Economy
3 Insights From the FED’s Latest Economic Snapshot
3 Insights From the Latest U.S. Economic Data
Each month, the Federal Reserve Bank of New York publishes monthly economic snapshots.
To make this report accessible to a wider audience, we’ve identified the three most important takeaways from the report and compiled them into one infographic.
1. Growth figures in Q2 will make or break a recession
Generally speaking, a recession begins when an economy exhibits two consecutive quarters of negative GDP growth. Because U.S. GDP shrank by -1.5% in Q1 2022 (January to March), a lot rests on the Q2 figure (April to June) which should be released on July 28th.
Referencing strong business activity and continued growth in consumer spending, economists predict that U.S. GDP will grow by +2.1% in Q2. This would mark a decisive reversal from Q1, and put an end to recessionary fears for the time being.
Unfortunately, inflation is the top financial concern for Americans, and this is dampening consumer confidence. Shown below, the consumer confidence index reflects the public’s short-term outlook for income, business, and labor conditions.
Falling consumer confidence suggests that more people will delay big purchases such as cars, major appliances, and vacations.
2. The COVID-era housing boom could be over
Housing markets have been riding high since the beginning of the COVID-19 pandemic, but this run is likely coming to an end. Here’s a summary of what’s happened since 2020:
- Lockdowns in early 2020 created lots of pent-up demand for homes
- Greater household savings and record-low mortgage rates pushed demand even further
- Supply chain disruptions greatly increased the cost of materials like lumber
- Construction of new homes couldn’t keep up, and housing supply fell to historic lows
Today, home prices are at record highs and the cost of borrowing is rapidly rising. For evidence, look no further than the 30-year fixed mortgage rate, which has doubled to more than 6% since the beginning of 2022.
Given these developments, the drop in the number of home sales could be a sign that many Americans are being priced out of the market.
3. Don’t expect groceries to become any cheaper
Inflation has been a hot topic this year, especially with gas prices reaching $5 a gallon. But there’s one category of goods that’s perhaps even more alarming: food.
The following table includes food inflation over the past three years, as the percent change over the past 12 months.
Date | CPI Food Component (%) |
---|---|
2018-02-01 | 1.4% |
2019-05-01 | 2.0% |
2019-06-01 | 1.9% |
2019-07-01 | 1.8% |
2019-08-01 | 1.7% |
2019-09-01 | 1.8% |
2019-10-01 | 2.1% |
2019-11-01 | 2.0% |
2019-12-01 | 1.8% |
2020-01-01 | 1.8% |
2020-02-01 | 1.8% |
2020-03-01 | 1.9% |
2020-04-01 | 3.5% |
2020-05-01 | 4.0% |
2020-06-01 | 4.5% |
2020-07-01 | 4.1% |
2020-08-01 | 4.1% |
2020-09-01 | 4.0% |
2020-10-01 | 3.9% |
2020-11-01 | 3.7% |
2020-12-01 | 3.9% |
2021-01-01 | 3.8% |
2021-02-01 | 3.6% |
2021-03-01 | 3.5% |
2021-04-01 | 2.4% |
2021-05-01 | 2.1% |
2021-06-01 | 2.4% |
2021-07-01 | 3.4% |
2021-08-01 | 3.7% |
2021-09-01 | 4.6% |
2021-10-01 | 5.3% |
2021-11-01 | 6.1% |
2021-12-01 | 6.3% |
2022-01-01 | 7.0% |
2022-02-01 | 7.9% |
2022-03-01 | 8.8% |
2022-04-01 | 9.4% |
2022-05-01 | 10.1% |
From this data, we can see that food inflation really picked up speed in April 2020, jumping to +3.5% from +1.9% in the previous month. This was due to supply chain disruptions and a sudden rebound in global demand.
Fast forward to today, and food inflation is running rampant at 10.1%. A contributing factor is the impending fertilizer shortage, which stems from the Ukraine war. As it turns out, Russia is not only a massive exporter of oil, but wheat and fertilizer as well.
