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2001 Economic Trends

  • Unemployment in the Fourth District


    Unemployment rates for the Fourth District states of Kentucky, Ohio, and Pennsylvania were already on the rise before September 11. Read More

  • The Economy in Perspective


    Last month, the National Bureau of Economic Research’s Business Cycle Dating Committee announced that U.S. economic activity peaked in March. Read More

  • Money and Financial Markets


    Many interest rates have fallen to their lowest levels in 30 years (except for a brief period in 1998 after the Asian financial crises and the Russian default). The benchmark effective federal funds rate averaged just 2.49% in October. Read More

  • Monetary Policy


    In November, Federal Open Market Committee lowered the intended federal funds rate 50 basis points (bp) to 2%. Its press release stated the “necessary reallocation of resources to enhance security may restrain advances in productivity for a time.” Read More

  • Labor Markets


    Further labor market deterioration was evidenced by another drop in nonfarm payroll employment (331,000 jobs) in November. Read More

  • Japanese Monetary Policy


    Japan’s economy has contracted, and the price level has fallen for much of the last decade. Prospects for a turnaround seem dim. Economists believe near-zero short-term interest rates and falling aggregate price levels have stymied monetary policy. Read More

  • Inflation and Prices


    The consumer price index (CPI) fell an annualized 4% in October, largely because of a sharp (53% annualized) decline in energy prices. The drop in gasoline prices was particularly steep (about 74% annualized). Read More

  • Foreign Central Banks


    In the second week of November, the Federal Reserve, the Bank of England, and the European Central Bank each cut its target interest rate 50 basis points (bp) for a total reduction of 450, 200, and 150 bp, respectively, in policy rates this year. Read More

  • Federal Home Loan Banks


    The 12 Federal Home Loan Banks (FHLBs) 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

  • Effective Federal Tax Rates and Income Distribution


    Between 1979 and 1997, effective tax rates dropped for all income levels. During this period, 15 legislative changes were enacted, affecting both tax rates and tax bases; income grew rapidly, especially at the upper end of the distribution. Read More

  • Economic Activity


    Preliminary gross domestic product (GDP) was revised downward 0.7 percentage point from the advance estimate; it fell at a 1.1% annualized rate in 2001:IIIQ. Read More

  • Argentine Monetary Policy


    Many commentators blame Argentina’s current economic problems on its decision to peg the peso one-for-one to the U.S. dollar. Read More

  • The U.S. Trade Balance


    The U.S. trade deficit shrank from $29.2 billion in July to $27.1 billion in August. This reflects a monthly improvement for goods, both exports and imports, in the balance of goods and services. Read More

  • The Economy in Perspective


    I had seen my old friend André last July, when he astonished me with news that he had returned to politics in Nedlaw, his native land. Delighted to be meeting again so soon, I raised my glass in a toast as we sat in the Endless Bounty. Read More

  • Money and Financial Markets


    Short-term Treasury yields plummeted immediately after the September 11 terrorist attacks and have declined further since then, at least for maturities longer than three months. Read More

  • Monetary Policy


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

  • Migration in the U.S.


    Typical U.S. migration patterns show that for any year, gross flows into and out of a given region are large relative to net flows. In 1999–2000, the South accounted for the largest numbers of both in- and out-migrants. Read More

  • Labor Markets


    Payroll employment dropped sharply in October, posting an unusually large preliminary loss (415,000 jobs net). This decline is twice as large as September’s and the largest recorded since May 1980. Read More

  • International Financial Markets


    The yen/dollar and euro/dollar exchange rates, which fell sharply soon after September 11, have largely recovered. Read More

  • Inflation and Prices


    After a modest August increase, the Consumer Price Index (CPI) rose sharply in September (4.8% annual rate). A marked acceleration in energy price inflation was partly responsible for the dramatic rise. Read More

  • Foreign Central Banks


    The Bank of England cut its policy rate 25 basis points (bp) on October 5, following the Federal Open Market Committee’s 50 bp cut on October 3. Read More

  • Educational Attainment


    The Current Population Survey (CPS) allows analysis of educational attainment for the 25 largest states and 15 largest metropolitan areas in the country. Read More

