Skip to main content

2000 Economic Trends

  • The Economy in Perspective


    Behind the curve…Those who put their money where their mouths are speculate that next April, the federal funds rate will be nearly 50 basis points lower than today’s 6.5% rate. Read More

  • Savings Association Performance


    Savings associations’ earnings held steady in the first six months of 2000, reaching $5.66 billion by June 30. Read More

  • Real-Time Data


    Data are revised for a variety of reasons. Read More

  • Monetary Policy


    The Federal Open Market Committee (FOMC) left the intended federal funds rate at 6.5% on November 15, the fourth consecutive meeting that has resulted in no change. Read More

  • Manufacturing in Ohio


    The concentration of U.S. employment has been shifting from the goods-producing sector to the service sector (see Economic Trends, September 2000). Read More

  • Labor Markets


    Weak hiring in the government sector constrained growth in total nonfarm employment to only 94,000 last month. Read More

  • International Developments


    In September, the U.S. trade balance on goods and services deteriorated $4.5 billion to a deficit of $34.3 billion, reflecting a $3.8 billion increase in imports and a $0.6 billion decrease in exports. Read More

  • Interest Rates


    The yield curve remains inverted, having shifted down over the past month. The 3-year, 3-month spread has widened from –52 to –65 basis points (bp), and the 10-year, 3-month from –62 to –70 bp. Read More

  • Inflation and Prices


    After rising sharply in September (at a 6.4% annual rate), the Consumer Price Index (CPI) rose much more moderately in October (at an annual rate of 2.1%). Read More

  • Foreign Banking Organizations


    The increasing globalization of financial markets has made its impact on the U.S. Read More

  • Economic Activity


    Gross domestic product (GDP) grew at a 2.4% annual rate in 2000:IIIQ. Read More

  • Bank and Savings Association Structure


    Passage of the 1994 Reigle–Neal interstate banking legislation spurred consolidation among U.S. depository institutions. Read More

  • The Economy in Perspective


    Let’s face it. A decade of strong economic growth, capital investment, budget surpluses, and improved job opportunities doesn’t just happen. Read More

  • Poverty in the U.S.


    Poverty, a persistent problem in the U.S., will soon be getting more attention, both nationally and locally. Read More

  • Operating Balances


    Banks’ operating balances on deposit at Federal Reserve Banks have been declining over most of the past decade. Read More

  • Monetary Policy


    Until recently, the Federal Open Market Committee (FOMC) established growth ranges for the broad monetary aggregates (M2 and M3) and domestic nonfinancial debt. Read More

  • Labor Markets


    Total nonfarm employment showed a net gain of 137,000 workers last month, comparable to September’s gain of 148,000 (adjusted for the effect of strikes and the layoff of the last sizeable contingent of temporary census workers). Read More

  • Inflation and Prices


    The CPI rose 0.5% (6.4% annual rate) during September, after falling for the first time in more than 14 years the month before. Read More

  • Gold


    For those who think it is the “only real money” as well as those who, with Lord Keynes, consider it a “barbarous relic,” gold retains its fascination. Read More

  • Expectations, Markets, and the “Political” Economy


    When it comes to measuring people’s expectations, economists are often skeptical of the direct approach— asking them. Read More

  • Exchange Rates


    Since June, the euro has continued its slide against the dollar, but many of the reasons cited for its decline fail a simple test. Read More

  • Economic Activity


    Nominal GDP crossed the $10 trillion threshold in 2000:IIIQ, according to the advance estimate released late in October. Read More

  • Banking Conditions


    The dominant trend in the consumer loan market is toward securitized loans (loans that are packaged and sold off as securities). Read More

  • The Federal Budget


    Five years of strong economic growth have transformed the federal budget: Perennial deficits have given way to growing annual surpluses. January 1997 projections by the Congressional Budget Office showed a $171 billion deficit for FY2000. Read More

  • The Economy in Perspective


    Growing pains… Policymakers and analysts will be closely scanning fourth-quarter data for signs of a meaningful slowing in U.S. economic activity. Read More

  • Monetary Policy


    At its October 3 meeting, the Federal Open Market Committee (FOMC) left the intended federal funds rate unchanged at 6.5%. Read More

