Chapter 7 Economic Data Sources

7.1 Types of Indicators

In the fields of economics and finance, various types of indicators provide valuable insights into the state and trajectory of economies and markets. These indicators range from macroeconomic measures that reflect the overall performance of an economy, to sentiment indices that capture the mood of investors:

  • Macroeconomic Indicators: Macroeconomic indicators capture the overall performance and trends of an entire economy or a significant segment of it. These indicators include measures such as GDP, inflation rates, interest rates, national income, employment levels, and government debt. Macroeconomic indicators provide policymakers, analysts, and stakeholders with a broad understanding of the health and stability of an economy, enabling them to make informed decisions and formulate effective policies.

  • Microeconomic Indicators: Microeconomic indicators focus on specific entities within the economy, such as individual firms, industries, or households. They provide insights into micro-level economic phenomena, such as market shares, production levels, consumer spending patterns, cost structures, and individual income levels. Microeconomic indicators help analyze the performance and dynamics of individual economic agents such as firms and consumers.

  • Market Indicators: Market indicators track the movements of various types of market-based measures, such as equity prices, bond prices, commodity prices, and indices like the S&P 500 or FTSE 100. These indicators provide insights into the dynamics and sentiments prevailing in financial markets and the economy as a whole. Commodity prices, as an example, can signal trends in global economic health and are especially critical for countries heavily dependent on commodity exports or imports.

  • Sentiment Indices: Sentiment indices reflect the overall attitude of investors towards a particular market or economy. These indices, which can be based on surveys or derived from market data, provide insights into the mood of investors and their expectations for the future. Examples include the Consumer Confidence Index, the Investor Sentiment Index, and the Fear & Greed Index. By capturing the “mood” of the market, sentiment indices can help predict market trends and identify potential turning points.

  • Financial Indicators: Financial indicators revolve around the functioning, stability, and performance of financial systems and markets. These indicators include measures such as stock market indices, exchange rates, bond yields, credit ratings, bank lending rates, and financial market volatility indices. They are crucial in assessing the strength and resilience of financial systems, identifying potential risks, and monitoring the effectiveness of monetary and regulatory policies. While indicators related to other non-financial industries, such as the production output of the manufacturing sector, typically fall under microeconomic indicators, financial indicators often overlap with macroeconomic indicators because they reflect conditions that affect all industries. That’s because all sectors depend on the financial market for lending, borrowing, and liquidity.

  • Demographic Indicators: Demographic indicators focus on population characteristics and dynamics. They encompass measures such as population size, age distribution, fertility rates, life expectancy, migration patterns, and labor force participation rates. Demographic indicators provide valuable insights into population trends, labor market dynamics, social challenges, and the potential impact on economic growth and development.

  • Environmental Indicators: Environmental indicators highlight the relationship between economic activities and the environment. They encompass measures such as greenhouse gas emissions, energy consumption, water usage, waste generation, and natural resource depletion. Environmental indicators help assess the sustainability of economic development, the impact of industrial processes, and the potential risks posed by environmental degradation.

  • Social Indicators: Social indicators focus on the well-being and quality of life of individuals within an economy. They encompass measures such as poverty rates, education levels, healthcare access, income inequality, and social mobility. Social indicators provide insights into the distribution of resources, social cohesion, and the effectiveness of social policies.

By understanding these indicators and how they interact, analysts, policymakers, and investors can make informed decisions and predictions.

7.2 Data Source

This chapter provides an overview of the primary U.S. institutions that either collect economic data (data sources) or compile and disseminate data from various sources (data providers). Each institution’s key datasets are also detailed.

7.2.1 Data Supplier vs. Distributor

Data suppliers:

  • Bureau of Economic Analysis (BEA)
  • U.S. Census Bureau
  • Bureau of Labor Statistics (BLS)
  • Federal Reserve Board of Governors
  • U.S. Department of the Treasury
  • Financial Market Exchanges

Data distributors:

  • Federal Reserve Economic Data (FRED)
  • U.S. Department of Agriculture Economic Research Service (ERS)
  • Bloomberg
  • Yahoo Finance

7.2.2 Bureau of Economic Analysis (BEA)

The Bureau of Economic Analysis (BEA) is part of the U.S. Department of Commerce and is primarily responsible for providing comprehensive and extensive economic statistics. Key reports include:

  • Gross Domestic Product (GDP)
  • Personal Income and Outlays
  • Corporate Profits
  • U.S. International Trade in Goods and Services

You can access BEA data in R using the bea.R package.

