2013 Economic Trends
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The Pittsburgh Labor Market
Though the United States has been experiencing one of the weakest labor markets in decades, employment conditions in the Pittsburgh area have been much more favorable in recent years. Read More
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Risk-Based Capital Ratios at US Banks
Capital levels offer a glimpse into the health of the banking system. Here we analyze the tier-1 risk-based capital at banks of different sizes. Read More
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Households' Expenditures on Services and the Recovery
Real GDP grew at an annualized rate of 3.6 percent in the third quarter of 2013 according to the Bureau of Economic Analysis’s second estimate—considerably above the advance estimate of 2.8 percent that was released in November. Read More
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Prices from a Monetary Perspective
Economists like to remind people that inflation and deflation are monetary phenomena and that they ultimately stem from central banks’ monetary policies. Read More
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Banks’ Liquidity Position
Ensuring adequate liquidity is an integral part of a financial institution’s management. But how much liquidity is enough? Read More
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Gentrification and Financial Health
Gentrification is sometimes viewed as a bad thing. People claim that it is detrimental to the original residents of the gentrifying neighborhood. Read More
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Does GDI Point to a Stronger Recovery?
Gross Domestic Product (GDP) and Gross Domestic Income (GDI) both measure the same economic variable. These two measures may, sometimes, diverge because of measurement errors. Read More
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Taking Stock of the Labor Market Recovery
A number of factors are putting the pace of labor market improvements on center stage for many financial market observers. Read More
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Short- and Long-Term Inflation Expectations
Consumer prices are rising slowly according to the latest data, although the disinflationary pressure seen in the spring has abated. Annual inflation was 1.5 percent in August 2013. Read More
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Implications of the Government Shutdown on Inflation Estimates
Each month, the Bureau of Labor Statistics (BLS) releases estimates of the Consumer Price Index (CPI) and the Producer Price Index (PPI). Read More
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Consumer Debt and the Housing Market
Household debt has been shrinking since 2009, and the latest data show the trend continues. While auto and student loans have been increasing, credit card and other debt has been declining. Read More
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Thresholds or Dates in Monetary Policy Communications
Since the onset of the financial crisis, the Federal Reserve has been using two main tools to carry out its monetary policy. Read More
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STEM and Healthcare Employment Trends in Ohio, Pennsylvania, Kentucky, and West Virginia
For decades, Americans have looked toward a future in which growing numbers of jobs in healthcare and science, technology, engineering, and mathematics (STEM) would be needed to replace heavy industry as an economic driver. Read More
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Expected Inflation Is Trending Higher
Expected inflation has moved up. Expectations for inflation have been increasing for the last four months. Read More
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Tracking Recent Levels of Financial Stress
The level of the Cleveland Financial Stress Index (CFSI) has decreased in the past few months, indicating a lower level of systemic financial stress. Read More
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Banks Planning for a Stronger Economy
A number of indicators suggest that the banking industry continues to see improvement in overall economic stability. Read More
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Shifting Expectations and Interest Rates
By simply changing their views about future economic conditions and the likely policy response, monetary policymakers can alter financial conditions in the present. Read More
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Differences in Employment Growth across Metropolitan Areas
In the last decade, different metropolitan areas of the United States have experienced dramatically different levels of employment growth. Read More
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Brain Hubs and Manufacturing Centers in the Fourth District
Urban economists like to divide a regional economy into two sectors: tradable and nontradable. Read More
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The Columbus Metropolitan Statistical Area
A profile of the Columbus Metropolitan Statistical Area and how this Fourth District metro area’s economy measures with that of Ohio and the nation. Read More
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What’s Weighing on Inflation?
Various indicators show that CPI inflation has declined over the past year or so. Read More
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Tracking Recent Levels of Financial Stress
The Cleveland Financial Stress Index (CFSI) has remained within a “normal stress” level since the index was revised in April 2013 Read More
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Rising Asset Ownership among the Income-Poor
According to the Survey of Consumer Finances, the fraction of low-income households (defined here as the bottom 20 percent by income) with positive assets has risen considerably over the past two decades from 78.5% in 1989 to 90% in 2010. Read More
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The Pittsburgh Metropolitan Statistical Area
A report and profile of Pittsburgh’s Metropolitan Statistical Area and how this Fourth District metro area measures up with the nation’s economy. Read More
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Changes in Households’ Balance Sheets
For a few years before the recession, Americans had reason to feel richer. Read More
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Behind Recent Disinflation: 2010 Redux?
