What Has Driven the Recent Increase in Retirements?
By Jun Nie and Shu-Kuei X. Yang
August 11, 2021
The share of retirees increased during the pandemic—not because more employees retired but because fewer retirees transitioned back to work.
Incorporating financial market conditions along with current macroeconomic conditions in forecasts of GDP growth can improve forecast accuracy.
A year into the pandemic, differences in work-from-home behavior across income, race, and education persist.
The Evolving Relationship between COVID-19 and Financial Distress
By Kartik Athreya, José Mustre-del-Río, Juan M. Sánchez and Olivia Wilkinson
February 24, 2021
Regions with higher financial distress have seen larger shares of COVID-19 infections and deaths during most of the pandemic.
Consumer Spending Declines, Shifts in Response to the Pandemic
By Alison Felix and Samantha Shampine
February 17, 2021
The spread of COVID-19 dramatically reduced spending and altered the mix of goods and services that consumers purchase.
After the pandemic, a shift to hybrid officing may encourage suburban employers to move their offices closer to city centers.
Pandemic Relief Has Aided Low-Income Individuals: Evidence from Alternative Financial Services
By Ying Lei Toh and Thao Tran
December 30, 2020
The use of alternative financial services has declined among low-income individuals during the pandemic, suggesting relief efforts may have helped them.
PPP Raised Community Bank Revenue but Lowered Profitability
By W. Blake Marsh and Padma Sharma
December 23, 2020
Participation in the Paycheck Protection Program boosted community banks’ revenue but lowered profitability, at least initially.
Americans’ precautionary motives to save in 2020 may dampen future consumption.
U.S. Business Applications Surge in the Face of COVID-19
By Jason P. Brown
November 18, 2020
Applications for new businesses have surged in recent months, reversing a decades-long decline.
U.S. Federal Debt Has Increased, but Appears Sustainable for Now
By Huixin Bi, Wenyi Shen and Shu-Chun S. Yang
November 16, 2020
The current federal debt level of almost 100 percent of GDP does not threaten fiscal sustainability.
The pandemic led to losses in “teleworkable” jobs in addition to jobs that could not be performed from home.
COVID-19 Poses Risks for State and Local Public Pensions
By Alison Felix
August 19, 2020
The current crisis may further strain public pension funding, which has not yet fully recovered from past recessions.
Forward guidance about future interest rates could deliver much, though not all, of the policy accommodation of yield curve control.
Federal Reserve interventions calmed Treasury markets after stress from the coronavirus outbreak, according to one measure of Treasury market pressure.
Recent data suggest signs of improvement after the economic downturn, though a timeline for recovery remains uncertain.
Understanding the Recent Rise in Municipal Bond Yields
By Huixin Bi, W. Blake Marsh, Jacob Dice and Chaitri Gulati
May 27, 2020
The municipal bond sell-off in late March likely reflected investors’ concerns over liquidity rather than credit risk.
State and local governments face liquidity challenges from the coronavirus pandemic in the near term, with substantial budget cuts likely in the next fiscal year.
Elements of the recent period of financial stress can be explained as a run on “shadow banks,” which lack the safeguards of regulated depository institutions.
Women Take a Bigger Hit in the First Wave of Job Losses due to COVID-19
By Didem Tuzemen and Thao Tran
April 16, 2020
Women have experienced more job losses due to COVID-19.
While the 10-year Treasury note and gold have been safe-haven assets in the past, Bitcoin has never behaved like a safe haven.
Statistical models suggest the coronavirus outbreak may have reduced China’s first-quarter real GDP by an annualized rate of 32 percent.
Inflation Expectations Limit the Power of Negative Interest Rates
By Andrew Glover and Emily Pollard
March 25, 2020
The effects of negative interest rates depend in part on inflation expectations.
Women Are Driving the Recent Recovery in Prime-Age Labor Force Participation
By Didem Tüzemen and Thao Tran
December 18, 2019
College-educated women have driven the recent rebound in the prime-age labor force participation rate.
As manufacturing activity declines, consumers in manufacturing-heavy states are cutting back on purchases.
Rainy Day Funds Have Grown as State Tax Revenue Strengthens
By Huixin Bi and Jaeheung Bae
October 16, 2019
States have used recent tax revenue increases to shore up rainy day funds.
Assessing the Risk of Extreme Unemployment Outcomes
By Thomas R. Cook and Taeyoung Doh
August 28, 2019
The risk of unexpectedly high unemployment three years in the future has declined from its Great Recession peak.
