Federal Reserve Economic Data

Immediately after the Federal Reserve began increasing interest rates in March 2022, construction activity in the single-family housing market began to slow. Homebuilders had been facing higher costs and construction delays due to supply chain disruptions. In many cases prospective buyers of these new homes had agreed to purchase in the preceding months; but as mortgage rates rose, the effective cost of purchasing these homes rose, too, lowering their demand. Faced with weaker demand and a backlog of projects to complete, single-family homebuilders started fewer new homes and focused on completing existing projects.

Single-family housing starts dropped 32% between March and December of 2022, eventually leading to a decline in overall homes under construction. The FRED graph above shows the monthly data for single-family units under construction in red. You can see that, by mid-spring 2022, the number of single-family houses under construction had begun its fastest downward trend since the 2006-2009 period, falling at an average rate of roughly 9,800 units per month between May 2022 and September 2023. It’s worth noting that the single-family housing market hasn’t reacted so strongly to previous federal funds rate increases. Between November 2015 and January 2019, single-family units under construction continued to increase in the face of rate hikes, as it did between June 2004 and February 2006.

The story is different when we look at multi-family housing, shown in blue in the same FRED graph. The number of multi-family projects has mostly continued to climb over the past 16 months. Longer permitting and construction timelines in the multi-family space have kept the number of projects growing despite higher interest rates and costs. In fact, the number of multi-family projects under construction reached an all-time high in July 2023. The multi-family buildup has generally kept the total combined number of single- and multi-family units under construction stable around its own record-setting high of 1.7 million per month, as shown in the FRED graph below. It’s also worth noting that the single- and multi-family markets have not been so divergent in the past but were not always perfectly synchronized. When single-family units under construction embarked on its nearly 6-year slowdown in February 2006, multi-family units remained largely flat until July 2008 and began to bounce back almost a year before single-family units.

Trends have shown some change, though, for both multi-family and single-family construction. While the number of multi-family projects under construction in September 2023 remains about 10% higher than in September 2022, new multi-family projects started is more than 30% lower compared with the same time last year. This signals a slowdown in the number of multi-family projects under construction extending into 2024. But green shoots are beginning to sprout again in the single-family market, with housing starts picking up in recent months. (Starts are about 9% higher this September relative to one year ago.) This is welcome news for construction employment, which has so far proven resilient throughout the single-family slowdown, attributable to construction projects remaining historically elevated and evidence of a shortage of construction workers.

How this graph was created: Top graph: In FRED, search for and select “New Privately-Owned Housing Units Under Construction: Units in Buildings with 5 Units or More.” From the “Edit Graph” panel, use the “Add Line” tab to search and select “New Privately-Owned Housing Units Under Construction: Single-Family Units.” Bottom graph: In FRED, search for and select “New Privately-Owned Housing Units Under Construction: Total Units.”

Suggested by Charles Gascon and Joseph Martorana.

According to the Bureau of Labor Statistics, surveys are the backbone of the federal statistical community. Response rates for federal surveys have been declining for many years. In summer 2019, response rates to JOLTS (the Job Openings and Labor Turnover Survey) averaged 58%. In summer 2023, those rates averaged 32%. The BLS and other federal statistical agencies are tackling this problem by changing their methods of data collection so that they continue meeting data quality standards, but data from the private sector may also be a useful complement.

Today we compare job posting data from Indeed (privately sourced) with job openings data from JOLTS (government sourced). The graph above shows that there’s a very close relationship between these two data sources.

One advantage of looking to private-sector Indeed data is that they are published much more frequently. Job postings on Indeed are updated weekly, while the equivalent JOLTS series is updated monthly. With increased frequency of data collection, there’s a timelier release of those data. For example, at the time of this writing, job postings data from Indeed are available all the way up to November 2023, while the similar JOLTS series has data only up to September 2023.

One advantage of the JOLTS dataset is that it reports on employment, layoffs, and quits, with the intent of covering the entire economy, and thus a more accurate picture of the economy. There’s no equivalent in the Indeed dataset, which is limited to its own listings and a few other sources.

Complementing governmentally sourced data with related private-sector data can add to overall data credibility and trust, which is a major part of FRED’s mission.

How this graph was created: in FRED, search for and select the series “Job Postings on Indeed in the United States” (IHLIDXUS). From the Edit Graph panel, use the Edit Line option to set units to “Index Feb, 1 2020=100” and frequency to “Daily, 7-Day.” Use the Add Line option to add the “JTSJOL” series and set its units to a custom index and select the date for the index base to be 2020-02-01. Set date range to 2020-01-31 to present.

Suggested by Alexander Bick and Kevin Bloodworth.

The national economic accounts are the foundation for calculating, among other things, US gross domestic product. The US Bureau of Economic Analysis, which collects and releases GDP data, periodically updates these national economic accounts. On September 28, the BEA released its 2023 comprehensive (or benchmark) update.

Now, FRED has these new data. So, today we turn to Archival FRED (ALFRED) to compare these new data with the old data. The ALFRED graph above shows two different vintages of annual real GDP data between 2017 and 2022. The vintage dates included in the series names are associated with the dates of the comprehensive updates: The red bars represent data from the 2023 update, the latest available at the time of this writing; and the blue bars represent data from the previous comprehensive update, released in 2018.

There are relatively small differences in the annual growth rates of inflation-adjusted GDP between data vintages because comprehensive updates involve changes in the underlying methodology used to measure economic activity. As outlined in this BEA briefing, the latest update also synced the schedule for releasing national GDP and related industry and state statistics within the same timeframe. Lastly, the reference year for inflation adjustment and price measures has been updated to 2017 from 2012.

Additional information about the scope and impact of the 2023 comprehensive updates to the national, industry, and state economic accounts can be found here.

How this graph was created: Search ALFRED for “Real Gross Domestic Product.” By default, ALFRED shows a graph with two sets of bars: the most recent vintage and the prior vintage. Add additional vintages by using the “Add Line” tab and select the date of the desired vintage from the “or select a vintage” dropdown menu. Change the start date and the end date above the graph to customize the number of data points shown.

Suggested by Diego Mendez-Carbajo.