Federal Reserve Economic Data

The more an economy trades with the rest of the world, the more open it is. Another way to put it: The more integrated an economy is in the world economy, the more open it is. So how do you measure openness? One way is to look at the ratio of imports plus exports to GDP.

By the way, the size of the economy matters. The U.S. is a large and well-diversified economy, so it doesn’t need to trade that much. The Bahamas are much smaller and much less diversified, and so it needs to trade more.

The FRED graph above shows what our measure of openness looks like for the three North American trading partners: Canada in blue, Mexico in green, and the U.S. in red. The vertical lines correspond to the Canada-U.S. free trade agreement in 1989 and NAFTA in 1994.

For a more nuanced (and complicated) graph, we could examine trade  among just these three countries and not their trade with the entire world. But looking at our particular measure here and considering our assertions above, it’s not surprising that the openness of the U.S. economy is lower than that of its neighbors. We also see that there’s a general trend of increasing openness, which we can associate with the general trend of globalization more than the impact of any particular trade agreements.

How this graph was created: Search FRED for “Canada exports” and take the nominal measure. From the “Edit Graph” panel, add the series for Canadian imports and GDP and apply formula (a+b)/c*100 (to get percentages). From the “Add Line” tab, repeat for the U.S. and Mexico. For the horizontal lines, use the “Add Line” tab again, but this time add 2 “user-defined” lines: the first with values 0.1 and 89.9 in 1989-01-01 and the second in 1994-01-01.

Suggested by Christian Zimmermann.

Part of the “My favorite FRED graph” guest post series.

Today is Canada Day, a good opportunity to compare the U.S. with its neighbor to the north. In many ways, the Canadian and U.S. economies are similar, foremost from the fact that they’re so intertwined. But there are also some stark differences. One difference that’s received a good amount of attention is women in the labor force.

The FRED graph above tracks the labor participation rate of Canadian and American women. In both countries, it has increased since the 1960s, thanks to household technology and emancipation. In 1998, it stalled in the U.S. but it has continued to progress in Canada to this date. The gap between the two countries is now almost 9 percentage points, and it’s back to pre-pandemic levels in Canada while still lagging in the U.S.

What’s going on? We can speculate here about some institutional differences that would impact the willingness and ability of women to work. Canada has several provisions for job-protected parental leave and supporting children in the tax code, as well as substantial child care subsidies in some provinces. U.S. support for working families is more limited.

For more on this topic, see the work of Francine Blau and Lawrence Kahn as well as this report from Statistics Canada, which examines the trends in participation for Canadian and U.S. women.

How this graph was created: Search FRED for “activity rate female” and click on the Canadian series. From the “Edit Graph” panel, use the “Add Line” tab to search for and select the U.S. series. Finally, start the graph on 1995-01-01.

Suggested by Tammy Schirle.

In an earlier post, the FRED Blog compared economic activity during the COVID-19-induced downturn and recovery across the G-7 countries: the U.S., the U.K., Japan, Canada, France, Germany, and Italy. Today, we focus on the U.S. and compare activity during the 2020-2021 downturn and recovery with activity during past episodes.

The FRED graph above plots the value of quarterly real (i.e., adjusted for inflation) GDP during and after the five most recent economic recessions: 1981-1982, 1990-1991, 2001, 2007-2009, and 2020-2021 (red dashed line). The billions of dollars reported by the U.S. Bureau of Economic Analysis are plotted as a custom index. The index has a value of 100 at the start of each recession, which is marked as the zero “date” on the left-hand side of the graph. Each period to the right of that “date” represents one quarter afterward.

In the 2001 recession, real GDP did not decrease. But in all the other economic contractions, real GDP fell below its pre-recession level for several quarters. The other recessions took more than a year to bounce back; but one year after the onset of the COVID-19-induced recession, U.S. real GDP is already above its pre-recession value.

So, is this the fastest recovery in overall economic activity on record? Most likely, yes.

In a previous post, we used annual data to compare economic recoveries since 1937. But quarterly real GDP data aren’t available prior to 1947, so we can’t directly compare the episodes in the graph above with the 1937-1938 episode in the graph we produced a year ago. Still, a year after the 1937-1938 recession started, real GDP was 3.7% below its pre-recession value. And four quarters after the COVID-19-induced recession started, real GDP was already 0.4% above its pre-recession value.

If you follow the FRED Blog, you already know that over the past year different sectors of economic activity have expanded and contracted at different rates. Keep in touch with the blog and learn more about the shape of the ongoing recovery over the next few months.

How the graph was created: From a previous blog post: Search FRED for “real gross domestic product” and select the series with the ID “GDPC1.” Add the same series to the graph four more times. Next, change the units to “Index (Scale value to 100 for chosen date)” and use the expanded menu to select the date to which you’d like to index each series. From the U.S. recession menu, select these dates for the five series: 1981-07-01; 1990-07-01; 2001-03-01; 2007-12-01; and 2020-02-01, the start dates of the early 80s recession, early 90s recession, early 2000s recession, the Great Recession, and the COVID-19-induced recession (according to the NBER), respectively.
For each series, check the “Display integer periods” box. The x-axis will show integers as time periods instead of dates. The base period is shown as 0: Negative numbers represent periods (quarters, in this case) before the base period, and positive numbers represent periods after the base period. Change the start integer to 0, so the graph begins at the start of each recession. Change the end integer to 8, so the graph ends 8 quarters after each recession started. Finally, to use the same graph style shown here, select the circle option under “Mark Type.”

Suggested by Diego Mendez-Carbajo.