Current Macroeconomic Data

Labor market

Unemployment rate

The natural rate of unemployment (also known as the NAIRU) is currently around 5%. When the unemployment rate falls below the NAIRU, businesses bid up wages, triggering inflation. Note that that the unemployment rate falls below the NAIRU prior to every recession.

The Nashville MSA typically has a lower unemployment rate than the nation as a whole.

Labor Force Participation rate

The labor force participation rate (LFPR) equals labor force divided by population. Female LFPR grew steadily after WWII, then plateaued in the noughts. Male LFPR mostly declined, due to an increasing number of males in retirement. Especially teenagers experienced a reduction in LFPR during the 21st century. Note the conspicuous reduction in LFPR during and following the Great Recession. Much of this is due to retirement of Baby Boomers; some portion is due to discouraged job-seekers dropping out of the labor force.

Federal minimum wage

The minimum wage was first established in 1938. Its real value (adjusted for consumer prices) has changed a great deal over the years. Note that the real minimum wage has often been higher than it is today.

Median weekly real earnings

The chart compares adult men with adult women. Women have experienced considerable gains since 1980, while men have lower real income today than in 1980. As a result, there has been a narrowing of the male-female wage gap, but men still earn much more.

Commodity Prices

A commodity is a standardized product. Oil, for example, is a standardized product, where one barrel of oil of a certain grade is identical to another barrel of oil of a certain grade. The fact that the product is standardized allows traders to buy and sell these without ever actually looking at the product.

Crude oil prices

There are two main prices used for oil: one for the US Great Plains, and the other for the European North Sea. Occasionally, when production is high in the Great Plains, bottlenecks make transportation expensive for buyers who wish to move the oil to the rest of the country. On those occasions, US oil prices fall below the European, to compensate for the increased cost of transportation.

Gasoline prices

Gasoline prices track oil prices. Note the post-Katrina spike in gasoline prices (September 2005) due to the hurricane smashing Gulf coast refineries.

Food prices

The food of low-income people consists mainly of cheap carbohydrates. Maize, wheat, and rice are the three most important sources of carbohydrates for most parts of the world. High grain prices can lead to suffering and subsequent popular unrest, so having low grain prices is important.

Gold prices

Gold prices typically rise during times of crisis and uncertainty, when investors perceive gold as a relatively safe haven.

Consumer vs producer prices (since 1913)

The most popular way to measure inflation in consumer goods prices is based on the Consumer Price Index. The Producer Price Index provides a measure of inflation for producer goods. Both of these series have been compiled each month since January 1913. Note the severe deflation occuring during the Great Depression.

Consumer vs producer prices (past 20 years)

Note that producer prices are by far the most volatile, and that they tend to fall sharply during and after recessions (the darker bars). They also appear to lead consumer prices.

Interest rates

Interest rates spiked sharply in the early 1980s, due to heavy government borrowing, high inflation, and the Feds (successful) efforts to reduce that inflation.

Baa bond yields vs Aaa bond yields

Here one can see how yields are higher on bonds with higher default risk (Baa is riskier than Aaa).

Mortgage rates

Mortgage rates are just beginning to climb up from historic lows. Note the maturity risk premium built into the 30 year mortgage versus the 15 year.

Loan delinquency rates

The lowest delinquency rates in the early 1990s were for residential mortgages; beginning with the Great Recession, they had become the highest. Currently, delinquency rates are comfortably low, especially for commercial loans.

Student loan debt as percent of GDP

Wow. Just wow.

National Income and Product Accounts

Potential GDP

Potential GDP growth equals the growth rate of the population plus the growth rate of labor productivity.

Expenditure components of GDP

AD=C+I+G+(X_M). Consumption makes up almost 70% of GDP. Net exports have been negative since the early 1990s.

Government expenditures vs Government transfer payments

Looking only at G (government expenditures) leads to an underestimate of government role in the economomy since transfer payments hide mostly in C (consumption expenditures). The figures are in 2012 dollars.

Compiled on 2020-08-26 by E. Anthon Eff