Saturday, June 2, 2007

St. Louis Fed - National Economic Trends - June 2007

The newest edition of the always excellent National Economic Trends is available today from the St. Louis Fed.

Here are a sampling of the charts that caught my eye. Click for larger size version.

From their engaging cover article, this first chart shows the percentage of the population age 55 or over engaged in part time employment. The upward trend for women is particularly clear. The article discusses possible causes and notes areas for follow-up investigation.

This next chart shows trends in national income as a percentage of GDP.

Corporate profits
weighs in at almost 14% of GDP and is close to the recently set 25 year highs. This is approximately double where it was in 1982.

Proprietor's Income registers at almost 9% of and it also is close to its 25 year highs. This is almost 50% higher than it was in 1982.

Compensation at a little over 64% of GDP is close to its 25 year lows. This is down approximately 3% from the 67% level of 1982.

The remaining National Income components (not shown) must by deduction be down net 7% from about 20% to 13%.

This third chart shows pretty clearly that the rise in corporate profits before tax is directly reflected in the rise in after tax profits as a percentage of GDP. After tax profits have more than doubled since 1982 from 4% to over 8%.

The fourth chart shows that the current account balance is close to its 25 year low at approximately 6% of GDP. Note the striking and steady downward trend since 1991.

And this final chart is noteworthy for the clarity with which it shows the rise of debt service payments to approximately 14.5% of personal income - close to the highest levels in 25 years. The steady upward trend since 1992 is also clearly visible.


1. As I mentioned in previous posts, one of the reasons that I value the St. Louis Fed's monthly National Economic Trends report is their use of long term trends. These help put the current behavior into perspective. The charts I have selected offer a glimpse at how a 25 year trajectory adds understanding to the most recent behavior.

2. That's not to say that their monthly report couldn't be improved. Here's my short list of suggestions on just how that might be done.

  • Show all selected factors using the same long term 25 year time frame trend chart as the default setting and template.
  • Show each factor on its own before combining it with other factors in a dual chart. The dual chart approach while extremely helpful for showing the possible relationship between a set of factors and simplifying comparison sometimes obscures the underlying trend in some of the factors due to the Y axis scaling used.
  • For the single charts created for each important factor, consider using MIN-MAX scaling for the Y axis rather than zero based scaling as the default. This is not correct in every instance but it often proves useful in helping make the trend patterns easier to read and understand.
  • Add at least some minimum commentary (could be 25 words or less) with 20% of each month's set of charts. Add comments for the charts that the St Louis Fed considers to be the most interesting and which have some interesting pattern to observe. E.g. follow the example we have set with the selected charts above. A picture is worth a thousand words, but not every important nuance seen by the expert creators of these charts will register immediately with every viewer, especially to non-expert viewers.
  • Make it easy to download a cross-tabulated table of all the data contained in all the charts for further examination by interested parties.

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