How Have Banks Responded to Declining Reserve Balances?
By W. Blake Marsh and Rajdeep Sengupta
August 21, 2019
With reserve balances declining, banks are increasing their holdings of other high-quality liquid assets.
Rural Hospital Closures and Growth in Employment and Wages
By Kelly D. Edmiston
July 16, 2019
Rural hospital closures are associated with substantially lower growth in county employment and aggregate wages.
Escaping the housing shortage will likely require a sustained shift toward multifamily construction, the freeing up of single-family homes, and the faster relative growth of medium-sized cities.
Drilling Productivity in the United States: What Lies Beneath
By Jason P. Brown, David Rodziewicz and Colton Tousey
May 22, 2019
Drilling productivity increased sixfold from the mid-2000s to early 2017, driven largely by gains in below-ground efficiency.
A brief spike in market-based uncertainty near the end of 2018 could have long-lasting effects on the macroeconomy.
Introducing the KC Fed Economic Bulletin
By Willem Van Zandweghe
April 10, 2019
The Macro Bulletin has a new name and focus. The publication’s editor-in-chief, Willem Van Zandweghe, introduces the KC Fed Economic Bulletin and discusses the publication’s expanded scope.
The Outlook for Farmland Values amid Higher Interest Rates
By Cortney Cowley and Nathan Kauffman
April 10, 2019
A reduced spread between interest rates and returns to farmland—along with an increase in farmland sales—suggest farmland values could decline further in 2019.
A lower interest rate on reserves would allow policymakers to operate with a smaller balance sheet.
Syndicated loan spreads have declined across all loan and borrower types, but the decline has been more pronounced for highly leveraged borrowers and term loans.
Do Changes in the Stock Market Affect Consumer and Business Confidence?
By Willem Van Zandweghe
January 09, 2019
Stock market surprises influence consumer and business confidence, with potential effects on real spending.
Low productivity growth largely accounts for the recent period of low wage growth.
After declining for a decade, the labor share of income seems to have stabilized recently, reflecting an increased share of services industries income paid to workers.
States are better prepared to meet their own budgetary shortfalls in the event of a downturn than the shortfalls of households.
A revised measure of the Kansas City Financial Stress Index using the Treasury repo rate closely tracks the previous version using the London Interbank Offered Rate.
How Much Would China’s GDP Respond to a Slowdown in Housing Activity?
By Thomas R. Cook, Jun Nie and Aaron Smalter Hall
September 12, 2018
China’s GDP has become more sensitive to declines in real estate activity and housing-related construction.
Auto Loan Delinquency Rates Are Rising, but Mostly among Subprime Borrowers
By Jason P. Brown and Colton Tousey
August 15, 2018
Although auto debt and delinquency rates have increased over the past few years, the credit quality of auto debt has actually improved.
Understanding Hawks and Doves
By George A. Kahn and Amy Oksol
June 27, 2018
Hawks in the FOMC project higher inflation than doves even though their projections assume a tighter path for monetary policy.
Nominal Wage Rigidities and the Future Path of Wage Growth
By José Mustre-del-Río and Emily Pollard
May 10, 2018
Wage growth may remain subdued in the near future, in line with a high share of workers whose wages have not changed.
Why Has Inflation Persistence Declined?
By Takushi Kurozumi and Willem Van Zandweghe
April 11, 2018
Inflation persistence fell in the 1980s due to the lower trend inflation rate that the Volcker disinflation produced.
Resurging energy production and booming energy exports could help reduce the U.S. trade deficit by 5 percent by the end of 2018.
Expectations for long-run inflation became better anchored after the Federal Open Market Committee adopted its 2 percent target.
Housing construction is struggling to meet pent-up demand, suggesting rents and home prices will continue to rise in 2018.
Characterizing the 2014–16 Slowdown in Investment
By Andrew Foerster
December 20, 2017
The investment sector experienced an unusual, isolated recession during 2014–16, a period when the overall economy was in an expansion.
A New Estimate of the Natural Rate of Unemployment
By Didem Tüzemen
November 29, 2017
A new estimate of the natural rate of unemployment suggests demographic and technical changes lowered the natural rate to 4.6 percent.
The average consumer credit score reached a record high recently, due in large part to an aging population.
Examining the Recent Shift in State and Local Pension Plans to Alternative Investments
By Huixin Bi and Trenton Herriford
August 30, 2017
State and local pension plans are increasingly turning to alternative investments, but underfunding only partially explains this shift.