# install.packages("bea.R")
library(bea.R)
# Get GDP data
gdp <- getBEA("NIPA", "T10101", year = 2020)

7.2.3 U.S. Census Bureau

The U.S. Census Bureau collects demographic, social, and economic data. This information, which includes the decennial census, informs everything from legislative representation to public policy decisions. Key data includes:

  • Population and Housing Census
  • American Community Survey
  • Economic Census
  • Annual Surveys of Manufacturers

Census data can be accessed with the censusapi package in R.

# install.packages("censusapi")
library(censusapi)
# Get population data
pop <- getCensus(name = "sf1", vintage = 2010, vars = "P0010001", region = "state:*")

7.2.4 Bureau of Labor Statistics (BLS)

The Bureau of Labor Statistics is the principal federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy. Key data includes:

  • Employment Situation
  • Consumer Price Index
  • Producer Price Index
  • Real Earnings

BLS data can be accessed using the blscrapeR package.

# install.packages("blscrapeR")
library(blscrapeR)
# Get unemployment rate
unemp <- get_bls_county("unemployment rate", startyear = 2020, endyear = 2021)

7.2.5 Federal Reserve Board of Governors

The Federal Reserve Board of Governors provides data on the functions, operations, and structure of the Federal Reserve System. Key data includes:

  • Interest Rates
  • Monetary Aggregates
  • Exchange Rates
  • Industrial Production and Capacity Utilization

Federal Reserve data is best accessed through the Federal Reserve Economic Data (FRED) using the fredr package.

# install.packages("fredr")
library(fredr)
# Get interest rates
ir <- fredr(series_id = "GS10")

7.2.6 U.S. Department of the Treasury

The U.S. Department of the Treasury collects data related to the U.S. government’s finances and debt. Key data includes:

  • Daily Treasury Yield Curve Rates
  • Treasury Auctions
  • U.S. International Reserve Position
  • The Monthly Treasury Statement (receipts and outlays of the federal government)

Data can be directly downloaded from the U.S. Treasury website.

# Get daily yield curve rates
rates <- read.csv("https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Datasets/yield.csv")

7.2.7 Financial Market Exchanges

Exchanges such as the New York Stock Exchange (NYSE), NASDAQ, and Chicago Mercantile Exchange (CME) provide extensive data on financial securities. Key data includes:

  • Equity prices
  • Trading volumes
  • Derivatives data (futures and options)
  • Index values

Financial market data from various exchanges can be accessed using the quantmod package.

# install.packages("quantmod")
library(quantmod)
# Get NYSE data
getSymbols("AAPL", src = "yahoo")

7.2.8 Federal Reserve Economic Data (FRED)

FRED, maintained by the Federal Reserve Bank of St. Louis, offers a wealth of economic data from multiple sources in an easily accessible format. It includes but is not limited to:

  • Interest Rates (sourced from Federal Reserve)
  • Unemployment Rate (sourced from BLS)
  • Consumer Price Index (CPI) (sourced from BLS)
  • Money Stock Measures (sourced from Federal Reserve)

Data from FRED can be accessed using the fredr package.

# install.packages("fredr")
library(fredr)
# Get CPI
cpi <- fredr(series_id = "CPIAUCSL")

7.2.9 U.S. Department of Agriculture Economic Research Service (ERS)

The ERS is a primary source of economic information and research in the field of agriculture. Key data includes:

  • Agricultural Outlook
  • Crop and Livestock Production
  • Food Prices, Expenditures, and Establishments
  • International Agricultural Trade

Data from ERS can be directly downloaded from the ERS website.

# Get corn prices
corn_prices <- read.csv("https://www.ers.usda.gov/webdocs/DataFiles/48747/CornYearbook.xlsx?v=9149.8")

7.2.10 Bloomberg

Bloomberg provides financial software tools such as an analytics and equity trading platform, data services, and news to financial companies and organizations. Key data includes:

  • Stock Market Data
  • Economic Indicators
  • Commodities Prices
  • Currency Exchange Rates

Bloomberg provides a dedicated R package, RBloomberg, for Bloomberg data but requires a Bloomberg license and installation of Bloomberg software.

# The RBloomberg package is not available on CRAN. To use it, Bloomberg Terminal must be installed.

7.2.11 Yahoo Finance

Yahoo Finance is a media property that provides financial news, data and commentary including stock quotes, press releases, financial reports, and original content. Key data includes:

  • Stock Quotes
  • Market Trends
  • Financial News
  • Economic Calendar

Data from Yahoo Finance can be accessed using the quantmod package.

# install.packages("quantmod")
library(quantmod)
# Get Yahoo stock price
getSymbols("AAPL", src = "yahoo")

7.2.12 Conclusion

The data collected and provided by these institutions enable a robust understanding of the U.S. economy’s state and trajectory. This information shapes both public and private sector decision-making, affecting everything from Federal Reserve monetary policy to individual investment decisions.