Federal Reserve Economic Data

US nonfarm payroll employment delivered a positive surprise in January 2024: The economy added 353,000 jobs that month—more than double the median forecast of 175,000 jobs. Another positive surprise was that past job growth reports were revised upward, showing additional signs of a strong labor market.

The ALFRED graph above shows monthly changes in nonfarm payroll employment: The red bars represent the data released last week, while the blue bars represent the data released in January, prior to the latest revisions. Data for the fourth quarter of 2023 were revised upward each month, with particularly notable gains in the December payroll, which was bumped up from 216,000 to 333,000. Strong gains in both December and January indicate positive labor market momentum to kick off 2024.

The data revisions throughout 2023 also contributed to faster employment growth than forecasted. Positive revisions occurred in nine of the twelve months of 2023. Revisions on net increased job gains by 359,000 over the course of the year, bringing the total number of jobs added to just over 3 million. Forecasters had expected employment to increase by only 1.7 million, according to the November 2022 Survey of Professional Forecasters.

While 2023 was a year of healthy job growth, it was considerably weaker than 2022, when 4.5 million jobs were added. The FRED graph below shows annual job gains for each year since January 2010. The employment level increased at such an aggressive rate in 2022 partly because the labor market was recovering the 9.2 million jobs lost in 2020. The trend of slowing annual growth is expected to continue throughout 2024, as the economy gradually returns to its longer-run trend growth.

For reference: From 2011 through 2019, the economy added on average 2.3 million jobs each year. The November 2023 Survey of Professional Forecasters reports an annual predicted growth of 1.4 million jobs in 2024.

How this graph was created: First graph: In ALFRED, search for “All Employees, Total Nonfarm” and selected the seasonally adjusted series with data until 2024. From the “Edit Graph” panel, use the “Edit Bar” tab to change the units to “Change, Thousands of Persons.” Change the selected dates above the graph to begin on January 1, 2023. Second graph: In FRED, search for and select “All Employees, Total Nonfarm,” again selecting the seasonally adjusted series. From the “Edit Graph” panel, use the “Edit Line” tab to change the units to “Change from Year Ago, Thousands of Persons.” On the same tab, change the frequency to “Annual” and then change the aggregation method to “End of Period.” Use the “Format” tab to change the graph type to “Bar.” Change the selected dates above the graph to begin on January 1, 2010.

Suggested by Charles Gascon and Joseph Martorana.

The FRED Blog has discussed the income and wealth boosts from graduating college (a.k.a. the college premium). This premium does seem to justify the expense of a college education, and today we discuss how to pay for it by using a 529 saving plan.

529 plans are named after the section of the federal tax code that rules their treatment. The FRED graph above shows data from the Board of Governors of the Federal Reserve System reporting the dollar value of savings held in two types of 529 plans:

• College saving plans (the blue area): These are purchased shares in mutual funds administered by states.
• Prepaid tuition plans (the red area): These are purchased tuition credits at designated educational institutions.

Households contribute to those two saving plans with disposable income (i.e., income after paying taxes). But, since 2001, tapping the college savings portion of the 529 plans to pay for educational expenses is tax-exempt. In other words, contributions are not tax-deductible but qualified withdrawals are tax-free. This feature has boosted the growth of college saving plans, which (at the time of this writing) amount to 94 cents of every dollar held in a 529 plan. Incentives matter!

To learn more about this topic and its coverage in the US Financial Accounts and Enhanced Financial Accounts, read this FEDS note.

How this graph wase created: Search the alphabetical list of FRED releases for “Z.1 Financial Accounts of the United States” and select “Table B.101. Balance Sheet of Households and Nonprofit Organizations.” Under the heading “Assets held in 529 college plans,” select the data series “College saving plans” and “Prepaid tuition plans.” Next, use the “Format” tab to change the graph type to “Area” and the stacking option to “Percent.”

Suggested by Diego Mendez-Carbajo.

Vehicle miles traveled (VMT) reflects the total distance traveled by cars and trucks during a given period. Prior to 2000, VMT in the US grew proportionally with real GDP, shown by the blue and red lines, respectively, in the FRED graph above. But this relationship appears to have weakened after 2000.

VMT statistics from the US Federal Highway Administration begin in 1970, and we give that year an index value of 100. Between then and 2005, VMT-per-capita also grew (shown by the green line), rising from about 450 monthly miles per person in 1970 to a high of about 840 monthly miles per person during 2003-2006. Since then, VMT-per-capita has stayed relatively stable, apart from a sharp decline during the COVID-19 pandemic. Over the same period, total VMT growth has declined, falling below real GDP growth.

So, how have vehicle emissions changed during this evolution in VMT? The purple line shows the growth of carbon emissions from the transportation sector relative to levels in 1970—again, with a starting index value of 100. Together, cars and trucks are responsible for the vast majority of carbon emission from the transportation sector—81% in 2021 (EPA, 2023a). While the share of electric vehicles is growing, most of the fleet is still combustion: For a conventional vehicle, emissions increase proportionally with driving volume. As a result, the growth in VMT been a main driver of the growth in transportation emissions since 1970.

However, transportation sector emissions have grown much more slowly than VMT growth alone might suggest, at a rate just slightly below that of VMT-per-capita. This has occurred, in part, because vehicle efficiency has improved. With technological innovations, conventional cars produced today tend to require less fuel and emit less carbon dioxide than cars of comparable weight and power produced five decades ago.

Average emissions efficiency of new cars produced is one way to measure changes in fleet efficiency over time: The average carbon dioxide (CO₂) emissions per mile for a new car was almost 700 grams in 1975, the first year data on average new car efficiency is available. By 2021, average CO₂ emissions per mile for a new car had fallen by about half, to 347 grams per mile. Most of those efficiency gains came during 1975-1985, when average new car emissions dropped sharply to just over 400 grams per mile, catalyzed in part by the consumer response to high gas prices. Emissions per mile declines are primarily due to these technological improvements in fuel efficiency.

Over the same period, the car market’s shift toward SUVs and trucks—which use more fuel per mile on average than smaller vehicle types—acted as a countervailing force, limiting the extent to which vehicle emissions fell (EPA, 2022).

To the extent electric cars become more common, vehicle emissions and VMT will continue to uncouple; and further increases in VMT may be less closely associated with transportation sector emissions (EPA, 2022).

Recent emission standards set by the EPA—including those set in 2023—focus specifically on the levels of CO₂ emitted from vehicles (EPA, 2023b). Because there’s a lag between when standards for new car emissions are imposed and when those newer cars begin to dominate the fleet of vehicles overall, these newer standards do not yet show up on the FRED graph. But they may eventually lead to reductions in transportation emissions in the future.

How this graph was created: In FRED, search for and select the “Vehicle Miles Traveled” series. Use the “Edit Graph” panel to change the frequency of the series from monthly to annual using averaging as the aggregation method. With the “Add Line” tab, search for and select “Real Gross Domestic Product.” Use the “Add Line” tab again to search for and select “Vehicle Miles Traveled,” change the frequency from monthly to annual using averaging as the aggregation method. Within the same tab, search for and add the series “Population” and apply formula a/b. Use the “Add Line” tab again to search for and select “Transportation Carbon Dioxide Emissions, All Fuels for the United States.” Under the units option, select “Index” with date 1970-01-01 and click “Copy to all.” Use the date selector above your graph to choose 1970-01-01 as the start date.

Suggested by Marie Hogan and Mike Owyang.