Charting the Economy
Timely economic data curated by research staff at the Federal Reserve Bank of Kansas City.
June 2, 2023
Prices charged by publicly traded firms grew less than their costs in 2022, even though inflation remained high
By Andrew Glover, José Mustre-del-Río, and Alice von Ende-Becker
Sources: U.S. Bureau of Economic Analysis (Federal Reserve Bank of St. Louis FRED), Compustat, and authors’ calculations.
Growth in the average markup of publicly traded firms (that is, the price firms charge above their costs) fell sharply from 3.2 percent in 2021 to −0.7 percent in 2022. This decline could have substantially reduced inflation if firms’ costs had remained constant, since inflation is the sum of markup growth plus growth in the marginal cost of production. However, the pace of inflation—as measured by the price index for personal consumption expenditures (PCE)—fell by only 0.7 percentage points, suggesting rapid cost growth drove inflation in 2022.
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June 2, 2023
Many money market funds have invested heavily in the Fed’s Overnight Reverse Repurchase Facility
By Stefan Jacewitz and Blake Marsh
Note: Chart shows ON RRP take-up by participating money market funds in April 2023. Total ON RRP investments are currently limited to $160 billion per fund.
Sources: U.S. Securities and Exchange Commission and authors’ calculations
The Federal Reserve’s Overnight Reverse Repurchase Facility (ON RRP) has become increasingly important to the business model of many eligible money market funds because it provides a safe investment with competitive returns. The chart above shows each participating money market fund’s ON RRP investment compared with their total investments. Dots close to the 45° line indicate funds with nearly all of their investments in the ON RRP. As of April 2023, many funds kept most, and sometimes nearly all, of their investments in the ON RRP.
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May 19, 2023
Wage Growth Is Softening for Job Switchers, but Remains Steady for Stayers
Sources: Federal Reserve Bank of Atlanta and author’s calculations.
Starting in mid-2021, median wage growth accelerated across job mobility categories in the same order as in prior expansions: first for job and industry switchers (orange line), then for job switchers who remained in the same industry (green line), and finally for stayers (blue line). More recently, wage growth of switchers—particularly those who also switched industries—has been the first category to decline, again consistent with historical patterns. Thus, an overall moderation in wage growth may take some time, as wage growth for the bulk of the employed, job stayers, is generally the last to react.
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May 17, 2023
Home Prices Remain Near Their Peak, Boosting Single-Family Construction
Note: Count of permits and Zillow Home Value index are through April 2023; S&P Case-Shiller and FHFA indexes are through February 2023.
Sources: U.S. Census Bureau, Standard & Poor’s, and Federal Housing Finance Agency (FHFA). All data sources accessed via Haver Analytics.
New permits to construct single-family homes (blue line) climbed for the third straight month in April, increasing 14 percent from their trough in January. This marks a partial reversal from their collapse during 2022 and reflects the surprising resilience of home prices (green, orange, and purple lines). Although the sharp run-up in interest rates has exerted strong downward pressure on prices, this pressure has thus far been offset by current homeowners’ reluctance to sell and give up their low-rate mortgages. As a result, home builders face less competition and so can maintain high profit margins.
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May 16, 2023
Sharp Decline in Online Job Postings for Job Recruiters Could Signal a Softening Labor Market
By Elior Cohen
Notes: The mean online job postings for human resource specialist (recruiter) per month in 2019 was 30,848. Overall online job posting data is from the Conference Board’s Help Wanted Online Index (HWOL).
Sources: Lightcast and the Conference Board.
Online job postings have been persistently high compared with pre-pandemic levels (blue line), reflecting heightened labor demand. In contrast, after peaking in 2022, online postings for job recruiters have fallen sharply over the past year and are 20 percent below 2019 levels as of April 2023 (green line). The decline in recruiter postings may suggest that fewer employers are interested in recruiting new workers or that hiring new workers has become easier. Because having fewer recruiters may lead to fewer job openings in the coming months, this decline could signal that the labor market is softening.
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May 15, 2023
The LMCI-Implied Unemployment Rate Suggests Actual Unemployment May Begin to Rise
By José Mustre-del-Río and Emily Pollard
Sources: U.S. Bureau of Labor Statistics; Federal Reserve Bank of Kansas City; Glover, Mustre-del-Río, and Pollard (2021); and authors’ calculations.
Despite some signals of labor market slackening, the unemployment rate (blue line) has shown little upward movement over the past several months. However, the Kansas City Fed’s Labor Market Conditions Indicators (LMCI) unemployment rate (green line) suggests some loosening has begun. This alternative measure of the unemployment rate (updated from Glover, Mustre-del-Río, and Pollard 2021) began rising early in 2022 and now stands at 4.1 percent. Historically, turning points in this alternative measure have preceded turning points in the official measure, suggesting actual unemployment may begin to rise.