Markets
Ranked: The World’s 50 Top Countries by GDP, by Sector Breakdown
This graphic shows GDP by country, broken down into three main sectors: services, industry, and agriculture.

Visualized: The Three Pillars of GDP, by Country
Over the last several decades, the service sector has fueled the economic activity of the world’s largest countries. Driving this trend has been changes in consumption, the easing of trade barriers, and rapid advancements in tech.
We can see this in the gross domestic product (GDP) breakdown of each country, which gets divided into three broad sectors: services, industry, and agriculture.
The above graphic from Pranav Gavali shows GDP by country, and how each sector contributes to an economy’s output, with data from the World Bank.
Drivers of GDP, by Country
As the most important and fastest growing component of GDP, services make up almost 60% of GDP in the world’s 50 largest countries. Following this is the industrial sector which includes the production of raw goods.
Below, we show how each sector contributes to GDP by country as of 2021:
Country | Services (% GDP) | Industry (% GDP) | Agriculture (% GDP) | Other (% GDP) | GDP (T) |
---|---|---|---|---|---|
🇺🇸 U.S. | 77.6 | 17.9 | 1.0 | 3.6 | $22.9 |
🇨🇳 China | 53.5 | 39.3 | 7.2 | 0.0 | $16.9 |
🇯🇵 Japan | 69.9 | 28.8 | 1.0 | 0.4 | $5.1 |
🇩🇪 Germany | 62.9 | 26.7 | 0.9 | 9.5 | $4.2 |
🇬🇧 UK | 71.6 | 17.3 | 0.7 | 10.4 | $3.1 |
🇫🇷 France | 70.3 | 16.7 | 1.6 | 11.4 | $2.9 |
🇮🇳 India | 47.9 | 26.1 | 17.3 | 8.7 | $2.9 |
🇮🇹 Italy | 65.0 | 22.7 | 1.9 | 10.4 | $2.1 |
🇨🇦 Canada* | 67.7 | 24.1 | 1.7 | 6.6 | $2.0 |
🇰🇷 South Korea | 57.0 | 32.4 | 1.8 | 8.8 | $1.8 |
🇧🇷 Brazil | 57.8 | 20.2 | 7.5 | 14.6 | $1.6 |
🇦🇺 Australia | 65.7 | 25.5 | 2.3 | 6.5 | $1.6 |
🇷🇺 Russia | 54.1 | 31.8 | 3.9 | 10.3 | $1.6 |
🇪🇸 Spain | 67.4 | 20.4 | 2.6 | 9.6 | $1.4 |
🇲🇽 Mexico | 59.2 | 30.8 | 3.9 | 6.1 | $1.3 |
🇮🇩 Indonesia | 42.8 | 39.8 | 13.3 | 4.1 | $1.2 |
🇮🇷 Iran | 47.3 | 38.0 | 12.4 | 2.3 | $1.1 |
🇳🇱 Netherlands | 69.4 | 17.9 | 1.5 | 11.2 | $1.0 |
🇨🇭 Switzerland | 71.9 | 24.6 | 0.6 | 2.8 | $0.8 |
🇹🇷 Turkiye | 52.8 | 31.1 | 5.5 | 10.6 | $0.8 |
🇹🇼 Taiwan | 60.6 | 38.0 | 1.5 | 0.0 | $0.8 |
🇸🇦 Saudi Arabia | 46.5 | 44.7 | 2.7 | 6.1 | $0.8 |
🇵🇱 Poland | 56.9 | 27.9 | 2.2 | 13.0 | $0.7 |
🇧🇪 Belgium | 68.8 | 19.6 | 0.7 | 10.9 | $0.6 |
🇸🇪 Sweden | 65.0 | 22.5 | 1.3 | 11.3 | $0.6 |
🇮🇱 Israel | 72.4 | 17.2 | 1.3 | 9.1 | $0.5 |
🇦🇷 Argentina | 52.5 | 23.6 | 7.1 | 16.8 | $0.5 |
🇦🇹 Austria | 62.4 | 25.8 | 1.2 | 10.5 | $0.5 |
🇳🇬 Nigeria | 43.8 | 31.4 | 23.4 | 1.4 | $0.5 |
🇹🇭 Thailand | 56.3 | 35.0 | 8.7 | 0.0 | $0.5 |
🇮🇪 Ireland | 55.4 | 37.8 | 1.0 | 5.8 | $0.5 |