  • Labor Markets


    Labor markets rebounded in September after two consecutive declines in monthly employment. Read More

  • International Interest Rates


    The euro, which previously made headlines when it declined against the dollar, has recently made headlines again, this time because the G-7 nations intervened on its behalf and the Danes decided not to adopt it. Read More

  • Inflation and Prices


    After increasing 0.2% in July, the Consumer Price Index (CPI) fell an annualized 0.7% in August, its first drop in more than 14 years. Read More

  • Household Financial Conditions


    Consumer spending fuels about twothirds of the U.S. economy, so the health of the household sector interests policymakers keenly. Read More

  • Economic Activity


    Gross domestic product (GDP) grew at a 5.6% annual rate in 2000:IIQ. Read More

  • Cross–Generation Wealth Transfers


    The elderly are now one of this country’s best-off population groups, largely because stock market values have surged and Social Security and Medicare benefits have been generous compared to contributions. Read More

  • Banking Conditions


    In the second quarter of this year, commercial banks posted their lowest earnings since 1997:IIQ as net income fell to $14.7 billion, $4.8 billion less than the record earnings reported in the first quarter. Read More

  • Annuities


    Retirees who use their savings to selfinsure their consumption after retirement face two major risks: If they consume at too rapid a rate, they may spend their last years in extreme poverty. Read More

  • The U.S.Trade Deficit


    The monthly U.S. trade deficit has been essentially unchanged since March, with a slight decline in the services surplus offset by a slight decline in the goods deficit. Read More

  • The Economy in Perspective


    Thinking productively about monetary policy… Read More

  • Monetary Policy


    At its August 22 meeting, the Federal Open Market Committee (FOMC) left the intended federal funds rate unchanged at 6.5%. Read More

  • Labor Markets


    In August, total nonfarm employment registered its largest monthly decline (105,000) since 1991. Read More

  • Labor Market Trends


    Among the most striking labor market trends of the past 50 years is the shift in employment from the goods-producing sector to the service sector. Read More

  • Interest Rates


    The yield curve has inverted further since last month, with yields on maturities of two years and above falling, and those below two years rising. Read More

  • Inflation and Prices


    Whether the July price statistics show inflation to be high or low is a matter of perspective. Read More

  • Federal Home Loan Banks


    The 12 Federal Home Loan Banks are stock-chartered, government-sponsored enterprises whose original mission was to provide short-term advances to member institutions, funded by deposits from those institutions. Read More

  • Economic Activity


    The preliminary estimate of GDP growth for 2000:IIQ, at 5.3% (annualized), is 0.1 percentage point higher than the advance estimate, according to the August release. Read More

  • The Economy in Perspective


    This puzzle is designed to help our readers test their economics I.Q. as they lounge in a hammock or lie on the beach. Read More

  • The Dollar and International Trade


    The U.S. goods deficit increased $0.3 billion in May, reaching $37.2 billion, while the services surplus decreased $0.3 billion to $6.1 billion. Read More

  • Monetary Policy


    After the Federal Open Market Committee (FOMC) decided in June to leave the intended federal funds rate unchanged, market participants lowered their expectation that the rate would be increased at the FOMC’s August 22 meeting. Read More

  • Labor Markets


    Shrinking government payrolls and slower private-sector employment growth caused total nonfarm employment to fall 108,000 jobs in July, the first monthly decline since January 1996. Read More

  • Interest Rates


    What is the best way to illustrate interest rate movements? Read More

  • Inflation and Prices


    Is “inflation” worsening? Retail prices, as measured by the Consumer Price Index (CPI), posted a steep gain of 0.6% in June (or 7.2% annualized), compared to May’s 0.1% increase. Read More

  • Foreign Lending Exposure


    U.S. banks’ loans to developing countries have not yet returned to their early-1997 levels, probably because of these countries’ economic weakness as well as more favorable prospects for economic growth elsewhere. Read More

  • Farm Employment


    As the U.S. economy industrialized, farm employment’s share of the workforce plummeted. Read More

  • Economic Activity


    Gross domestic product increased at a surprisingly strong 5.2% annual rate in 2000:IIQ, according to the advance estimate. Read More