  • Economic Activity


    According to the advance estimate for 2001:IIIQ, real GDP fell at an annualized rate of 0.4%, the first economic contraction since 1993. This figure suggests the economy may have slipped into a recession for the first time since 1991. Read More

  • Commercial Banks


    Commercial and industrial (C&I) loans made by large banks have been declining steadily since the beginning of 2001:IIQ because of the slowing economy. Read More

  • Banking Conditions


    The number of FDIC-insured commercial banks has continued to decline, dropping to 8,178 at the end of 2001:IIQ. Merger activity has remained fairly steady over the past year, with 193 mergers reported in the first half of 2001. Read More

  • The Economy in Perspective


    September 11 terrorist attacks have dramatically altered economic landscape. Before, many analysts had conjectured economic conditions were stabilizing, but attacks sapped economy’s momentum and dealt a staggering blow to several industries. Read More

  • Savings and Loan Associations


    In many ways, savings associations mirrored commercial banks in the first half of 2001, earning $6.2 billion and posting record second-quarter earnings of $3.4 billion. Read More

  • Ohio Unemployment


    Ohio’s unemployment rate generally follows the U.S. trend, but since the beginning of 2001, Ohio’s rate (reported by the Bureau of Labor Statistics) has diverged notably from the national trend. Read More

  • Money and Financial Markets


    At least since Walter Bagehot’s day in the late 1800s, the classic advice to central banks in real or incipient financial crises has been to “lend freely”—in modern parlance, to supply liquidity. Read More

  • Monetary Policy


    The events of September 11 raised the possibility of disruptions in the payments system and the federal funds market. Soon after the attacks, the Federal Reserve announced that the discount window was “available to meet liquidity needs.” Read More

  • Labor Markets


    September’s employment decline was the largest since 1991; even so, it may understate the changes taking place. Payroll employment fell 199,000, its fourth decline in the past six months. Read More

  • International Transactions


    During the first half of 2001, the U.S. current account deficit narrowed $39.3 billion (annual rate) from its record $465.3 billion in 2000:IVQ. Read More

  • Inflation and Prices


    The overall cost of the consumer market basket, as measured by the Consumer Price Index (CPI), rose negligibly in August and has shown no net increase over the past three months. This is primarily the result of a sharp drop in energy prices. Read More

  • Foreign Central Banks


    Major central banks supplied the liquidity their banking systems needed to remain open and to make payments after the September 11 attack. Read More

  • Exchange Rates and Monetary Policy


    Changes in the federal funds target rate affect economic activity through different channels or transmission mechanisms. Most people understand the interest rate transmission mechanism. Read More

  • Economic Activity


    Real GDP growth over the past four quarters was a paltry 1.2%, but even this was better than the 0.3% increase registered for 2001:IIQ. Read More

  • Commercial Banks


    Through the first six months of 2001, FDIC-insured commercial banks reported record earnings of $39 billion, surpassing the first half of 2000 by $4.8 billion (14.1%), which translates into an annualized return on assets of 1.24%. Read More

  • Business Employment Growth


    The Current Employment Statistics survey is undergoing a major revision so that it can account better for employment added when new businesses open and lost when existing businesses close. Read More

  • The U.S. Saving Rate


    The recent economic slowdown has shrunk federal revenues, reduced projected budget surpluses, and drawn policymakers’ attention to a dilemma. Fulfilling benefit promises under Social Security and Medicare will be easier if the economy grows rapidly. Read More

  • The Economy in Perspective


    A dialogue between Paasche and Laspeyres. The setting: An office. A computer. Evening. [Paasche, staring intently at the computer monitor, keeps repositioning the mouse. He moves, clicks, and moves again. He gives up, sighs, and tries again.] Read More

  • Money and Financial Markets


    Despite the Federal Open Market Committee’s aggressive three percentage-point reduction in the intended funds rate since January, hopes for an incipient resurgence in economic activity appear to be slipping. Read More

  • Monetary Policy


    At its August 21 meeting, the Federal Open Market Committee lowered the intended federal funds rate 25 basis points (bp) to 3 1/2%. Read More

  • Labor Markets


    Nonfarm payroll employment fell again in August by 113,000 jobs, reversing the gains made in July. Revised data for July, as for previous months, now show more favorable employment conditions than previously reported. Read More

