Federal Reserve Economic Data

Gasoline and gas-powered vehicles are complementary goods: They’re expected to be bought together. When all else is held constant, a change in the price of gasoline should have a predictable impact on the demand for cars and trucks—which, by extension, would change their price.

For example, when gasoline prices fall, it’s relatively cheaper to drive gas-powered vehicles. So, we’d expect their demand and price to rise. Today’s post looks into recent consumer price index data to see if that is in fact the story behind the numbers.

The FRED graph above shows the year-over-year percent growth rate in the monthly price of gasoline (blue bars), used cars and trucks (red bars), and new vehicles (green bars). We limited the time range to the past 54 months to observe how the COVID-19 pandemic impacted the relationship among these three sets of prices.

Here’s what we found:

• During most of 2020, the price of gasoline fell and the price of used cars rose. This is what would be expected.
• However, throughout most of 2021 and 2022, both gasoline prices and vehicle prices rose at a fast pace. Several factors can explain that. First, consumers traveled more frequently by road and bought relatively cheaper used cars. Second, car buying was boosted by federal consumer stimulus. Third, the Russian invasion of Ukraine reduced the global supply of oil and drove up gasoline prices.
• Between 2023 and the time of this writing, gasoline prices and used car prices both fell, while the price of new vehicles rose modestly. Why? New supply channels for fossil fuels lowered the price of gasoline, there was less consumer spending on goods considered non-essential, and higher interest rates on loans used to finance the purchase of new vehicles contributed to the change in vehicle prices.

So, although gasoline and gas-powered vehicles are complements, changes in their prices do not always follow a strictly inverse relationship. Other factors impacting the demand and supply of gasoline and vehicles can play bigger roles in the stories told by their numbers alone.

How this graph was created: Search FRED for and select “Consumer Price Index for All Urban Consumers: Gasoline (All Types) in U.S. City Average.” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Consumer Price Index for All Urban Consumers: New Vehicles in U.S. City Average” and “Consumer Price Index for All Urban Consumers: Used Cars and Trucks in U.S. City Average.” Next, use the “Edit Lines” tab to customize the data by selecting “Percent Change from Year Ago” and copy to all. Lastly, use the “Format” tab to change the graph type to “Bar.”

Suggested by Maxwell Bassin and Diego Mendez-Carbajo.

Two of the largest financial assets for US households are pensions and direct holdings of stocks.

Pension funds, such as IRAs and 401(k)s, tend to be less liquid, as they generally have restrictions on converting the assets to cash. Of course, they often include tax benefits and contributions from employers.

More direct participation in the stock market (either through direct holdings of corporate equity or through mutual funds) provides more liquidity, since the assets are easier to sell and convert quickly to cash.

In the FRED graph above, the blue line shows US households’ pension entitlements (including IRA and 401(k) holdings) as a share of their net worth; the red line shows their holdings of stocks (corporate equity plus mutual fund shares) as a share of their net worth.^*

• In the 1950s and 1960s, stock holdings exceeded pensions.
• In the 1970s, this relationship reversed and stock holdings remained consistently below pensions for most of the time.
• In the 1990s, stock holdings began steadily increasing and have exceeded pensions since about 2018.

This trend may be related to the rise of mutual funds and the decline in trading commissions, which would lower the transaction costs in holding stocks. More recently, financial technology such as app-based electronic trading platforms and micro-investing have made it even easier for households to participate in the stock market, which likely has also been contributing to the rise of stock holdings over pensions as households’ preferred financial asset.

^*The data also include the holdings of nonprofit organizations, but this is a small fraction relative to the household sector.

How this graph was created: Search FRED for and select “Households and Nonprofit Organizations; Pension Entitlements; Asset, Level, Millions of Dollars, Not Seasonally Adjusted (HNOPFAQ027S).” From the “Edit Graph” panel, use the “Add Line” tab to search for and select “Households and Nonprofit Organizations; Net Worth, Level, Billions of Dollars, Not Seasonally Adjusted (TNWBSHNO).” In the “Formula” field, type: (a/1000)/b and select “Apply” in order to adjust the units of the first series, which was in millions. Next, use the “Add Line” tab again to search for and select “Households and Nonprofit Organizations; Corporate Equities; Asset, Market Value Levels, Billions of Dollars, Not Seasonally Adjusted (HNOCEA).” From the “Edit Graph” panel, use the “Add Line” tab to search for and again select “Households and Nonprofit Organizations; Net Worth, Level, Billions of Dollars, Not Seasonally Adjusted (TNWBSHNO).” Then, also add “Households and Nonprofit Organizations; Mutual Fund Shares; Asset, Market Value Levels, Billions of Dollars, Not Seasonally Adjusted (HNOMFSA).” In the “Formula” field, type: (a+c)/b and select “Apply” Finally, adjust the time series to be from 1951-12-30 to 2024-01-01.

Suggested by Yu-Ting Chiang and Mick Dueholm.

The FRED Blog has discussed how patents for new processes, machines, products, designs, and even plants grant intellectual property rights to their inventors. They also generate income to the patent holders and reflect the scope of international innovation efforts. Today, we examine a related question: How much innovation is embodied in a new patent?

The FRED graph above shows the annual number of patents granted by the U.S. Patent and Trademark Office between 1992 and 2020. There are four types:

1. Utility patents (blue area): invention, discovery, or any new and useful improvement of a process, machine, manufactured article, or substance.
2. Design patents (red area): invention of a new, original ornamental design for an article of manufacture.
3. Plant patents (green area): invention or discovery and asexually reproducing of any distinct and new variety of plant.
4. Reissue patents (purple area): replacement of an original patent that was defective and couldn’t be corrected.

The graph plots those numbers as stacked areas to compare how frequently each type of patent is issued and to show their growth over time. Utility and design patents are the most frequently issued types of patents and make the numbers of plant and reissue patents very difficult to see.

Recent research by Aakash Kalyani at the St. Louis Fed examines the potential relationship between the number of patents issued and overall economic productivity gains in the US between 1930 and 2010. His analysis shows that the number of newly issued patents grew rapidly after 1980, but productivity did not grow rapidly. An earlier post highlighted this slowdown in recorded productivity growth.

Further analysis of patent information suggests that most patents did not embody the kind of substantial innovation that could boost productivity growth. In other words, the number of patents by itself does not tell the full story of innovation and its economic benefits.

For more about this and other research, visit the website of the Research Division of the Federal Reserve Bank of St Louis, which offers an array of economic analysis and expertise provided by our staff.

How this graph wase created: Search FRED for and select “U.S. Granted Patents: Utility Patents Originating in the United States.” In the “Edit Graph” panel, use the “Add Line” tab to search for and add “U.S. Granted Patents: Design Patents Originating in the United States.” Repeat this last step to add two more series: “U.S. Granted Patents: Plant Patents Originating in the United States” and “U.S. Granted Patents: Reissue Patents Originating in the United States.” Last, use the “Format” tab to select “Graph type: Area” and “Stacking: Normal.”

Suggested by Diego Mendez-Carbajo.