Annual Report 2018 | Federal Reserve Bank of St. Louis
By Katrina Stierholz
U.S. agencies have been collecting economic data for well over a century.Rockoff, Hugh. “On the Controversies behind the Origins of the Federal Economic Statistics.” Journal of Economic Perspectives, Winter 2019, Vol. 33, No. 1, pp. 147-64. In 1961, Homer Jones, then research director of the St. Louis Fed, decided that economic data would be much more valuable if they were more broadly shared. He sent a memo (see below) that included three data tables to a few of his colleagues, asking if they thought them useful. The memo suggested that data could help measure the effects of monetary policy. And with that, the St. Louis Fed began its commitment to data access, which is now embodied by FRED.
FRED first launched in 1991 as a free dial-up bulletin board with 30 data series. Despite such modest origins, FRED was clearly meant to be a long-term investment in public service. Today, FRED is a database known worldwide for providing free access to over half a million economic and socioeconomic data series. It can be accessed whenever and wherever needed, from your laptop or smartphone.
FRED goes far beyond simply providing data: It combines data with a powerful mix of tools that help users understand, interact with, display and disseminate data. For instance, users can:
It’s an incredibly rich resource that the FRED team provides to help improve the quality of economic and financial research, education, public policy, and business decision-making. In essence, FRED helps users tell their data stories.
Government data are the backbone of FRED. Without the efforts of government agency employees, none of this work would be possible. And because government data have become vital for many constituencies—such as policymakers, businesses, nonprofits and the general public—access to those data is also vital.
On Jan. 14, 2019, a bill with broad bipartisan support was signed into law that requires “open government data assets to be published as machine-readable data” (the OPEN Government Data Act).The OPEN Government Data Act is Title II of a larger piece of legislation: the Foundations for Evidence-Based Policymaking Act of 2018. See https://www.congress.gov/bill/115th-congress/house-bill/4174/text. The goal of this law is to ensure that the public has useful and broad access to government data.
This goal is similar to the original intent of FRED and why the FRED team continues to invest in this robust digital data service: to help citizens and businesses access data more easily and thereby make informed decisions. (The monetary value of data for businesses is particularly well-documented.Hughes-Cromwick, Ellen; and Coronado, Julia. “The Value of US Government Data to US Business Decisions.” Journal of Economic Perspectives, Winter 2019, Vol. 33, No. 1, pp. 131-46. )
Having access to the many data series available in FRED is terrific—a single place to find and use data from so many sources is powerful and efficient. That said, finding data and making sense of the data are two different things. Today, to be truly informed, people need to effectively access, work with and interpret data to solve problems.Prado, Javier Calzada; and Marzal, Miguel Ángel. “Incorporating Data Literacy into Information Literacy Programs: Core Competencies and Contents.” Libri, June 2013, Vol. 63, No. 2, pp. 123-34.
If the public doesn’t have the necessary skills to make sense of the data, the promise of open-data initiatives will go unfulfilled. So, FRED also provides educational support and tools for those who do not have the skills or are developing them.
The world is awash in data, and some of the data show that many adults unfortunately do not understand basic mathematical concepts or have the skills to use data. For example, a March 2016 report found that the U.S. scored below the international average for numeracy, which is the ability to understand and work with numbers.Rampey, Bobby D.; Finnegan, Robert; Goodman, Madeline; Mohadjer, Leyla; Krenzke, Tom; Hogan, Jacquie; and Provasnik, Stephen. “Skills of U.S. Unemployed Young, and Older Adults in Sharper Focus: Results From the Program for the International Assessment of Adult Competencies (PIAAC), 2012/2014: First Look.” U.S. Department of Education, National Center for Education Statistics, March 2016. These concepts matter for personal financial literacy and decision-making. At the larger, societal level, lower scores have also correlated with low voting and volunteering rates, as shown in an April 2007 report.Kutner, Mark; Greenberg, Elizabeth; Jin, Ying; Boyle, Bridget; Hsu, Yung-chen; and Dunleavy, Eric. "Literacy in Everyday Life: Results from the 2003 National Assessment of Adult Literacy." U.S. Department of Education, National Center for Education Statistics, April 2007.
These measures all tie closely to the emerging field of data literacy, which is the ability to understand and use data.Frank, Mark; Walker, Johanna; Attard, Judie; and Tygel, Alan. “Data Literacy: What is it and how can we make it happen?” The Journal of Community Informatics, September 2016, Vol. 12, Issue 3, pp. 4-8. The ability to read a chart or data table, recognize basic mathematical principles (such as mean, median or growth rates) and discern the quality of the source and scope of the data is important for evaluating the value of the data as evidence for an argument or decision.
Educational groups have identified the importance of these skills and embedded them in their standards:
In short, educators nationwide recognize this type of literacy as vital to preparing students for life choices informed by their ability to understand data.
With FRED and the strong contributions from the St. Louis Fed’s Economic Education team, the Bank works to support the emerging field of data literacy. A key contribution of FRED is combining the data with content that educates users about the data. For example:
The goal is to help users understand data, not just in FRED but everywhere they encounter data.
The power of data to inform policymakers, researchers and the public is incredible, and access to data has never been broader. The difficulty comes in the ability to make sense of them. Dozens of features and tools have been added to FRED over the years to improve access to data. There’s always more to do, and the FRED team is always working on something new.
Providing data is only the first step. Our mission also includes efforts to help illuminate the data and improve people’s understanding of them. The ability to evaluate the data and the meaning behind them is crucial. If users can’t extract information from data, then they have no real value. The St. Louis Fed is working on a solution.
Stierholz is a vice president in the Research division. She heads up the Bank's Homer Jones Library and the FRASER digital library. She also oversees the division’s economic education and editorial groups, as well as the St. Louis Fed Data Desk.
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