Inflation rates have been trending lower since the start of 2012. Read More
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Underemployment, College Graduates, and the Recession
The exceptionally high unemployment rate of recent years indicates that the U.S. workforce has been persistently underutilized. With fewer individuals working than would otherwise be, or those with jobs working fewer hours than they would prefer ... Read More
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The Ever-Updated Personal Saving Rate
The Bureau of Economic Analysis estimates that the personal saving rate for the first quarter of 2013 was 2.3 percent—a five-year low, and a substantial drop from the fourth quarter of 2012, when it stood at 5.3 percent. Read More
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Banks Increase their Holdings of Safe Assets
The banking sector seems to have transitioned to a new state in which a higher percentage of bank assets is held in safe forms. During and after the last recession, the percentage of bank assets held in cash, Treasury securities, and ... Read More
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Recent Trends in Various CPI-Based Inflation Measures
The Bureau of Labor Statistics’ most recent release of the Consumer Price Index reported that the index declined in April. Read More
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Housing Recovery?
The lowest point of the housing bust was characterized by a glut of supply. Homes for sale remained on the market longer, and foreclosed homes and those with mortgages in default added to or threatened to add to this inventory. Read More
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Why Are the CPI and the PCE Giving Different Estimates of Inflation?
In January 2012, the Federal Open Market Committee (FOMC) announced that its long-run objective for inflation was 2 percent as measured by the Personal Consumption Expenditures price index (PCE). Read More
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The Delayed Recovery of Investment in Nonresidential Structures
Business fixed investment remains below its pre-recession peak, mainly due to the delayed recovery of one of its components, investment in nonresidential structures (factories, office buildings, etc.). Read More
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Employment Growth Slows in Ohio
Employment in Ohio has grown 2.7 percent since the start of the recovery (June 2009 to March 2013). Over the same period, national employment grew almost a percentage point more. Read More
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The Evolution of Debt Balances
Since the end of the recent financial crisis, individuals have been reducing the large amounts of debt that they had built up prior to the recession. Recent studies show that the percentage of individuals holding debt in 2012 is less than in 2000. Read More
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Has the Natural Gas Boom Impacted the Trade Deficit?
Natural gas production in the United States has surged, thanks to innovations and expansions of shale drilling activity. Though the boom has the potential to affect the broader economy, its impact on the trade deficit has thus far been small. Read More
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An Enhanced Approach to Measuring Financial Stress
The CFSI monitors stress in the overall financial system by tracking conditions in different types of financial markets. Two new markets have just been incorporated into the index, making it more sensitive to potential instability. Read More
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Government Spending and Employment in Recoveries
After steadily increasing for a decade, government spending and employment began to reverse course halfway into 2010. We are now almost four years into the recovery, and neither has returned to levels typical of past recoveries. Read More
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GDP Growth in U.S. Metropolitan Areas during the Recovery
On the whole, GDP growth in U.S. metropolitan areas was strong in the first two years of the recovery. But growth rates varied widely in different places. Read More
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Long-term Inflation Expectations
In February, the CPI stood at 2.0 percent year-over-year, and the core CPI, which is simply the headline CPI measure excluding food and energy prices, was also 2.0 percent over the same period. Read More
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The Impact of Sequestration on Federal Outlays in Fourth District Metropolitan Areas
During the previous decade, federal expenditures and transfers flowing into the metro areas of the Fourth District rose by 48 percent. Read More
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Recent Changes in FOMC Communication and the Committee’s Updated Projections
Over time, the Federal Open Market Committee (FOMC) has sought to improve its public communications by providing more guidance on the likely future path of monetary policy. Read More
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Household Financial Position
In the years preceding the stock market and housing bubbles, household wealth grew faster than incomes, leading Americans to believe that they were getting richer. Read More
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What Shape Is Commercial Bank Capital In?