  • International Developments


    The U.S. trade deficit on goods and services increased $0.9 billion in June, from $28.5 billion in May. This change combines declines in both imports and exports, probably reflecting a decline in economic activity here and abroad. Read More

  • Inflation and Prices


    The Consumer Price Index (CPI) fell in July for the first time since April of last year. In fact, the 0.3% decline in the index (–3.3% at an annualized rate) was the sharpest in more than 15 years. Read More

  • Household Demographics


    Household spending, household employment, and median household income are often cited in the news as indicators of the economy’s health. But what exactly is a household? Read More

  • Foreign Central Banks


    The world’s major central banks took easing actions in August. Target rates dropped 0.25 percentage point: the Federal Reserve’s rate to 3.5%; the Bank of Canada’s to 4.0%; the ECB’s to 4.25%; and the Bank of England’s to 5%. 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 for the national income and product accounts (NIPA) for 2001:IIQ, released on August 29, paints a gloomier picture than the advance estimate for the quarter. Read More

  • The Economy in Perspective


    Among connoisseurs of official economic statistics, the Commerce Department’s recent revision to the national income and product data for the last few years has already caused quite a hubbub. Read More

  • Money, Manufacturing, and the Strong Dollar


    Some commentators have urged the Federal Reserve to help U.S. firms that export or that compete against imports by easing monetary policy and fostering a dollar depreciation. This is a bad idea. Read More

  • Money and Financial Markets


    Monetary Policy Report that Federal Reserve recently submitted to Congress includes an updated set of economic projections from Board of Governors and Federal Reserve Bank presidents, all of whom participate in deliberations of FOMC. Read More

  • Monetary Policy


    The Board of Governors of the Federal Reserve System submitted its semiannual Monetary Policy Report to the Congress on July 18. Read More

  • Manufacturing in Ohio


    It is no surprise that Ohio, long considered to have a heavily industrial economy, derives more than 25% of its gross state product from the manufacturing industry. Read More

  • Labor Markets


    Nonfarm payroll employment fell again in July, although the loss of 42,000 is much smaller than the 93,000 posted in June. Industries with no significant net employment loss are now showing very little growth. Read More

  • Inflation and Prices


    The Consumer Price Index (CPI) rose 0.2% in June after a worrisome 0.4% increase in May. Falling energy prices accounted for much of the deceleration: The CPI’s energy index fell 0.9% during the month, following May’s increase of 3.1%. Read More

  • Foreign Central Banks


    None of the four major central banks has changed its policy setting since the Federal Reserve shaved 25 basis points from the federal funds rate target in late June. Read More

  • Economic Activity


    The advance estimate for the national income and product accounts, released July 27, reported that gross domestic product grew at a meager annualized rate of 0.7% during 2001:IIQ. Read More

  • Credit Unions


    Credit unions are mutually organized depository institutions that provide financial services to their members. Like banks and savings associations, the credit union industry appears to be consolidating. Read More

  • Argentina


    In 1991, Argentina adopted the “convertibility plan” to reduce its four-digit annual inflation rate. Under this plan, Argentina pegged the peso one-to-one to the U.S. dollar and held a dollar in reserve for every peso the central bank issued. Read More

  • 401(k) Plans and Lifetime Taxes


    Slightly less than half of all workers are covered under some type of employer-sponsored defined-contribution pension plan; over one-fifth contribute more than 11% of their salary to such plans. Read More

  • Union Membership


    This country’s 16.3 million labor union members accounted for only 13.5% of all workers in 2000, continuing the downward trend from the 20.1% membership rate reported in 1983 (the first year in which comparable data were available). Read More

  • The Economy in Perspective


    On my way to the restaurant, I realized that I hadn’t seen André in nearly 18 months, although I’d heard plenty about him. Read More

  • Savings and Loan Associations


    In many ways, savings associations performed like commercial banks, with first-quarter earnings of $2.9 billion (up from $2.6 billion in 2000:IVQ and unchanged from 2000:IQ). Read More

  • Money and Financial Markets


    Have we gone too far? Or is this just a beginning? Some consider the actions of the Federal Open Market Committee (FOMC) during the current economic slowdown fully consistent with the quest for maximum long-term real growth through low inflation. Read More

