Sunday, August 27, 2006

Trend Watching with FRED - First Impressions

I have just started working with FRED and find it amazingly helpful and powerful and a cut above other economics related database engines out on the web that I have used in the past.

Here are some of my first observations and impressions.

a) I experienced quite high performance and rapid response time as I selected each option such as changing from 5 year view to 10 year view. I noticed consistently better response time than I have experienced with most other web db engines.

b) I loved how they had pulled trend series from many different sources and make them all available in one place. They currently are tracking over 3,000 different series from a dozen or more primary sources in a wide variety of categories.

C) the FRED graphing engine has a new feature which gives it the ability to plot a second series so it can be compared with the one you are looking at. The default option is to show these two series with a dual Y axis representation which often helps make relationships between two factors more visible. The option to plot both series on the same scale is also available and is sometimes preferable. The rapid response to shift between views makes features such as these even more valuable.

D) With a single mouse click, you can get the trend for the metric you have chosen updated for three different standard time frames of 5 years, 10 years, or max years. Similarly, you can switch between the raw data metric value and other representations such as Year over Year Percentage Change with a single click. If you click the two previous links, you will see the CPI raw data which is not very interesting and the YoY % which is much more reveailing. Sometimes these transformations reveal previously hidden and important detail. Coupled with the fast response these single click options proved very helpful at grasping both the big picture and rich detail of each factor examined. The general design of the FRED user interface provides many other options with single mouse click options. For me, this meant that it radically speeded up the time required for analysis and also improved understanding.

F) If you find a trend metric that you want to examine in more detail , FRED makes make it easy to view or download the raw data. I haven't done much with this feature yet, but it will surely prove valuable for future work.

G) the description of the each metric at the bottom of the html page is very helpful for gaining a basic understanding of unfamiliar metrics and pointing you back to the original source of the data and further documentation.

H) If you create a personal account with the St. Louis Fed, you gain the ability to create your own personalized data lists of your favorite metrics drawn from their collection of 3000+. This looks like it will prove to be a big time-saver going forward. I have only "played" with this so far, but I see this aiding my future interactions as it will let me quickly drill down to the metrics I have judged most important. The end result will be faster navigation with fewer many fewer key strokes.

K) Once you have a data list created, you can download all the data for the metrics on your list. A really handy feature of this capability is what FRED describes as "cross tabulation". If your list has many metrics that report on the same time frequency, all of these metrics will end up in a single spreadsheet page, making future work with this set of trends much simpler and saving huge amounts of time compared to the situation when each trend is downloaded separately as seems to be the (unfortunate) standard for other web db engines I have worked with.

So, bottom line, FRED looks like it is a top notch resource for anyone interested in digging beyond the Headline Numbers by watching a multi-dimensional set of trends change over time and trying to understand their meaning and importance.

I expect I will be using FRED as one of my primary sources in the coming months.

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