A new measure of Chinese economic activity shows its momentum increased in the first half of the year; however, this momentum may not be sustainable.
Subsiding Headwinds from the Strong Dollar: Evidence from Producer Prices along the Supply Chain
By George A. Kahn and Nicholas Sly
July 13, 2017
The foreign exchange value of the U.S. dollar has stabilized, and producer prices are rising, especially at early stages of the supply chain.
Does the Recent Decline in Household Longer-Term Inflation Expectations Signal a Loss of Confidence in the FOMC?
By Brent Bundick, A. Lee Smith, Trenton Herriford and Emily Pollard
June 21, 2017
Households have lowered their longer-term inflation outlooks, but they appear confident in the FOMC’s ability to achieve stable prices.
Changes in the Federal Reserve’s balance sheet only modestly substitute for changes in the federal funds rate.
Waiting for a Pickup: GDP and the Sharing Economy
By Michael Redmond
April 19, 2017
Current measures of GDP may understate the contributions from ridesharing platforms and other dimensions of the sharing economy—a small but growing oversight for the national accounts.
A limited supply of housing available for sale or rent is significantly dampening household formation.
Wage Leaders and Laggards: Decomposing the Growth in Average Hourly Earnings
By Willem Van Zandweghe
February 15, 2017
Wage growth has accelerated gradually over the past two years, but only a few industries have driven the trend.
Stuck in Part-Time Employment
By Jonathan L. Willis
January 18, 2017
Although the share of workers employed part time for economic reasons has declined, it is unlikely to return to its pre-recession level in the near future.
PDFConsumer Price Inflation and Rising Rents in the West
By Jordan Rappaport and Michael Redmond
December 19, 2016
Rising home rents in four western metros have increasingly boosted consumer price inflation.
PDFHow Does a Rise in International Shipping Costs Affect U.S. Inflation?
By Nicholas Sly, A. Lee Smith, Trenton Herriford and Elizabeth M. Johnson
December 01, 2016
Trenton Herriford, Elizabeth M. Johnson, Nicholas Sly, and A. Lee Smith find that an increase in ocean shipping costs leads to a modest boost in core inflation after one year.
PDFWhat is Behind the Recent Increase in Labor Force Participation?
By Didem Tüzemen and Jonathan L. Willis
November 14, 2016
Didem Tüzemen and Jonathan L. Willis find that the recent increase in labor force participation is due not to more workers entering the labor force, but to fewer workers exiting it.
Jordan Rappaport suggests supply-side factors will continue to constrain single-family home construction and sales into 2017.
Craig S. Hakkio and Nicholas Sly find that increased global uncertainty after Brexit will be a major concern for the United Kingdom, a modest concern for the euro area, and a minor concern for the United States.
PDFTracking Consumer Credit Trends
By Troy Davig and William Xu
August 23, 2016
Troy Davig and William Xu find that a larger share of consumers with low credit scores are increasing their debt than those with high credit scores.
PDFThe Drag of Energy and Manufacturing on Productivity Growth
By Willem Van Zandweghe
April 18, 2016
Willem Van Zandweghe finds a decline in manufacturing and mining activity has slowed overall productivity growth.
PDFMonetary Policy at the Zero Lower Bound: Revelations from the Summary of Economic Projections
By George A. Kahn and Andrew Palmer
April 06, 2016
George A. Kahn and Andrew Palmer assess how FOMC participants' projections that policy would lift off from its effective lower bound related to their projections for inflation and unemployment.
PDFFlowing into Employment: Implications for the Participation Rate
By José Mustre-del-Río, William Xu and Michael Redmond
April 01, 2016
José Mustre-del-Río, Michael Redmond, and William Xu find more prime-age individuals are flowing into employment from outside the labor force, though effects on the participation rate could be limited by educational attainment.
PDFThe Lasting Damage from the Financial Crisis to U.S. Productivity
By Willem Van Zandweghe and Michael Redmond
March 29, 2016
Michael Redmond and Willem Van Zandweghe find that tight credit conditions during the 2007–09 financial crisis dampened productivity, leaving it on a lower trajectory.
Jordan Rappaport finds that a limited supply of single-family homes will continue to constrain home sales and put upward pressure on home prices over the next few years.
PDFThe Reallocation of Energy-Sector Workers after Oil Price Booms and Busts
By Jason P. Brown and Andres Kodaka
March 03, 2016
Jason P. Brown and Andres Kodaka compare recent job losses in the mining sector with those that occurred during the Great Recession and find displaced workers had an easier time finding new jobs in 2015 than they did during the recession.
