Economy at a Glance :: Federal Reserve Bank of Cleveland

Economy at a Glance

Executive Summary

The latest batch of labor market data was encouraging. Nonfarm payrolls increased 244,000 in April, pushing the average gain over the past three months to 233,000. This compares very favorably to the 12-month average increase, which was only 109,000. Government payrolls continued to shrink, while …  Executive Summary
The latest batch of labor market data was encouraging. Nonfarm payrolls increased 244,000 in April, pushing the average gain over the past three months to 233,000. This compares very favorably to the 12-month average increase, which was only 109,000. Government payrolls continued to shrink, while the gains in private payrolls were broad-based across industries. On the household side of the survey, the news was less encouraging, with the unemployment rate climbing back up to 9 percent.

The Bureau of Economic Analysis estimates that real GDP grew at a modest 1.8 percent annualized rate in the first quarter of 2011, down from a pace of 3.1 percent in the fourth quarter of 2010. This stands in contrast to the latest employment numbers, perhaps revealing that while activity was relatively anemic in the first quarter, we are set for an increase in the second. This substantial deceleration owes much to reductions in defense spending, nonresidential structures, as well as to increases in imports. The behavior of defense spending and imports is likely to be temporary, while just this week, the Census Bureau released encouraging numbers for private nonresidential construction spending in March.

Inflation, as measured by the CPI, was at 2.7 percent year-over-year in March, while the less volatile core measure that excludes food and energy stood at 1.2 percent. The PCE measures also reflected this acceleration in food and energy prices, as the headline PCE index in the first quarter of 2011 grew at an annualized rate of 3.8 percent from the fourth quarter of 2010, while the core measure grew only 1.5 percent. In light of these numbers, the Federal Board of Governors at its April 26-27 FOMC meeting kept the target range for the federal funds rate at 0 to 1/4 percent and maintained its commitment to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011.  [2011-05-06]  Executive Summary

Regional Economics   


Labor Markets, Unemployment, and Wages   

International Markets and Foreign Exchange