Regulators require banks to maintain a certain level of capital. Those requirements are put into place to ensure that banks will have enough of a cushion to maintain their daily activities in the event of an unforeseen shock. Read More
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Educational Attainment and Demographic Differences in Employment
It is well-known that employment outcomes such as unemployment rates and employment-to-population ratios vary markedly across demographic groups. Differences in unemployment rates are especially pronounced across age and racial groups. Read More
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The Recession and Recovery from an Industry Perspective
Real GDP grew at an annualized rate of 0.1 percent in the fourth quarter of 2012, according to the Bureau of Economic Analysis’s revised estimate. Read More
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Improvements in High School Graduation Rates
High school graduations rates have risen, according to the latest figures from the Department of Education. But will the trend continue? Read More
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Does Nonfarm Payroll Growth Improve the Taylor Rule?
There has been a lot of interest in financial circles in finding a guidepost or rule of thumb that reflects how monetary policymakers decide how to set interest rates. Read More
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Has the Appetite for Risk Returned?
The year 2012 was a busy one for risky debt. The total value of the various forms of risky debt that were issued—corporate debt, asset-backed securities, collateralized debt obligations, and municipal debt in particular—grew substantially ... Read More
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Behind the Slowdown of Potential GDP
The current level of real GDP is 11.4 percent below the forecast that the Congressional Budget Office (CBO) made back in 2007, before the beginning of the crisis. Read More
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Uneven Debt Burdens across the United States
Americans’ debt burden—the ratio of debt payments to disposable income—grew steadily before the last recession and fell sharply once the recession began. Read More
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The State of the U.S. Labor Market Recovery
It has been five years since the beginning of the Great Recession, and the labor market recovery, while far from great, has been steady. Nevertheless, we are still more than 3 million jobs short of the pre-recession level. Read More
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Exports from the Fourth District States
In the Fourth District states of Kentucky, Ohio, Pennsylvania, and West Virginia, exports make a significant contribution to the economy. Read More
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Japanese Monetary Policy and the Yen
Japan’s new prime minister, Shinzo Abe, has been concerned about the yen’s appreciation and has attributed the yen’s behavior to exceptionally easy monetary policies abroad. Read More
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Persistent Uncertainty for Economic Policymakers
The uniqueness of the most recent recession and its connection to a financial crisis has provided many challenges to policymakers, including the FOMC. Read More
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Tracking Recent Levels of Financial Stress
In recent months, the Cleveland Financial Stress Index (CFSI) has remained low as conditions in key financial markets continued to improve. Read More
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Was 2012 the Year the Housing Market Recovered?
On many occasions during the past few years, housing market conditions have been cited as a key factor contributing to the slow recovery. For a typical household, the largest component of wealth is house value. Read More
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Employment in Education and Healthcare Services
Last month’s employment report showed continued modest expansion in payrolls for the month of December, with the economy adding 155,000 jobs. This is right on the monthly average for the entire year, which stands at 153,000 new jobs per month. Read More
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Survey Measures of Inflation Expectations
The annual inflation level as measured by the CPI was 1.8 percent as of November 2012, whereas the CPI excluding food and energy, usually referred to as the core CPI, was 1.9 percent. Read More
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Changes in District Employment Are Closely Following the U.S. Average
At the national level, the Labor Department tracks employment using two different surveys. One survey asks business establishments how many people they employ, while the other asks households how many individuals in the home have jobs. Read More
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The Changing Composition of Bank-Holding Company Portfolios
One test of the health of the banking sector is to evaluate how risky the assets in banks’ portfolios are. Regulators typically do this by considering banks’ risk-weighted assets. Read More
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Bank-Holding Companies and Changing Capital Ratios
The last financial crisis serves as a clear reminder of the importance of having a banking sector that can withstand a downturn in the economy or a drop in the value of its assets. One of the best protections from such a downturn is capital. Read More
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Recent Changes in National Savings
Economists study national savings—the share of national output not consumed by households, businesses, or the government—because it is the main source of funds available for domestic investment in new capital goods ... Read More