St Louis Fed July 2007 National Economic Trends

The latest collection of charts from the St. Louis Fed highlighting National Economic Trends where they continue in their tradition of presenting both extended time periods and shorter intervals. This easy to download document is a good example of how it is possible to present high degrees of multi-dimensionality covering a wide range of the most important indicators, all in a single, easy to use, easy to read format.

Bridging Rep. Kingston and Michael O'Hanlon's Concerns

In the two previous posts, we have spoken to the concerns of Rep Kingston and Michael O'Hanlon as captured in the Sheryl Stolberg New York Times See You in September ... article.

To be successful in understanding what is happening in Iraq, we need to listen to both their voices.

A Sufficient Number of Factors. We need to pay heed to O'Hanlon and make sure we have looked at enough different factors.

Manageable Metrics. We have to hear Rep. Kingston's concern and worry about being overwhelmed with too much data or rendered ineffective by not having enough time by making whatever data we report on "Manageable" within the constraints of the time and resources that are available to us.

Eating our Cake. It is possible to meet both of these goals. We are not doing it today, but we are surrounded daily with visible proofs that equally difficult trending situations (see the St. Louis Fed Reserve FRED application as an example of what's possible) can be brought within our grasp and control by the judicious application of 21st century Trend Visualization methods.

Along the Way. Paying attention to our view of the best practices and principles of trend graphic excellence will provide the third ingredient that helps make our efforts in this arena more effective and more readily sharable with others. For a discussion of these, check out the Trend Visualization Principles displayed near the top of the right column of this blog or follow this link to trend principles for a review of some of our other thoughts on this subject.

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.


Commentary.

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.