  • Deposit Insurance


    The Financial Modernization Act of 1999 created the most sweeping banking reforms since the Great Depression. Read More

  • Agricultural Income


    More than 290,000 people in Kentucky, Ohio, and Pennsylvania rely on agriculture for their livelihood. Read More

  • U.S. Payments Overview


    The payment system, made up of the various methods available to settle debts and obligations, performs an important role in facilitating economic activity. Read More

  • The Economy in Perspective


    Strictly for the birds…Chicken Little was walking in the woods, worrying about the state of the economy, when an acorn fell on his head. “The economy is collapsing,” he cried, “I must run and tell the press.” Read More

  • Regional Conditions


    Advances in communications and information technology are changing not only how we do business, but also where we do business. Read More

  • Poverty Rates


    The current economic expansion, the longest on record, has had only a slight impact on the share of the population living above the poverty line (the line was set at $16,660 for a family of four in 1998). Read More

  • Monetary Policy


    The Federal Open Market Committee (FOMC) left the intended federal funds rate unchanged at 6.5% at its June 27–28 meeting, the first this year at which the target rate was not increased. Read More

  • Labor Markets


    The 190,000 temporary census workers who were dropped from government payrolls contributed heavily to June’s lower-thanexpected total nonfarm employment growth (only 11,000, the smallest increase since January 1996). Read More

  • International Developments


    The U.S. current-account deficit widened from $96.2 billion in 1999:IVQ to $102.3 billion in 2000:IQ. Read More

  • Interest Rates


    The yield curve has shifted downward at all maturities since last month. Read More

  • Inflation and Prices


    Retail prices remained subdued in May, up a modest 0.1%, as energy prices fell again (down 1.9% in the month). Read More

  • Economic Activity


    The final release of statistics on first quarter real GDP growth confirmed that 2000 started with a bang. Read More

  • The Economy in Perspective


    Color my world … The possibilities for monetary policy head games expanded with the June 2 release of new labor market statistics indicating that private-sector payroll employment declined by 116,000 in May Read More

  • The Dollar


    Over the past three years, financial turmoil in Asia, Russia, and Brazil encouraged foreign investors to shift large amounts of funds into the U.S., prompting a broad-based appreciation of the dollar. Read More

  • Savings, Investment, and Foreign Capital


    Proponents of the “new economy” laud our recent strong economic performance as evidence of a sustainable increase in the underlying growth potential of the U.S. Read More

  • Personal, Private, and Government Saving Rates


    Longer life spans and earlier expected retirement imply that Americans will spend a larger fraction of their lifetime without incomeproducing work. Read More

  • Monetary Policy


    At its May 16 meeting, the Federal Open Market Committee (FOMC) voted to raise the federal funds target rate 50 basis points (bp) to 6.5%. Read More

  • Long-Term Trends in Banking Conditions


    During the severe economic downturn of the early 1930s, more than one-third of U.S. banks ceased operations. Read More

  • Life Expectancy and Retirement


    Life expectancy in a given year is the average age a group of newborns would reach if subject to the age-specific death rates prevailing that year. Read More

  • Labor Markets


    Payroll employment growth slowed unexpectedly in May. Read More

  • Interest Rates


    Over the past month, the yield curve shifted higher while retaining its humped shape, with short and long rates lower than medium-term rates. Read More

  • Inflation and Prices


    Following the largest monthly increase in nearly a decade, the Consumer Price Index (CPI) was unchanged in April. Read More

  • Human Welfare and Economic Growth


    Health, literacy, and economic growth are intimately connected. Read More

  • Housing Conditions


    Total housing starts rebounded moderately in April, increasing 2.8% to 1.66 million units annually. Most of the rebound came from starts of multifamily housing; single- family starts increased only slightly. Read More

  • Economic Activity


    The 2000:IQ preliminary GDP estimate confirmed the 5.4% growth rate of the advance estimate as well as the broad contours of the continuing economic expansion. Read More

  • Banking Conditions


    Despite record commercial bank profits in 1999:IVQ, some indicators suggest increased risk exposure. Read More

  • The U.S. International Investment Position


    The U.S. is the world’s largest debtor country, with net obligations exceeding $1.8 billion. Read More

