rates with respect to the dollar
  • and made the dollar the currency of reference.

The graph above shows the exchange rates for the United Kingdom, Germany, France, Italy, and Spain between 1950 and 2017 with respect to the U.S. dollar. (By the way, the data for the euro area countries are calculated in euros using the official conversion rate for the years before the euro.)

It’s easy to see that, during the Bretton Woods era (1950-1971), the exchange rates were fixed, with the exception of a few managed adjustments.

The dashed black line in 1971 marks the year President Nixon unilaterally terminated the convertibility of the U.S. dollar to gold, which signaled the decline of the Bretton Woods system. After the system ended in 1973, exchange rates became more volatile, but also started to converge, given European collaborative policies to prevent excessive variation in exchange rates.

As of 1995, countries planning to adopt the euro had to meet currency convergence criteria, which helped with the stabilization of their exchange rates. In the end, the graph shows the current euro/dollar exchange rate for these countries. Of course, the British pound has always retained its own distinct exchange rate.

How this graph was created: Search for and select “Exchange Rate (market+estimated) for United Kingdom.” From the “Edit Graph” menu, use the “Add Line” tab to search for other data series. To add the vertical line, refer to these instructions. The “Data start/end” of the vertical line is 1971-01-01.

Suggested by Praew Grittayaphong and Paulina Restrepo-Echavarria.

View on FRED, series used in this post: XRNCUSDEA618NRUG, XRNCUSESA618NRUG, XRNCUSFRA618NRUG, XRNCUSGBA618NRUG, XRNCUSITA618NRUG

COVID-19 and job posting trends

Labor market conditions often follow the movements of the business cycle: Demand for labor rises during an expansion and falls during a contraction. So it’s not surprising that the COVID-19 recession has had an impact on firms’ hiring decisions and job posting trends. What might be surprising, however, is how the pandemic has affected the availability of jobs at different income levels.

The FRED graph here shows the impact of the COVID-19 downturn on job postings: Specifically, it covers the indexed trends on Indeed.com for three different wage tiers. (A previous blog post has more information on these data, if you’re interested.)

Middle- and low-wage occupations saw steeper declines in job postings early in the pandemic, plunging by 41.6% and 40.4%, respectively. Job postings for high-wage occupations didn’t decline as much, but they also didn’t recover as quickly: As of November 6, high-wage job postings were 17.3% below the 2019 trend, compared with 8.5% below trend for low-wage occupations.

These differences in hiring trends suggest that policymakers should take heterogeneity in labor market dynamics into account as they try to foster employment opportunities in a post-pandemic recovery.

How this graph was created: Search for “job postings index” on FRED, and the series should be among the top choices. From the “Edit Graph” panel, use the “Add Line” tab to search for and select the other two series.

Suggested by Praew Grittayaphong and Paulina Restrepo-Echavarria.

View on FRED, series used in this post: IHLCHGHIGHUS, IHLCHGLOWUS, IHLCHGMIDDLEUS


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