2014 Economic Trends
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The Great Inflation
Price pressures seem quiet—almost too quiet. In October, the PCE chain price index increased 1.4 percent on a year-over-year basis. Read More
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Short- and Long-Term Inflation Expectations
Following three months of flat year-over-year inflation readings as measured by the Consumer Price Index (CPI), November's reading moved down to 1.3 percent. Read More
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Implied Taylor Rules among Forecasters
We explore whether professional forecasters appear to use a Taylor rule when they forecast the future funds rate, and if so, how similar their regression coefficients are to each other and to those in a Taylor rule that fits the historical data. Read More
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Gauging the Impact of the Small Business Lending Fund
The Small Business Lending Fund was created to encourage small business lending by providing capital to community banks. We examine 2014:Q4 data to determine whether banks that received funding have increased their small business lending. Read More
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The Effect of Oil Price Declines on Consumer Prices
People are concerned that low oil prices will keep inflation persistently below or even push it further from targeted levels. We gauge the potential pass-through of the recent oil-price declines to other domestic prices. Read More
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Employment Trends in Pennsylvania
Pennsylvania's unemployment rate was 5.7 percent in September. Read More
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Slow Recovery in Wages and Salaries Continues despite Strong Jobs Growth
After enduring the worst recession since the Great Depression, Americans have been finding jobs at an increasing rate. Meanwhile, wage and salary growth has fallen in every sector except goods-producing. Read More
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Recent Trends in Local Multipliers
Economists have found evidence for a local multiplier effect. I estimate with more recent data and find the effect is different in recession and recovery. Read More
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Tracking Recent Levels of Financial Stress - October
The Cleveland Financial Stress Index (CFSI) fluctuated between grades 1 and 2 throughout the third quarter of 2014. Read More
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Banks’ Ability to Generate Income after the Crisis
Has the financial crisis affected banks' ability to generate income? Has it forced them to generate income in new ways? We look at banks' net income and two components of net income, net interest income and net noninterest income. Read More
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Regional Bank Health: Trends in Net Charge-Offs
We assess the health of regional bank loan portfolios by analyzing their net charge-off behavior over the past two years and find that their portfolios have become less risky. Read More
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Growth Expected to Pick Up
The effects of the Great Recession have lasted for an exceptionally long period of time. Current economic conditions, however, suggest that the economy continues to recover. Read More
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Global Factors and Domestic Inflation
Is it possible that global inflation trends may provide some useful signal for the US? Perhaps surprisingly, the answer appears to be "yes." Read More
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Reassessing the Beveridge Curve “Shift” Four Years Later
Early on in the current recovery, people were worried about a potential shift in the Beveridge curve-an empirical relationship between job openings and unemployment. With 16 more quarters of data, we see there is no shift. Read More
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Industries, Job Growth, and Poverty Trends
The shares of a county's employment that are in each major industry classification are correlated with the county's poverty rate. We examine recent changes in these correlations. Read More
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Evaluating Progress Toward the Fed's Inflation Target
Since January 2012, the Federal Open Market Committee (FOMC) has explicitly stated an inflation target of 2 percent. Determining just how close we are to the FOMC's target depends on which inflation measure we look at. Read More
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Peer-to-Peer Lending Is Poised to Grow
Peer-to-peer lending-a type of lending which matches individual borrowers with investors-is a recent innovation. Because it fills at least two gaps left by traditional lending sources, it is likely to continue growing for some time. Read More
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Bitcoin versus the Dollar
Though it's perhaps too early to assess the future of bitcoin, in terms of number of transactions, total value, and even price stability, it is not currently a major competitor of the US dollar. Read More
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State Unemployment Insurance Policy Responses during the Great Recession
During the Great Recession, state unemployment insurance systems faced unequal burdens depending on how well their accounts within the federal Unemployment Trust Fund (UTF) were funded and how severely they were hit by the recession. Read More
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Job Search Before and After the Great Recession
We compared the amount of time that unemployed workers spent searching for a job before and after the Great Recession to see if we could find evidence of rising levels of discouraged workers. Read More
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Recent Owners’ Equivalent Rent Inflation Is Probably Not a Blip
Recently, the overall rate of inflation has risen, owing partly to inflation in Owners' Equivalent Rent (OER). We estimate OER inflation over the next year and find that it is likely to remain elevated. Read More
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The Youngstown-Warren-Boardman Metropolitan Statistical Area
The Youngstown metro area has experienced a vast population decline since the 1970s, but there are signs of economic growth. Read More
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Neighborhood Gentrification during the Boom and After
During the housing boom, a number of large cities in the United States experienced redevelopment in their lower-income neighborhoods as higher-income residents moved in, a process known as gentrification. Read More
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A College Education Saddles Young Households with Debt, but Still Pays Off
Households headed by young adults who have attended college are accumulating much larger student loan debt burdens. Read More
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Tracking Recent Levels of Financial Stress - July
The Cleveland Financial Stress Index (CFSI) remained in Grade 2 or a "normal stress" period throughout the early part of second quarter 2014. Read More
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Households Ease Up on Adding New Debt
A key question for the continued economic recovery is whether household deleveraging is over. By most accounts, it is. Still, in inflation-adjusted terms, the weakness in consumer credit looks striking. Read More
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European Inflation
At its most recent policy meeting, the European Central Bank eased monetary policy because inflation had drifted well below the ECB's target. Read More
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The Evolution of Uncertainty and Risk around the FOMC’s Macroeconomic Forecasts: Back to Normal
Over the last year or so, economic conditions have begun to normalize. Meanwhile, the forecast uncertainty of FOMC participants has fallen back to more normal levels. Read More
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Inflation Expectations Stay Steady as the CPI Edges Up
Though various measures of inflation have risen lately, measures of inflation expectations suggest that the increases do not signal a persistently higher rate of inflation. Read More
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Job Polarization and the Great Recession
Jobs that involve predominantly routine tasks are being replaced by technology, while jobs that involve abstract tasks have gained ground. Jobs dominated by manual tasks have held their ground. Read More
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Annual Revisions to Pittsburgh Jobs Data Alter Picture of Local Labor Market
Initial employment statistics for states and metro areas can change significantly after the annual benchmarking process. The latest revisions offer a case in point for the Pittsburgh metro area. Read More
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Household Debt Inches Higher
Household debt began to shrink in early 2009 and dropped by nearly $1.4 trillion before bottoming out in mid-2013. According to the most recent data, consumer debt has increased in back-to-back quarters for the first time since early 2008. Read More
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Updated Policy Projections and Improvement in the Unemployment Rate
In March, the Federal Open Market Committee (FOMC) released its updated Summary of Economic Projections (SEP). Read More
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PCE and CPI Inflation: What’s the Difference?