  • The Economy in Perspective


    Once upon a time . . . there lived a grasshopper named Lucky and an ant named Ernest. Read More

  • Ohio Business Openings and Closings


    New businesses in Ohio opened at an average of 27,000 annually between 1988 and 1998. Read More

  • Monetary Policy


    The intended federal funds rate has been at 6.0% since the March 21 meeting of the Federal Open Market Committee (FOMC). Read More

  • Labor Markets


    Employment showed strong growth in April (340,000 workers), following March’s upwardly revised gain of 458,000. Read More

  • International Market Volatility


    The day-to-day volatility of U.S. equity markets has increased markedly this year. Read More

  • Interest Rates


    Do interest rates tell us if inflation— or expected inflation—has increased? Read More

  • Inflation and Prices


    The Consumer Price Index (CPI) rose 0.7% in March (8.8% annualized), its largest monthly increase since August 1990. Read More

  • Household Financial Conditions


    The increased number of bankruptcy filings in recent years is often attributed to rising levels of consumer indebtedness. Read More

  • Education and Earnings in the U.S.


    Americans have made remarkable gains in educational attainment over the last half-century. Read More

  • Economic Activity


    Gross domestic product increased at a 5.4% annual rate in 2000:IQ, according to the advance estimate released in late April. Read More

  • Banking Conditions


    FDIC-insured commercial banks reported record profits of $71.7 billion for 1999 along with an unprecedented 1.3% rate of return on assets. Read More

  • Yield Curves


    Strong economic growth in the U.S. has produced a federal budget surplus for the second consecutive year: $124 billion for fiscal year 1999 on the heels of 1998’s $69 billion surplus. Read More

  • To Fix or to Float? Argentina and Mexico


    Argentina and Mexico provide an ongoing test of the relative merits of fixed and floating exchange rates. Read More

  • The Steel Industry


    Conditions in the steel industry have improved over the last year, but firms and workers still feel the effects of the 1998 downturn triggered by economic collapse in Asia and Russia. Read More

  • The Economy in Perspective


    Caveat emptor…Economic activity surged at the end of last year, expanding at an annualized rate of 7.3% in real terms. Read More

  • Productivity Growth


    Productivity growth (the increase in nonfarm business output per hour of work) has been a key factor in the strength and duration of the current economic expansion. Read More

  • Monetary Policy


    At its March 21 meeting, the Federal Open Market Committee raised the federal funds rate target 25 basis points (bp) to 6.0%. Read More

  • Labor Markets


    After the smallest monthly increase in four years, payroll employment surged by 416,000 workers in March. Read More

  • International Trade


    The U.S. trade deficit in goods and services reached a new record of $28 billion in January 2000. Read More

  • Interest Rates


    The yield curve continues to show a humped shape, with long rates falling since last month. Read More

  • Inflation and Prices


    The Consumer Price Index rose 0.5% in February (6.6% at an annualized rate), its largest monthly increase since April 1999. Read More

  • Economic Activity


    The final estimate of 1999:IVQ real GDP growth is 7.3%, up 0.4 percentage point from February’s 6.9% estimate, itself revised up 1.1 percentage points from January’s advance estimate. Read More

  • The Federal Budget


    Strong economic growth in the U.S. has produced a federal budget surplus for the second consecutive year: $124 billion for fiscal year 1999 on the heels of 1998’s $69 billion surplus. Read More

  • The Euro


    The euro fell below one-to-one parity with the dollar on January 27, 2000, initiating calls for foreignexchange- market intervention. Read More

  • The Economy in Perspective


    On the road again …U.S. stock markets rallied on news that employment grew only 43,000 in February. Read More

  • Monetary Policy


    On February 17, the Board of Governors of the Federal Reserve System submitted its semiannual Monetary Policy Report (or Humphrey– Hawkins Report) to the Congress, as mandated by the Full Employment and Balanced Growth Act of 1978. Read More

  • Labor Markets


    After making substantial increases in January, employers added only 43,000 workers to payrolls in February. Read More

  • Interest Rates


    Unlike most, this month’s yield curve cannot be described as either flatter or steeper than last month’s. Read More

