Issue #27 | August 6, 2019
Recently, from the Cleveland Fed
Attendees gather in Cincinnati, Ohio, for Policy Summit 2019
Hundreds of policymakers, community and economic development practitioners, bankers, and researchers gathered for the 14th Policy Summit to discuss issues affecting low-income people, from opportunity zones and transit to racial equity and neighborhood revitalization. If you missed this year’s Policy Summit, don’t worry. We’ve got the highlights. Watch the videos of keynotes and plenaries, and get the presentations and takeaways from each of the twelve breakout sessions.
Two new inflation estimators and their forecasting capabilities
This article introduces two new measures of trend inflation—the median personal consumption expenditures (PCE) inflation rate and the median PCE excluding owners’ equivalent rent (OER) inflation rate. These measures help policymakers look at current price data and tell where inflation is headed in the longer run. See how these indexes compare to other inflation estimators.
Forecasting in an uncertain world
Amid economic and policy developments in the US in the past few years, one thing has not changed, according to Cleveland Fed President Loretta J. Mester: Monetary policymakers “are operating in a world of economic and geopolitical uncertainties that cloud the outlook.” What are those uncertainties? Read the speech to find out.
No college degree? You can work with that
Nearly two-thirds of US adults do not have a four-year college degree, a fact that can limit their earning potential. In April, the Cleveland and Philadelphia Feds updated previous research on “opportunity occupations,” jobs that don’t require a four-year degree but still offer wages above the annual national median pay. Learn what opportunity jobs are hot in your area.
Cleveland Fed brings aboard new regional outreach manager
Did you know the Cleveland Fed conducts research on the issues low- and moderate-income communities face? Critical to that effort is ensuring that the research is informed by community stakeholders and that it is shared with people who can use it. As Cleveland Fed’s newest regional outreach manager, Ken Surratt will be in charge of engaging nonprofits, funders, policymakers, and more with the work of the Community Development Department. Learn more about Surratt and the whole community development team.
What is “economic migration,” and why is it important enough for economists to study?
Economic migration is the term used when people move from one region to another for a job. They could be moving any distance from their current residence, within a state, from Erie to Pittsburgh, for example, or cross-country, from Boston to Los Angeles. The people most likely to relocate for a job are people 25 to 54 years old, or “working-age adults.” Younger adults are more likely to move to attend school, and seniors most often move for family reasons.
Economic theory suggests, and a lot of historical experience has confirmed, that migration can be good for economic growth and productivity. We’re more likely to get highly productive, good matches between workers and firms when people can relocate freely and when a firm can expand its hiring search across the country to hire the best worker for the job.
The opposite also holds true. If a worker is not able to move out of his city or state, he has to accept the best job locally that he can find, whether or not it’s a good match. This puts a burden on the hiring firm, too; it also has to settle for what it can get. This issue is important because having mismatched skills and jobs keeps productivity lower than it could be otherwise. Higher productivity means economic growth that benefits everyone.
Personally, I’ve been intrigued by this. I grew up in this area of the country, a region that has been grappling with deindustrialization, which is closely tied to the migration issue. National policymakers want to see people migrate out of areas that have lost thousands of jobs because this helps alleviate unemployment and poverty. Regional policymakers always want to retain and attract educated workers for the local firms in growing industries. In recent years, all types of migration, including economic migration, have slowed down. Right now, economists are trying to determine how much of the slowdown is due to a lack of regions offering great economic opportunities or a growing similarity between job markets across the country.
is a research economist in the Cleveland Fed’s Research Department. His current work includes research on housing markets and studies of state and local public finance.
Graphic of the Month
Changes in the kinds of work people do
The mix of occupations in which people have worked in the United States has evolved in the century from 1870 to 1970. The graph here shows five major shifts in the mix, including the decline of agricultural employment.
By the Numbers
On the Calendar
Before summer vacation’s up, play here!
Get in the game at the Cleveland Fed’s Learning Center and Money Museum (Cleveland, OH)
Open 9:30 am to 2:30 pm, Monday–Thursday. Closed bank holidays.
Banking and the Economy: A Forum for Minorities in Banking (St. Louis, MO)
FedTalk: What is Behind the Persistence of the Racial Wealth Gap? (Cleveland, OH)
5:30 to 7:30 pm, Federal Reserve Bank of Cleveland
Mark your calendar
March 9–12, 2020
2020 National Interagency Community Reinvestment Conference (Denver, CO)
From around the Federal Reserve System
Meet me in St. Louis—Attend diversity conference for banking leaders
Minority banking leaders are gathering in St. Louis this September to attend Banking and the Economy: A Forum for Minorities in Banking. If you’re a senior-level or high-potential minority banking leader, sign up to attend and gather industry, leadership, and professional development knowledge to enhance your career and network. Learn more about the ways in which the Federal Reserve preserves and promotes minority-owned institutions through its Partnership for Progress program.
If you are interested in diverse supplier opportunities at the Cleveland Fed, please register.
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