  • Monetary Policy


    Federal Open Market Committee (FOMC) lowered intended federal funds rate 25 basis points (bp) to 3.75%, citing “declining profitability and business capital spending, weak expansion of consumption, and slowing growth abroad” as reasons for rate cut. Read More

  • Labor Markets


    Nonfarm payroll employment posted a net loss of 114,000 jobs in June, a dramatic reversal of May’s (revised) net gain of 8,000 jobs. June’s preliminary figure shows the second considerable loss in the last three months. Read More

  • International Developments


    The U.S. current account is measured quarterly. In 2001:IQ, the current account deficit decreased to $109.6 (from $116.3 billion in 2000:IVQ). Read More

  • Inflation and Prices


    Retail price growth seems to have accelerated slightly in May. Consumer Price Index (CPI) jumped an annualized 4.9%; after subtracting out the highly volatile food and energy components, however, the increase was a much more modest 1.3%. Read More

  • Foreign Central Banks


    Major central banks made no changes in operating targets in June until the Federal Reserve announced a rate cut of 25 basis points (bp) on June 27. Read More

  • Economic Activity


    The final estimate from the National Income and Product Accounts for 2001:IQ reveals that real GDP grew at an annual rate of 1.2% in that quarter, down slightly from the preliminary estimate of 1.3%. Read More

  • Credit Card Use in Ohio


    The Buckeye State Poll is a monthly telephone survey that queries Ohio residents on a range of political, economic, and religious topics. Read More

  • Commercial Banks


    Commercial banks’ quarterly earnings ($19.9 billion for 2001:IQ) surpassed the record of $19.4 billion reported for 2000:IQ. These profits translate into an annualized return on assets of 1.27% for 2001:IQ, up slightly from 1.19% for the year 2000. Read More

  • The Economy in Perspective


    According to Fed-watchers, the Federal Reserve is nearing a crossroads in its thinking about the need for further reductions in the federal funds rate. Read More

  • Saving, Investment, and International Financial Flows


    Necessary counterpart to our enormous current account deficit is an inflow of foreign savings. Over past decade, our current account deficit has generally reflected strong U.S. investment opportunities rather than American consumers’ profligacy. Read More

  • Money and Financial Markets


    Interest rates fell across the entire maturity spectrum last winter, when incoming data revealed an abrupt weakening in economic conditions. Read More

  • Monetary Policy


    The Federal Open Market Committee (FOMC) lowered the intended federal funds rate 50 basis points (bp) to 4% at its May 15 meeting. Its press release cited weakened business profitability as a factor in reduced spending on capital equipment. Read More

  • Migration of Graduates


    Developing a highly skilled workforce is often the justification for state spending on high school and higher education programs, but those education dollars do not necessarily translate directly into a better-educated workforce in that state. Read More

  • Labor Markets


    The downward trend in payroll employment continued in May, with a net loss of 19,000 jobs, but this was a considerable improvement over April’s loss of 182,000 jobs. Read More

  • International Transactions and Statistical Discrepancy


    No current account deficit can exist without an equal inflow of foreign investment funds. Practically speaking, however, the measurement of trade and financial flows is difficult and often incomplete. Read More

  • Inflation and Prices


    Following a modest 0.1% increase in March, the Consumer Price Index (CPI) rose 0.3% in April. A 1.8% surge in energy prices contributed to the jump in retail prices. Read More

  • Foreign Central Banks


    On May 11, the European Central Bank (ECB) cut its main refinancing rate target 25 basis points (bp) to 4.5%. It was the last major central bank to respond to the current global economic slowdown. Read More

  • Electricity Generation and Consumption


    High gasoline prices and California’s electricity shortages have focused attention on electricity generation and energy conservation. Read More

  • Economic Activity


    Real gross domestic product (GDP) growth was revised down 0.7 percentage point from the advance estimate to an annualized rate of 1.3% in 2001:IQ. The estimate of personal consumption growth was lowered slightly but remains healthy at nearly 3%. Read More

  • Commercial Banks


    In May 2001, the net share of domestic and foreign commercial banks’ senior loan officers who reported tightening standards for commercial and industrial loans in 2001:IIQ fell to 50.9% for large and mid-size firms and 36.4% for small ones. Read More

