Federal Reserve Economic Data

State and local governments play an important role in the U.S. economy by providing residents with services such as public education, law enforcement, and road building and upkeep. These subnational governments pay for their services largely through taxes on property, sales, income, and corporate profits.

At the start of the pandemic, there was tremendous concern that subnational governments would receive less tax revenue (with the possible exception of property taxes) and be put in a very difficult position. If the federal government loses revenue, it can issue debt to cover the losses and continue operations; but state and local governments largely cannot. For example, nearly every U.S. state government is prohibited from financing ongoing expenses by borrowing.

The FRED graph above shows us what happened with state and local tax revenue during the pandemic by plotting four series from the U.S. Census Bureau’s Quarterly Summary of State and Local Tax Revenue survey: the national total of state and local government tax revenue and revenue specifically from property taxes, individual income taxes, and general sales and gross receipt taxes (three of the largest components).

The graph tracks revenue from the first quarter of 2009 through the second quarter of 2022.

• Before the pandemic, total revenue had been growing over time at a fairly steady rate.
• At the onset of the pandemic in 2020, total revenue fell sharply, consistent with the expectations described above: Second-quarter revenue fell nearly $64 billion below first-quarter revenue. But the losses didn’t persist.
• By the third quarter of 2020, total revenue had bounced back and surpassed first-quarter revenue.
• From this point on, total revenue has continued on a generally upward path.

There were two major reasons for the rebound: the brevity of the recession and the magnitude of the federal response.

The recession lasted just 2 months, as shown by the shaded area in the graph. The National Bureau of Economic Research Business Cycle Dating Committee, the unofficial arbiter of recessionary periods, established February 2020 and April 2020 as the start and end dates. Many observers had forecasted a much longer recession.

The federal response boosted subnational governments’ income and sales tax revenue. Many people lost their jobs in the second quarter and remained unemployed for a time afterward, but the federal government augmented regular state unemployment benefits with a $300 weekly add-on. In fact, many people were making more income while unemployed than they had made while they were working. Since unemployment benefits are taxable income, this federal response contributed to the boost in individual income tax revenue seen in the graph. Also, sales and gross receipt tax revenue increased after dropping in the second quarter, although this change is less dramatic. In part, this increase was likely related to payments to households legislated through the CARES Act, the Tax Relief Act of 2020, and the American Rescue Plan of 2021.

State and local government finances were further boosted by the injections of billions of dollars from the federal government. For example, in the second quarter of 2020, the CARES Act increased intergovernmental transfers by about $700 billion more than in the preceding quarter. See more data on federal transfers to subnational governments in this FRED blog post.

How this graph was created: Search FRED for “National Totals of State and Local Tax Revenue: T01 Property Taxes for the United States” and click on the entry to see the series in a FRED graph. Note that searching some suitable subset of those words, such as “national totals state local property,” will also bring up the relevant series. Next, click on the orange “Edit Graph” button just above the upper right corner of the FRED graph. From the dialogue window that opens, click on “ADD LINE.” From here, enter “national totals state local total taxes” into the keyword search box. Click on the entry that is returned to add the data series to the chart. After adding this data series, you will see both the total taxes and the property taxes series in the same graph. To finish creating the chart, repeat the step from the preceding paragraph two additional times: for individual income taxes and for sales and gross receipts taxes.

Suggested by Bill Dupor.

Industrial production of synthetic fertilizer is critical to agricultural output around the world, but a series of shocks have led to an unprecedented increase in fertilizer prices.

• Hurricane Ida disrupted chemical production on the U.S. Gulf Coast in September 2021.
• China began export inspections on fertilizer inputs in October 2021 and quotas on fertilizer exports in 2022, to protect domestic supply.
• Fertilizer shipments were affected by the same pandemic-related delays and shortages that have affected global trade generally.
• As pandemic-related shocks seemed to ease, the conflict in Ukraine led to a spike in natural gas prices in early 2022, which increased shortages of key fertilizer inputs.* Nitrogen fertilizer PPI reached an all-time high in April 2022.

European fertilizer production is still severely restricted, but the past few months have brought some slight relief for U.S. producers. Domestic natural gas prices have moderated somewhat, and a strong dollar has made imports cheaper, helping bring the nitrogen PPI down slightly from its all-time highs. Still, fertilizer prices remain extremely high by historical norms. To learn more about the topic, check out this recent Regional Economist article.

*Nitrogen-based fertilizer, the most common type of industrial fertilizer, is made by mixing natural gas and nitrogen to make ammonia in what’s known as the Haber process.

How this graph was created: Search FRED for “fertilizer PPI” and click on the series you want. Click on “Edit Graph,” open the “Add Line” tab, and search for “fertilizer import price.” Then, for both lines, set the units to 100 for 2022-02-01 and the graph to start on 2009-01-01.

Suggested by Nathan Jefferson.

The Federal Reserve Bank of Philadelphia has a new data sandbox for credit enthusiasts to dig into: the FR Y-14M program. These 75 new mortgage and credit card data series reflect the aggregated portfolio of the largest financial institutions in the U.S., offering novel insights into some of the largest credit portfolios in the market. Save this quarterly dataset to your FRED account for a trove of unique intelligence on credit cards, first-lien mortgages, first-lien home equity loans, consumer habits, credit quality, and percentile indicators.

The Philadelphia Fed also provides a report on the data: Insights: Large Bank Credit Card and Mortgage Report.

Mortgage data: The most recent report notes that large bank mortgage origination volumes were flat in the second quarter of 2022 after declining sharply in the prior quarter. This contrasts with 2021, which saw the largest annual volume of originations since 2012 accompanied by rapid house price increases.

The FRED graph above shows mortgage origination loan-to-values (LTVs), which are increasing to pre-pandemic levels, rising from 68% in the fourth quarter 2021 to 75% in the second quarter of 2022. As rising mortgage rates reduce refinance demand and as originations fall, purchase loans constitute a greater share of new originations, which has pushed LTVs higher.

Credit data: Credit card originations have fully recovered to historic norms, and higher credit limits are being made available to new accounts compared with a year ago. The second FRED graph shows credit card balances: Coupled with an overall increase in consumer spending, credit card balances rose 16% on a year-over-year basis in the second quarter of 2022, bouncing back from near pandemic lows in the second quarter of 2021. That was the fastest yearly card balance growth since the FR Y-14M data collection began in 2012 and far greater than the typical 4% annual growth from 2013 through 2019.

With stronger consumer spending, card utilization has also begun to recover, hitting 18.5% in the second quarter of 2022. Credit card delinquency rates have increased modestly over the past year, though rates remain near their lowest level in the past 10 years, with fewer than 1% of balances reaching 90 days past due.

Details behind this large bank dataset: The credit card data are largely reflective of the total U.S. credit card market, representing roughly 3/4 of total U.S. bank card balances. The mortgage data provide new information on large bank lending and represent roughly 1/10 of the U.S. residential mortgage market.

The respondent panel for this dataset comprises U.S. bank holding companies, U.S. intermediate holding companies of foreign banking organizations, and covered savings and loan holding companies with $100 billion or more in total consolidated assets. These institutions are required to report credit card or first-lien mortgage data if portfolio balances exceed $5 billion or are material relative to Tier 1 capital. Firms with over $100 billion in total consolidated assets that do not meet these thresholds may also voluntarily provide FR Y-14M data.

For more information, see the data methodology.

How these graphs were created: Search FRED for “large bank mortgage 50th percentile” and pick the first series. Click on “Edit Graph,” open the “Add Line” tab, and search for the second series. For the second graph, proceed similarly by searching for “large bank credit card balances.”

Suggested by Jeremy Cohn.