There are two common measures of inflation in the US today: the Consumer Price Index (CPI) and the Personal Consumption Expenditures price index (PCE). The two measures, though following broadly similar trends, are certainly not identical. Read More
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What’s Behind the Decline in Tri-party Repo Trading Volumes?
Total collateral value in the tri-party repo market rose steeply after 2011, peaked toward the end of 2012, and then fell steeply. The decline may have been caused by an increase in Fed purchases and holdings of agency securities. Read More
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Tracking Recent Levels of Financial Stress - April
The Cleveland Financial Stress Index (CFSI) remained in a Grade 1 or "low stress" period throughout most of the first quarter of 2014. Read More
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Money Market Mutual Funds and Financial Stability
To assess the risk posed by money market funds to the financial system, we compare the aggregate portfolios of funds before and after the crisis and look at their liquidity positions since 2011. Read More
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Annual Revisions to Metro-Level Jobs Data Sheds New Light on Job Growth
Initial employment statistics for metropolitan areas are very preliminary. The benchmarked data released annually are far more accurate. Read More
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Methods for Evaluating Recent Trend Inflation
We construct inflation forecasts using three different measures of trend inflation to assess what each implies for the inflation outlook-and to assess whether trend inflation itself has declined in recent years. Read More
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How Fast Will Labor Productivity Grow in the Long Run?
Forecasting the long-run growth of labor productivity helps to determine the long-run growth rates of wages, per-capita income, and aggregate output. Various forecasts suggest the growth rate lies between 1.63 percent and 2.05 percent. Read More
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Household Credit Shifts Higher; Debt Burden Continues to Decline
During the last recession, the aggregate level of household credit began to fall, raising concerns about the prospects for the recovery. Finally, in the last two quarters of 2013, the total level of outstanding household credit has begun to rebound. Read More
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Airline Hubs and Air Traffic Trends
Consolidation of air carriers has caused a steady retreat of hubs from mid-sized metropolitan areas like those of the Fourth District. Read More
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What’s Up in Inflation? Shelter and OER
An important factor behind recent increases in inflation has been an upward trend in inflation in the shelter component of the CPI. Read More
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Is a Neighborhood’s Unemployment Rate Influenced by its Metro Area?
We looked at unemployment and income data by neighborhood in the 100 largest US metro areas to see if we could identify any factors that help explain differences in employment conditions that are observed within metro areas. Read More
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The Ups and Downs of Inventory Investment
Recently, investment in inventories, as measured by a statistic called the change in private inventories (CIPI), has been strong. It accounted for almost 30 percent of GDP growth over the second half of 2013. Read More
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Private Fixed Investment’s Recovery: Not So Bad After All
Back in November 2012, private fixed investment appeared to have stalled. Including current data changes the picture. Overall, investment now appears to have been recovering faster than GDP since 2010:Q4. Read More
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Consumer Spending Reflects New Priorities after the Recession
Accounting for approximately 70 percent of the nation's GDP, personal consumption expenditures represent the backbone of the American economy. Read More
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Expectations Stay Anchored in Spite of Declining Inflation
Over the past month, the yield curve has moved up, getting somewhat steeper in the process, as long rates moved more than short rates. Read More
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Tracking Recent Levels of Financial Stress - January
The Cleveland Financial Stress Index (CFSI) has trended down throughout the fourth quarter of 2013 and early this year Read More
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Employee Compensation Costs During the Recovery
The Federal Reserve's two mandates-to keep inflation under control and to promote employment growth-overlap when it comes to employee compensation. Read More
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Household Financial Conditions
Household assets have been growing sharply since 2011. Though a similar boom preceded the Great Recession, we don't think the current trend is worrisome; it is not being carried on the shoulders of overextended consumers. Read More