Data Visualization for Macro: Building Better Economic Charts

Why Visualization Matters

Good charts:

• Reveal patterns hidden in tables
• Communicate complex trends quickly
• Drive decision-making
• Build investment narratives

Bad charts:

• Mislead or confuse
• Hide important information
• Waste time
• Undermine credibility

Chart Types for Macro Data

Line Charts

Best for: Time series, trends, multi-series comparison

When to use:

• GDP growth over time
• Interest rate history
• Multiple indicators comparison

Tips:

• Don't exceed 5-7 lines
• Use distinct colors
• Label directly (not legend)
• Consider dual axis carefully

Bar Charts

Best for: Categorical comparisons, single point in time

When to use:

• Country GDP comparison
• Sector breakdown
• Point-in-time snapshot

Tips:

• Order meaningfully (size, time, geography)
• Consistent colors
• Zero baseline (usually)
• Horizontal for long labels

Area Charts

Best for: Parts of a whole over time, cumulative

When to use:

• Contribution to growth
• Market share evolution
• Fed balance sheet composition

Tips:

• Stacked area for composition
• Baseline at zero
• Order logically (stable at bottom)

Scatter Plots

Best for: Relationship between two variables

When to use:

• Inflation vs unemployment (Phillips Curve)
• GDP vs market returns
• Cross-country comparisons

Tips:

• Label notable points
• Add trend line if appropriate
• Watch axis scaling

Heatmaps

Best for: Patterns across two dimensions

When to use:

• Correlation matrices
• Sector/country performance grid
• Time patterns (month vs year)

Tips:

• Choose colormap carefully
• Include scale legend
• Consider accessibility

Design Principles

Clarity

Remove chartjunk:

• No 3D effects
• Minimal gridlines
• No unnecessary decoration
• Gray for secondary elements

Data-ink ratio:

Every pixel should convey information.

Accuracy

Axis scaling:

• Zero baseline for bars
• Consistent scales when comparing
• Log scale when appropriate
• Don't truncate misleadingly

Date handling:

• Consistent date formats
• Clear recession shading
• Annotate key events

Accessibility

Color choices:

• Colorblind-friendly palettes
• Sufficient contrast
• Don't rely on color alone

Text size:

• Legible at intended size
• Clear labels and titles

Macro Chart Best Practices

Time Series Charts

Recession shading:

Always include NBER recession bars.

Y-axis:

• Right-align for second axis
• Clearly label units
• Consider index = 100 for comparison

X-axis:

• Monthly: Show years, quarters
• Quarterly: Show years
• Annual: Show decade marks

Growth Rate Charts

Year-over-year vs month-over-month:

• YoY: Smoother, removes seasonality
• MoM: More timely, more volatile

Annualized rates:

Label clearly (e.g., "3-month annualized").

Multi-Country Charts

Indexing:

Start all series at 100 at common date.

Panel charts:

Small multiples for many countries.

Watch for:

• Exchange rate effects
• Different base years
• Purchasing power adjustments

Color Palettes

Professional Palettes

Blue-focused (recommended):

• Primary data: Deep blue
• Secondary: Lighter blues
• Accent: Orange or red

Colorblind-safe:

• Blue and orange (most distinguishable)
• Avoid red-green combinations

Semantic Colors

• Green: Positive, growth
• Red: Negative, decline
• Gray: Neutral, historical

Tools for Palettes

• ColorBrewer2.org
• Coolors.co
• Viz Palette

Annotation & Context

Key Events

Mark on timeline:

• Policy changes
• Crises
• Elections
• Data revisions

Averages and Benchmarks

Show reference lines:

• Historical average
• Target levels (2% inflation)
• Prior cycle peaks/troughs

Forecast vs Actual

Distinguish clearly:

• Dashed for forecast
• Solid for actual
• Shaded confidence interval

Visualization Tools

Free/Open Source

Python:

• Matplotlib (basic)
• Seaborn (statistical)
• Plotly (interactive)
• Altair (declarative)

R:

• ggplot2 (gold standard)
• Plotly R

JavaScript:

• D3.js (powerful, complex)
• Chart.js (simple)
• Highcharts (commercial but has free tier)

Commercial Tools

Business Intelligence:

• Tableau
• Power BI
• Looker

Specialized:

• FRED's built-in charting
• Bloomberg Terminal
• Refinitiv Eikon

Quick Charting

• Excel (surprisingly capable)
• Google Sheets
• Datawrapper (online, free tier)

FRED Charting Tips

FRED has excellent built-in charting:

Customization:

• Line styles and colors
• Recession bars (automatic)
• Multiple series
• Date range selection

Export options:

• PNG (presentations)
• SVG (publication)
• Data download

Embedding:

• Shareable links
• Embed codes
• API access

Building a Chart Library

Standard Templates

Create templates for:

• Employment situation
• Inflation dashboard
• GDP components
• Yield curves
• Fed policy

Style Guide

Document:

• Color palette
• Font choices
• Axis formatting
• Annotation style

Automation

Consider:

• Scheduled chart updates
• API-fed dashboards
• Version control for code

Common Mistakes

• Dual axis abuse: Misleading correlations

• Cherry-picked scales: Making small changes look big

• Too many series: Spaghetti charts

• Missing context: No recession shading, no events

• Poor color choices: Colorblind issues, low contrast

• Overcomplication: Adding everything

Pro Tips

• Tell one story: Each chart = one message

• Label directly: Avoid legends when possible

• Small multiples: Better than cluttered single chart

• Test at final size: Legibility matters

• Get feedback: Fresh eyes catch issues

• Iterate: First draft rarely best

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