Tag: Economics

  • Economic Indicators in the States

    Economic Indicators in the States

    A visualization of coincident economic indicators for the states. (more…)

  • Consumer Price Index, November 2023

    Consumer Price Index, November 2023

    Looking at inflation calculations in a different way.

    These charts show the Consumer Price Index (the primary measure of changes in prices and inflation) compounded in three ways. The usual number reported about inflation is the year-over-year change in CPI. Example 1 shows this value mostly around two percent from 2000 through 2021, with a few excursions higher and lower.

    When the rate is steady, this makes sense. Recently, though, the rate has been changing, with a big swing up, and then down.

    This means the year-over-year change — the usual measure of the inflation rate — hides some information that is useful.

    Today, Bureau of Labor Statistics, part of the United States Department of Labor, released CPI numbers for October 2023:

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in November on a seasonally adjusted basis, after being unchanged in October, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.1 percent before seasonal adjustment.

    BLS reported two “inflation rates,” the monthly change of 0.1 percent, and the year-over-year change of 3.1 percent. Which is most meaningful?

    Both hold meaning, but the year-over-year measure is based, in part, on events that happened up to one year ago. The monthly change considers just the most recent month. To cast the monthly rate in a form compatible with the scale of the annual rate, we can annualize the monthly rate. That is, what would the year-over-year inflation rate be if the current monthly change continued (compounded) for a year?

    The two charts below show this. Chart 4a shows the year-over-year change, along with quarter-over-quarter change and month-over-month change. The year-over-year value is 3.1 percent, as reported by BLS.

    Chart 4b shows the month-over-month change expressed as a compound annual rate. It is, for this month, zero (when rounded), as reported by BLS. This is what the year-over-year inflation rate would be if the current value continued for another 11 months. This value is now 1.17 percent. If we extrapolated the change during the most recent quarter to the coming year, the value is 1.62 percent.

    Of course, we don’t know what will happen in the future, so this annualized rate is only a crude projection, perhaps even a fantasy. Further, since the month-over-month price change varies substantially, the corresponding compounded annual rate does, too. This is easily seen in chart 4b in the monthly series. The quarterly series is less volatile.

    For this month, using the monthly compounded rate is advantageous to the current administration, as it can say (with appropriate caveats) inflation is 1.2 percent instead of 3.1 percent. But in the months in the chart where the monthly line is above the annual line, the reverse holds. In August, for example, the year-over-year rate was 3.7 percent, but the month-over-month rate, if annualized, was 7.8 percent.

  • Gas Prices in Days Past

    Gas Prices in Days Past

    A meme on Facebook shows a photograph of gasoline prices from a past era with the caption: “Gas prices like this would be a nice gift.” (more…)

  • Kansas GDP, Second Quarter of 2023

    In the second quarter of 2023, the Kansas economy grew at the annual rate of 7.4 percent. Real Gross Domestic Product rose in 44 states, with Kansas ranking second. (more…)

  • Business Formation in States

    Business Formation in States

    An interactive visualization of business formation in the states.

    Business Formation Statistics (BFS) are a standard data product of the U.S. Census Bureau developed at the Center for Economic Studies in research collaboration with economists affiliated with Board of Governors of the Federal Reserve System, Federal Reserve Bank of Atlanta, University of Maryland, and University of Notre Dame. BFS provide timely and high frequency information on new business applications and formations in the United States. The program’s page is here.

    While the Census Bureau provides tables and visualizations, I’ve collected the data and present it as an interactive visualization with different views.

    For monthly figures, data grouped by industry is available only for the nation, not individual states. So in this visualization, I include only the value for all industry sectors in total, not for individual industry sectors.

    These are the meanings of the data series, with more details at Business Formation Statistics — About the Data:

    • Business Applications (BA), an application for an Employer Identification Number (EIN).
    • Actual and projected business formations originating from business applications based on the record of first payroll tax liability for an EIN.
    • Delay in business formation as indicated by the average duration between business application and business formation.

    The Business Application Series contains four filtered series of EIN applications:

    • Business Applications (BA): The core business applications series corresponds to a subset of all EIN applications. BA includes all applications for an EIN except for a few types of organizations: certain financial filings, applications with no state-county geocodes, applications in farming or public administration that have low transition rates, and applications in certain industries (e.g. private households, civic and social organizations).
    • High-Propensity Business Applications (HBA): A subset of BA that contains all applications with a high propensity of turning into a business with payroll, based on various factors.
    • Business Applications with Planned Wages (WBA): A subset of HBA that contains all applications that indicate a planned date for paying wages.
    • Business Applications from Corporations (CBA): A subset of HBA that contains all applications from a corporation or a personal service corporation.

    The Business Formation Series measures new employer firm births, the point when an application is realized and a business begins to operate. The Business Formations Series is available in two subsets, measuring from application to realizing the business paying wages within four and eight quarters.

    • Business Formations within 4 Quarters (BF4Q): The number of employer businesses originating from Business Applications within four quarters from the month of application.
    • Projected Business Formations within 4 Quarters (PBF4Q): The projected number of employer businesses originating from Business Applications within four quarters from the month of application.
    • Spliced Business Formations within 4 Quarters (SBF4Q): Combines BF4Q and PBF4Q to provide the entire time series for the actual and projected business formations within four quarters.

    These data items repeat for periods of eight quarters.

    I have an interactive visualization of this data. Click here.

    A set of static charts follows. Click charts for larger versions.

  • Business Formation in Kansas

    Business Formation in Kansas

    For both business applications and business formations, Kansas does better than some states, but lags many states and the nation. (more…)

  • Wichita Employment Situation, October 2023

    Wichita Employment Situation, October 2023

    For the Wichita metropolitan area in October 2023, major employment indicators declined from the prior month. Wichita performs poorly compared to its peers. (more…)

  • Large County Employment, Second Quarter 2023

    Large County Employment, Second Quarter 2023

    Employment in large counties, including Sedgwick County and others of interest. (more…)

  • Kansas Employment Situation, October 2023

    Kansas Employment Situation, October 2023

    In Kansas for October 2023, the labor force was steady, the number of jobs rose, and the unemployment rate fell slightly when compared to the previous month. Over the year, Kansas is below the middle of the states in job growth. (more…)