  • The U.S.Trade Balance


    The U.S. trade deficit in goods and services fell $6.3 billion in February to $27 billion as the result of a $0.9 billion increase in exports and a $5.4 billion decline in imports. Read More

  • The Economy in Perspective


    This morning the Bureau of Labor Statistics reported that payroll employment declined by more than 200,000 people in April, a much larger number than private analysts had expected. Read More

  • The 2000 Census


    Preliminary data from Census 2000 show that the U.S. population grew 13.2% between 1990 and 2000. Every state’s population increased, but rapid growth was concentrated in the South and West. Read More

  • Supplemental Appropriations


    Although budget authority for discretionary federal outlays is established annually through the budgeting process, Congress enacts supplemental appropriations bills outside of the budget cycle. Read More

  • Money and Financial Markets


    Starting in mid-1999, the intended federal funds rate first was raised from 4.75% to 6.5% in six steps and then was cut sharply to 4.5% in four moves of 50 basis points (bp) each. Read More

  • Monetary Policy


    In an inter-meeting action on April 18, 2001, the Federal Open Market Committee (FOMC) lowered the intended federal funds rate 50 basis points (bp) to 4.5%, its lowest level since August 1994. Read More

  • Labor Markets


    The downward trend in payroll employment continued in April, with a net loss of 223,000 jobs. As in March, large job losses occurred in manufacturing and help supply services. Read More

  • Inflation and Prices


    After large increases in the first two months of 2001, the Consumer Price Index (CPI) rose a very modest 0.1% (0.7% annualized) in March. Read More

  • Foreign Exchange Rates


    The S&P 500 has declined 18% in the past year, and the NASDAQ has fallen 52%. One might expect foreign investors to have liquidated some of their U.S. holdings and reinvested the proceeds abroad. Read More

  • Foreign Central Banks


    Reductions in the Federal Open Market Committee’s interest rate target this year have been paralleled by three other central banks of the G7, but not by the European Central Bank (ECB). Read More

  • FHLB Advances to Depository Institutions


    Federal Home Loan Banks (FHLBs) were established to lend to federally chartered thrift institutions and member banks having at least 10% of assets in mortgages. FHLB advances had to be collateralized by borrowing institutions’ mortgage portfolios. Read More

  • Economic Activity


    The advance estimate for the National Income and Product Accounts, released April 27, reported output growth of 2.0% in 2000:IQ—much stronger than had been expected. (The Blue Chip forecast for the first quarter was for less than 1% growth.) Read More

  • Commercial Bank Lending to Small Businesses


    U.S. Small Business Administration Office of Advocacy reports in 1999, small businesses with less than 500 workers employed 53% of private nonfarm workforce, made 47% of all U.S. sales, and were responsible for 51% of private gross domestic product. Read More

  • The Fourth District in Focus


    The Fourth District is an unwieldy entity, composed of 169 counties in four states, but its composition is important for understanding its evolving economy. Read More

  • The Federal Budget


    Recent projections by the Congressional Budget Office place the cumulative 10-year (FY2002–11) surplus at $5.6 trillion. This figure is more than $1 trillion higher than the estimate given last July for FY2001–10. Read More

  • The Economy in Perspective


    The Federal Open Market Committee has reduced its policy-controlled interest rates—the federal funds rate target and the discount rate—three times already this year, and if the majority of Fed-watchers are right, more rate cuts are in the offing. Read More

  • Savings Associations


    In many ways, savings associations’ performance mirrored commercial banks’ in 2000. Savings associations’ earnings were $10.7 billion, slightly below the 1999 record of $10.826 billion. Return on assets was 0.92%. Read More

  • Money and Financial Markets


    The March 20 reduction of the federal funds rate target (from 5.50% to 5.00%) has not quelled discussion on the appropriateness of monetary policy. Read More

  • Monetary Policy


    At its March 20 meeting, the Federal Open Market Committee (FOMC) lowered the target federal funds rate 50 basis points (bp) to 5.0%, the third 50-bp cut in 2001. Read More

  • Labor Markets


    In March, manufacturing and help supply services (temporary help) posted large employment losses, which combined with below-average gains in most service industries to cause a net decrease of 86,000 in total nonfarm payrolls. Read More