🇭🇰 Hong Kong | 89.7 | 6.0 | 0.1 | 4.3 | $0.4 |
🇩🇰 Denmark | 66.7 | 19.3 | 0.9 | 13.1 | $0.4 |
🇸🇬 Singapore | 70.3 | 24.4 | 0.0 | 5.3 | $0.4 |
🇿🇦 South Africa | 63.0 | 24.5 | 2.5 | 10.0 | $0.4 |
🇵🇭 Philippines | 61.0 | 28.9 | 10.1 | 0.0 | $0.4 |
🇪🇬 Egypt | 52.5 | 31.2 | 11.4 | 4.9 | $0.4 |
🇧🇩 Bangladesh | 51.3 | 33.3 | 11.6 | 3.7 | $0.4 |
🇳🇴 Norway | 51.8 | 36.3 | 1.7 | 10.2 | $0.4 |
🇻🇳 Vietnam | 41.2 | 37.5 | 12.6 | 8.8 | $0.4 |
🇲🇾 Malaysia | 51.6 | 37.8 | 9.6 | 1.1 | $0.4 |
🇦🇪 U.A.E. | 51.6 | 47.5 | 0.9 | 0.0 | $0.4 |
🇵🇰 Pakistan | 52.1 | 18.8 | 22.7 | 6.4 | $0.3 |
🇵🇹 Portugal | 64.7 | 19.6 | 2.2 | 13.5 | $0.3 |
🇫🇮 Finland | 60.3 | 24.1 | 2.3 | 13.4 | $0.3 |
🇨🇴 Colombia | 58.0 | 24.9 | 7.6 | 9.5 | $0.3 |
🇷🇴 Romania | 59.1 | 26.7 | 4.5 | 9.6 | $0.3 |
🇨🇿 Czechia | 58.8 | 30.3 | 1.8 | 9.1 | $0.3 |
🇨🇱 Chile | 54.4 | 31.3 | 3.6 | 10.6 | $0.3 |
🇳🇿 New Zealand* | 65.6 | 20.4 | 5.7 | 8.4 | $0.2 |
Industrial sector includes construction. Agriculture sector includes forestry and fishing. *Data as of 2019.
In the U.S., services make up nearly 78% of GDP. Apart from Hong Kong, it comprises the highest share of GDP across the world’s largest economies. Roughly 80% of American jobs in the private sector are in services, spanning from healthcare and entertainment to finance and logistics.
Like America, a growing share of China’s GDP is from services, contributing to almost 54% of total economic output, up from 44% in 2010. This can be attributed to rising incomes and higher productivity in the sector as the economy has grown and matured, among other factors.
In a departure from the top 10 biggest countries globally, agriculture continues to drive a large portion of India’s GDP. India is the world’s second largest producer of wheat and rice, with agriculture accounting for 44% of the country’s employment.
While the services sector has grown in India, it makes up a greater share in other emerging economies such as Brazil (58%), Mexico (59%), and the Philippines (61%).
Growth Dynamics
Services-led growth has risen faster than manufacturing across many developing nations, underpinned by productivity growth.
This structural shift is seen across economies. In many countries in Africa, for instance, jobs have increasingly moved from agriculture to services and trade, where it now accounts for 42% of jobs.
These growth patterns are supported by rising incomes in developing economies, while innovation in tech is lowering barriers to enabling service growth. As the industrial sector makes up a lower share of trade and economic activity, the service sector is projected to make up 77% of global GDP by 2035.
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