Jun Nie constructs an alternative measure to evaluate the strength of Chinese GDP growth and identifies potential risks to China’s growth in the near term.
A. Lee Smith finds that recent declines in inflation may be due to historically large movements in oil prices and the foreign exchange value of the dollar.
PDFEstimating the Monetary Policy Rule Perceived by Forecasters
By Brent Bundick
December 28, 2015
Brent Bundick examines whether the FOMC’s implicit monetary policy rule, as perceived by professional forecasters, changed when the federal funds rate reached its effective lower bound.
PDFLong-Term Survey-Based Inflation Expectations Have Become Better Anchored
By Craig S. Hakkio
October 06, 2015
Craig S. Hakkio finds that while the median of some long-term inflation forecasts has declined, the distribution of individual forecasts suggests long-term inflation expectations have in fact become better anchored.
Troy Davig, Nida Çakır Melek, Jun Nie, Lee Smith, and Didem Tüzemen find changes in expectations of future oil supply relative to demand are the main drivers of the recent oil price decline.
Jun Nie and Nicholas Sly examine recent trends in capital flows from China and the implications for the United States.
A. Lee Smith and Thealexa Becker compare forward guidance announcements with changes in the effective federal funds rate and find the two policy measures have had similar macroeconomic effects.
PDFMonetary Policy and Firm Entry and Exit
By Yoonsoo Lee and Willem Van Zandweghe
August 20, 2015
Yoonsoo Lee and Willem Van Zandweghe find unusually accommodative monetary policy reduces the reallocation of capital and workers from exiting firms to new ones, potentially slowing productivity growth.
PDFTaylor Rules or Target Rules?
By George A. Kahn
August 17, 2015
George A. Kahn assesses whether the Federal Open Market Committee's policy actions are better characterized as following a policy-rule or target-rule approach.
PDFDo Monetary Policy Shocks Affect Trend Labor Productivity?
By Willem Van Zandweghe
August 10, 2015
Willem Van Zandweghe examines whether monetary policy has had long-lasting effects on labor productivity and potential output.
PDFThe Effect of the U.S. Energy Boom on the Trade Deficit
By Craig S. Hakkio and Jun Nie
July 20, 2015
Craig S. Hakkio and Jun Nie predict the real energy trade deficit will decline at a much slower pace in 2015 than in the past few years.
PDFHas the U.S. Economy Become Less Interest Rate Sensitive?
By Jonathan L. Willis and Guangye Cao
July 08, 2015
Jonathan L. Willis and Guangye Cao investigate shifts in the economy’s sensitivity to interest rates by examining how total employment responds to changes in monetary policy.
Jordan Rappaport analyzes the forces driving the recent rebound in multifamily construction.
PDFConfident about Quitting: Job Leavers and Labor Market Optimism
By José Mustre-del-Río and William Xu
June 08, 2015
Mustre-del-Río and Xu compare two measures of voluntary turnover and find job quitters have recently become more optimistic about their employment opportunities.
PDFOpportunity Knocks: Improved Matching of Jobs and Workers
By Didem Tüzemen and Jonathan L. Willis
May 13, 2015
Tüzemen and Willis illustrate that over the past year, workers found jobs more closely matched to their educational attainment.
Melek estimates the effects of the recent oil price decline on 2015 oil production.
The authors use survey data to evaluate the stability of forecasters' long-term inflation expectations.
PDFShould Monetary Policy Monitor Risk Premiums in Financial Markets?
By Taeyoung Doh, Guangye Cao and Daniel Molling
February 26, 2015
The authors examine whether risk premiums can predict future economic growth and whether monetary policy can influence risk premiums.
PDFFollowing the Leaders: Wage Growth of Job Switchers
By José Mustre-del-Río
December 19, 2014
José Mustre-del-Río analyzes labor market conditions to find increasing competitive pressures have led to strong wage growth for job switchers.
PDFAccounting for Changes in the U.S. Budget Deficit
By Troy Davig and Michael Redmond
December 04, 2014
Davig and Redmond gauge the contributions of three factors to the declining U.S. federal budget deficit.
PDFDoes Health Care Reform Support Self-Employment?
By Didem Tüzemen and Thealexa Becker
September 24, 2014
Tüzemen and Becker study the Massachusetts Health Care Reform Act and find the reform may have supported self-employment in the state.