  • Japan’s Monetary Policy


    Deflation and relatively weak economic growth have bedeviled Japan's economy for more than two years. Sharp declines in real growth and inflation during early 1990s were followed by several years of advancing growth rates and low measured inflation. Read More

  • Inventories and Imports


    Many economists believe that the current cooling in economic activity largely reflects an inventory correction that will pass fairly quickly and painlessly. Two observations support this prognosis. Read More

  • Inflation and Prices


    The recent acceleration in energy price increases reversed course in February, after a January in which the Consumer Price Index (CPI) posted its largest monthly increase in more than a decade. Read More

  • Fourth District Export Growth


    Since the mid-1980s, overall U.S. manufacturing exports have increased sharply as a share of gross domestic product, but their state-by-state performance has been uneven. Read More

  • Economic Activity


    Gross domestic product (GDP) grew at a 1.0% annual rate in 2000:IVQ. Consumer spending was revised downward but remained healthy, with nearly 3% growth. Read More

  • Commercial Banks


    Commercial banks showed negligible deterioration in 2000, with earnings of $71.176 billion, off slightly from 1999. Return on assets also declined somewhat (1.19% in 2000, compared to 1.31% in 1999). Read More

  • Unemployment in Canada and the U.S.


    Since the early 1980s, the U.S. unemployment rate has been about two percentage points lower than Canada’s. Before that time, the two countries’ unemployment rates were almost identical. Read More

  • The Steel Industry


    The recent troubles of Cleveland’s LTV Steel Corporation have brought regional focus to the health of the U.S. steel industry. Read More

  • The Economy in Perspective


    The tangible manifestations of the current U.S. economic slump have reinvigorated the Old Economy/New Economy debate. Read More

  • The Canada/U.S. Exchange Rate


    Before 1976, the exchange rate between the U.S. and Canadian dollar was typically not far from one. The U.S. dollar appreciated significantly against Canada’s in 1976–85 and again between 1991 and the present. Read More

  • The Automobile Industry


    U.S. motor vehicle sales reached new highs in 1999 and 2000, but forecasters do not expect this trend to continue. The February 2001 edition of Blue Chip Economic Indicators reported a consensus forecasts sales would fall to 16.0 million in 2001. Read More

  • Production Workers’ Earnings


    The American economy has experienced a 60% increase in real per capita output since 1970. Read More

  • Money and Financial Markets


    Growth in the broad monetary aggregates accelerated sharply in January. Annualized year-to-date M2 growth reached 10.2% and annualized year-to-date M3 growth hit a remarkable 13.2%. Read More

  • Monetary Policy


    On February 13, Board of Governors of the Federal Reserve System submitted its semiannual Monetary Policy Report to Congress, and Federal Reserve Chairman Alan Greenspan testified before the Senate Committee on Banking, Housing, and Urban Affairs. Read More

  • Lending by Depository Institutions


    In the last quarter of 2000, the net share of commercial banks’ senior loan officers (domestic and foreign) who reported tightening their lending standards on commercial and industrial loans reached 60% for large firms and 45% for small firms. Read More

  • Labor Markets


    In the U.S., inequality among individuals in both consumption and income increases with age, although it is unclear how large a role income inequality plays in consumption inequality. Read More

  • International Monetary Policy Rates


    The central banks of other major countries have not imitated the Federal Open Market Committee’s 100 basis point (bp) easing of the federal funds rate target in January. Read More

  • Inflation and Prices


    Inflation worsened unexpectedly in January. The Consumer Price Index (CPI) rose at a decade-high 7.8% annual rate, helping to push its 12-month growth trend to 3.7%, the highest level in nearly nine years. Read More

  • Economic Activity


    According to the recently released preliminary estimate, real GDP growth in 2000:IVQ was somewhat weaker than reported in the advance estimate—1.1% compared to 1.4%. Read More

  • Workers’ Health Insurance Costs


    The incidence of health insurance coverage varies considerably by income. As the table shows, full-time workers at or below poverty line are over five times more likely to be uninsured than are workers whose income is at least 300% of poverty line. Read More