  • Inflation and Prices


    The Consumer Price Index (CPI) rose at a 2.2% annualized rate in January, about the same as each of the previous three months. Likewise, the CPI excluding food and energy, a gauge of so-called core inflation, increased at a 2.0% annualized rate. Read More

  • Federal Home Loan Banks


    The 12 Federal Home Loan Banks are stock-chartered, government sponsored enterprises designed to provide liquidity for specialized housing finance lenders. Read More

  • Economic Activity


    GDP increased at a surprisingly robust 6.9% rate in 1999:IVQ, according to the preliminary estimate released late in February. Read More

  • Dollarization and Ecuador’s Sucre


    On January 9, 2000, the president of Ecuador proposed official dollarization as a way to halt the rapid depreciation of the country’s currency (the sucre), prevent hyperinflation, and establish economic stability. Read More

  • Banking Conditions


    The passage of the Reigle–Neal interstate banking legislation in 1994 spurred on the consolidation of the depository institutions sector. Read More

  • The Economy in Perspective


    The price of success… The Federal Open Market Committee voted on February 2 to increase the federal funds target ¼ percentage point, to 5¾ %. Read More

  • The Current-Account Deficit


    The U.S. current-account deficit has increased sharply since 1997 and is likely to top $360 billion (approximately 3.5% of GDP) when final data for 1999 become available. Read More

  • Real Estate Loans


    The continued downward trend in noncurrent real estate loans is another indication of health in the banking system. Read More

  • Monetary Policy


    Implied yields on federal funds futures are often used to gauge market participants’ expectations for the future path of policy. Read More

  • Labor Markets


    Payroll employment continued to surge in January, recording a net increase of 387,000 jobs. Read More

  • Interest Rates


    The yield curve has moved upward and steepened since last month. Read More

  • Inflation and Prices


    Monthly inflation data continued to point higher at year’s end, evidenced by a nearly 3% annualized rise in the Consumer Price Index (CPI) in December. Read More

  • Household Financial Conditions


    Household financial indicators show little change compared to previous months. Read More

  • Employment in the Fourth District


    Recent Fourth District unemployment rates show a distinct geographic pattern. Read More

  • Economic Activity


    Gross domestic product (GDP) increased at a 5.8% annual rate in 1999:IVQ, according to the advance (first) estimate, released late in January. Read More

  • Earnings of Banks and Savings Institutions


    Third-quarter earnings for FDIC-insured commercial banks reached record levels. Read More

  • The Economy in Perspective


    My dinner with André … “Happy New Year, boychik!” André boomed out as he hurtled across the room; moments later, his hug almost knocked the wind out of me. Read More

  • Monetary Policy


    The Federal Open Market Committee left the 5.5% intended federal funds rate unchanged at its December 21 meeting, citing the need for “a smooth transition into the Year 2000.” Read More

  • Migration and Occupational Change


    Shifting economic conditions often lead to occupational and geographical mobility. Read More

  • Labor Markets


    Labor markets surged in December as the economy continued to show steady job growth. Read More

  • Interest Rates


    Over the course of 1999, the yield curve moved higher and steepened, resuming its normal upward slope from a position of relative flatness at the end of 1998. Read More

  • Inflation and Prices


    The Consumer Price Index rose 0.1% (1.4% annualized) in November, following increases of 0.4% and 0.2% in September and October, respectively. Read More

  • Gold Prices


    Gold prices have fallen precipitously since their recent highs of February 1996, largely because of central banks’ actions. Read More

  • Effective Dollar Exchange Rates


    During 1999, the U.S. dollar depreciated against the Japanese yen, appreciated against most European currencies, and held steady against its Canadian counterpart. Read More

  • Economic Activity


    The final estimate of 1999:IIIQ growth in gross domestic product, released in December, was 5.7%. Read More

  • Banking Legislation


    The wall created by the Glass– Steagall Act to separate commercial banks from securities firms and insurance companies has eroded significantly over time. Read More

  • ATM Use


    The number of ATMs has grown phenomenally over the last few years, mostly in off-premise machines. Read More

  • A Century of Economic Development


    The last century has witnessed major changes in how and where Americans work and live—and in the characteristics of our workers. Read More