PDFThe Asymmetric Effects of Uncertainty on Employment
By Andrew Forester
September 04, 2014
Foerster examines three periods of heightened stock market volatility during the economic recovery to find uncertainty may have slowed employment growth.
PDFKansas City Fed's Labor Market Conditions Indicators (LMCI)
By Jonathan L. Willis and Craig S. Hakkio
August 28, 2014
Craig S. Hakkio and Jonathan L. Willis update the Kansas City Fed’s Labor Market Conditions Indicators and assess labor market improvements and momentum.
Jun Nie and Guangye Cao examine the slowdown in China's real estate sector and suggest additional policy stimulus may be needed to meet the country's 2014 target for GDP growth.
Troy Davig and José Mustre-del-Río evaluate current wage growth and find wages are not only rising at a pace consistent with the last expansion, but likely to rise further as the labor market improves.
PDFEvaluating Monetary Policy at the Zero Lower Bound
By Craig S. Hakkio and George A. Kahn
July 21, 2014
Craig S. Hakkio and George A. Kahn compare a "shadow" federal funds rate to prescriptions from an estimated policy rule and find policy was not sufficiently accommodative after the recession but became more accommodative over time.
PDFTight Credit Conditions Continue to Constrain the Housing Recovery
By Jordan Rappaport and Paul Willen
July 07, 2014
The housing recovery has continued to struggle to gain traction. The vigilance with which lenders have been applying stricter lending standards suggests regulatory uncertainty may be playing a role.
PDFEvolving Market Perceptions of Federal Reserve Policy Objectives
By George A. Kahn and Lisa Taylor
March 31, 2014
Despite varying interpretations of the Fed's monetary policy mandate, the response of long-term rates to economic news remains relatively stable, suggesting markets perceive little change in policy objectives under different regimes.
PDFThe Global Impact of U.S. Monetary Policy
By Travis Berge and Guangye Cao
March 04, 2014
Travis Berge and Guangye Cao assess the effects of U.S. monetary policy on asset prices in 50 countries. They find a similar reaction of asset prices to conventional and unconventional monetary policies.
PDFConsumer Debt Dynamics: An Update
By John Carter Braxton and Troy Davig
February 18, 2014
Is the trend of contracting of consumer debt turning? Outstanding consumer debt and the fraction of consumers with increasing debt grew in the last half of 2013, mainly fueled by those with low credit scores borrowing to buy autos.
PDFThe Long-Term Outlook for U.S. Residential Construction
By Jordan Rappaport
December 20, 2013
The recovery of U.S. housing construction paused during the first half of 2013. Stronger growth is likely to resume in the near term. But over the long term, home construction is likely to contract as aging baby boomers downsize.
PDFThe Impact of an Aging Population on State Tax Revenues
By Alison Felix and Kate Watkins
December 05, 2013
People tend to earn less and spend less when they retire. As the baby boom generation retires, the aging of the U.S. population will likely reduce state governments’ revenue per capita from income taxes and sales taxes significantly.
PDFThe Weakened Influence of Low Interest Rates on Durable Goods Spending
By Willem Van Zandweghe and John Carter Braxton
November 19, 2013
Despite record-low interest rates, the pace of the current economic recovery has been only moderate. One reason is that the positive impact of lowered interest rates on consumer purchases of durable goods has diminished.
PDFU.S. Exports and Foreign Economic Growth: Which Regions Matter Most?
By Jun Nie and Lisa Taylor
November 05, 2013
U.S. export growth tends to vary with changes in different foreign regions' economic growth rates. This article estimates how much change in U.S. export growth may be associated with a rise or fall in a given region's GDP growth.
PDFHas The Effect of Monetary Policy Announcements On Asset Prices Changed?
By Taeyoung Doh and Michael Connolly
September 04, 2013
The Federal Reserve has increased communication about the future path of the federal funds target rate over time. The use of forward guidance as a policy tool has raised questions about changes in how it influences the economy.
PDFThe Shadow Labor Supply and Its Implications for the Unemployment Rate
By Troy Davig and José Mustre-del-Río
August 19, 2013
The number of people wanting work, but not looking for a job, has swelled in recent years. However, their flow rate back into unemployment has been declining, so they will likely only have a modest impact on the unemployment rate.
PDFAssessing Labor Market Conditions: The level of activity and the speed of improvement
By Craig S. Hakkio and Jonathan L. Willis
July 18, 2013
To help assess labor market conditions, two measures are proposed that show that the pace of improvement has recently increased, but two more years of similar improvement are needed to return conditions to historical averages.