  • The U.S.Trade Balance


    While many Americans are aware of the enormous overall U.S. trade deficit, few realize that our trade in services shows a surplus. The overall trade deficit results solely from our trade in goods. Read More

  • The Economy in Perspective


    Most people pondering worst-case scenarios for the U.S. economy this year are likely to be concerned that the slowdown we have been experiencing will be unusually steep and protracted. Read More

  • Money and Financial Markets


    Now that 2000 is history, we can put its monetary and financial developments into perspective and, at the same time, use them to illuminate the current state of the economy. Read More

  • Monetary Policy


    At its January 31 meeting, the Federal Open Market Committee (FOMC) lowered the target federal funds rate 50 basis points (bp) to 5.5%. Read More

  • Labor Markets


    Unusual winter weather made for large seasonally adjusted employment gains in construction, contributing strongly to January’s 268,000-job surge in nonfarm payrolls. Read More

  • Inflation and Prices


    Consumer price inflation in December had a familiar look, matching the 2.1% annualized pace registered for the entire October–December period. Read More

  • Health Care Coverage in the U.S.


    While all seniors in the U.S. are covered by Medicare, not all younger Americans have health insurance. After rising steadily throughout the 1990s, the share of the population not covered by health insurance declined in 1999. Read More

  • Foreign Central Banks


    Central banks for the major currencies use somewhat different institutional and market devices to implement policy. Read More

  • Economic Activity


    Gross domestic product (GDP) grew at a paltry 1.4% annual rate in 2000:IVQ. Despite this weak showing, the year still finished with a healthy fourth-quarter to fourth quarter growth rate of 3.5%. Read More

  • Credit Unions


    Credit unions are mutually organized depository institutions that provide financial services to their members. Like banks and savings associations, credit unions seem to be consolidating. Their numbers fell from 12,596 in 1992 to 10,479 at mid-2000. Read More

  • Argentina’s Currency Board


    Countries fare best with either a perfectly fixed or a completely floating exchange rate rather than a hybrid. Choosing the best arrangement for a particular country, however, is a difficult task. Read More

  • The Economy in Perspective


    Recession. There, we said it! Not that we are predicting one, mind you, but we’ve noticed that the R-word is rarely used in Federal Reserve publications and we just wanted to get it into print. Read More

  • Monetary Policy


    The Federal Open Market Committee (FOMC) maintained the intended federal funds rate at 6.5% on December 19, its final regular meeting of 2000. Read More

  • Long-Term Federal Budget Projections


    Congressional Budget Office’s projections suggest that, if current policies remain in place, federal revenues will grow comparably to GDP and will stay just below 20% of GDP through 2070 (under mid-range economic and demographic assumptions). Read More

  • Labor Markets


    Despite signs of weakening in the overall economy, labor markets held steady, albeit with slower job growth than earlier in 2000. Read More

  • International Developments


    The dollar’s trade-weighted value has slipped in recent weeks. The Major Currency Index is down more than 4% and the Broad Dollar Index more than 2% since their peaks in late November. Read More

  • Interest Rates


    As 2000 closed, the yield curve was inverted, with a 3-year, 3-month spread of –78 basis points (bp) and a 10-year, 3-month spread of –74 bp. The inversion’s proximate cause was an increase in short rates combined with a decrease in long rates. Read More

  • Inflation and Prices


    Consumer Price Index rose 2.1% (annualized) in November, replicating the growth rate for October. Despite two consecutive months of moderate growth, CPI has grown at 3.5% (annualized) since September, just above 3.4% average rate for the past year. Read More

  • Economic Activity


    In 2000:IIIQ, gross domestic product (GDP) grew at a 2.2% annual rate, its slowest in four years. Read More

  • Defined-Contribution Pension Plans


    For 25 years, employers increasingly have turned to defined-contribution (DC) pension plans, partly because they are cheaper to administer and reduce their risks of funding pension coverage. But DC plans benefit employees as well. Read More

  • Banking Conditions


    Consistent with the slowing economy, conditions for the nation’s FDIC-insured depository institutions remained mixed in the third quarter. Read More

  • 401(k)-Type Plans


    Redressing Social Security’s funding shortfall by cutting benefits or hiking payroll taxes is likely to make returns on past contributions barely, if at all, positive. Read More