The FRED Blog often discusses the regular economic ups and downs that occur over the course of a year (eg, fruit and house prices). Today, we look at some big changes in the seasonal pattern of electricity and gas production.
The data are from the Board of Governors of the Federal Reserve System—specifically, the Industrial Production and Capacity Utilization (G.17) survey—which show the quarterly changes in the industrial production of electricity and gas utilities.*
The FRED graph above shows electricity and gas production from 2000 to 2020, which peaks twice per year: in winter (first quarter) and summer (third quarter). For most of these 20 years, the winter and summer peaks have been very similar in value. But that has not always been the case.
Traveling back in time with FRED, we can see the same quarterly percent changes in electricity and gas production for 1939-1960. Notice how little variation there was in production between 1939 and the end of 1946. Heavier reliance on coal for heating and the military production effort during WWII can explain this steady pattern in the data.
In the first decade after WWII, winter was the peak annual season for producing electricity and gas, with no spikes in production during the summer (third quarter). But the increase in the use of air conditioning by businesses and households changed things: Summer soon became the second annual peak for utility production that we see today.
The FRED Blog team hopes you are safely enjoying the end of summer, perhaps from the comfort of your temperature-controlled home or office. We thank you for including our blog in your summer reading and hope you enjoy it year-round.
How this graph was created: Search for and select “Industrial Production: Electric and Gas Utilities, Not Seasonally Adjusted, (IPG2211A2N).” From the “Edit Graph” panel, customize Line 1 by searching for and adding “Industrial Production: Electric and Gas Utilities, Seasonally Adjusted, (IPUTIL).” Next, type the formula ((a-b)/b)*100 and click “Apply.” Use the “Format” tab to select “Mark type: Diamond.” To travel back in time with FRED, adjust the dates of the graph.
*Btw, we use the formula ((Non-seasonally adjusted production – Seasonally adjusted production) / Seasonally adjusted production) x 100 to show by how much the production of electricity and gas utilities changes each quarter relative to its seasonally adjusted value. We multiply that ratio by 100 to show the value of those changes as a percent.
Suggested by Diego Mendez-Carbajo.