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144 posts on "Macroecon"

October 16, 2017

Discretionary Services Spending Has Finally Made It Back (to 2007)



LSE_2017_Discretionary Services Spending Has Finally Made It Back (to 2007)

The current economic expansion is now the third-longest expansion in U.S. history (based on National Bureau of Economic Research [NBER] dating of U.S. business cycles). Even so, average growth in this expansion—a 2.1 percent annual rate—has been extraordinarily weak. In this post, I return to previous analysis on a specific portion of consumer spending—household discretionary services expenditures—that has displayed unusual weakness in the current expansion (see this post for the definition of discretionary versus nondiscretionary services expenditures, and these posts from 2012 and 2014 for previous updates). Even though these expenditures have picked up over the past couple of years, such that they have finally exceeded their previous peak, their recovery remains well behind that of other major categories of consumer spending. One explanation for the slow growth of spending on discretionary services is that households are concerned about their future income.

Continue reading "Discretionary Services Spending Has Finally Made It Back (to 2007)" »

Posted by Blog Author at 7:00 AM in Great Recession, Macroecon | Permalink | Comments (2)

September 08, 2017

The New York Fed DSGE Model Forecast—August 2017



This post presents our quarterly update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since May 2017.

Continue reading "The New York Fed DSGE Model Forecast—August 2017" »

Posted by Blog Author at 7:00 AM in DSGE, Forecasting, Macroecon, Monetary Policy | Permalink | Comments (0)

June 26, 2017

Low Productivity Growth: The Capital Formation Link



Editor’s note: The labels on the y-axis of the chart “Nonfarm Business Sector: Real Output per Hour of All Persons” have been corrected. (June 26, 2017, 11:56 a.m.)

LSE_2017_Productivity-factory_GettyImages-184924253_460x288

A major economic concern is the ongoing sluggishness in the growth of output per worker hour, generally called labor productivity. In an arithmetic sense, the growth of the economy can be accounted for by the increase in hours worked plus that of labor productivity. With the unemployment rate now at a level widely regarded as near “full employment,” growth in hours worked is likely to be limited by demographic forces, most importantly the very limited expansion of the working-age population. If productivity growth also remains low, the sustainable pace of increase of real GDP will be limited and remain noticeably lower than historic norms.

Continue reading "Low Productivity Growth: The Capital Formation Link" »

Posted by Blog Author at 7:00 AM in Macroecon | Permalink | Comments (1)

June 16, 2017

Hey, Economist! How Do You Forecast the Present?



LSE_Hey, Economist! How Do You Forecast the Present?

New York Fed macroeconomists have been sharing their “nowcast” of GDP growth on the Bank’s public website since April 2016. Now, they’ve launched an interactive version of the Nowcasting Report, which updates the point forecast each week, but also helps users better visualize the impact of the flow of incoming data on the estimate produced by the model. Tables offer more detail on the data series informing the estimate. The interactive version also reports the staff nowcast back to January 2016, a longer nowcast history than has previously been available. Cross-media editor Anna Snider spoke to Domenico Giannone, Argia Sbordone, and Andrea Tambalotti—economists who developed the model underlying the report and produce estimates weekly with the help of research analysts Brandyn Bok and Daniele Caratelli—about nowcasting and its role in the policymaking process.

Continue reading "Hey, Economist! How Do You Forecast the Present?" »

Posted by Blog Author at 11:15 AM in Forecasting, Hey, Economist!, Macroecon | Permalink | Comments (0)

May 31, 2017

The New York Fed DSGE Model Forecast—May 2017



This post presents our quarterly update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since February 2017. As usual, we wish to remind our readers that the DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. For more information about the model and variables discussed here, see our DSGE Model Q & A.

Continue reading "The New York Fed DSGE Model Forecast—May 2017 " »

Posted by Blog Author at 7:00 AM in Macroecon, Monetary Policy | Permalink | Comments (0)

May 22, 2017

Measuring Trend Inflation with the Underlying Inflation Gauge



LSE_Measuring_trend_inflations_GettyImages-504013074_460x288

Consumers, financial market participants, and policymakers are particularly interested in the trend, or persistent, component of inflation. But this variable is not observed, which has resulted in a variety of proposed proxy measures. Because each measure has its own strengths and weaknesses, a consensus about a preferred candidate has not emerged. Here, we introduce the Underlying Inflation Gauge (UIG) as a measure of trend inflation. Among its attractive features, the UIG is derived from a large data set that extends beyond price variables and displays greater forecast accuracy than various measures of core inflation.

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Posted by Blog Author at 7:00 AM in Forecasting, Inflation, Macroecon | Permalink | Comments (8)

April 05, 2017

How Do People Find Jobs?



LSE_How Do People Find Jobs?

Most people find themselves looking for work at some point in their adult lives. But what brings employers and job seekers together? And does searching for a new job while unemployed lead to different outcomes than searching while employed? Little is known about the job search process for unemployed workers. Even less is known about the search process and outcomes for currently employed workers—so‑called “on‑the‑job” search. This Liberty Street Economics post aims to shed light on these questions and to draw some conclusions for our understanding of labor market dynamics more generally.

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Posted by Blog Author at 7:00 AM in Labor Economics, Macroecon | Permalink | Comments (0)

March 22, 2017

The Need for Very Low Interest Rates in an Era of Subdued Investment Spending



LSE_2017_The Need for Very Low Interest Rates in an Era of Subdued Investment Spending

Why have interest rates stayed low for so long after the financial crisis—and will they remain low for the foreseeable future? One way to answer these questions is to use the accounting identity that global saving must equal physical investment spending and argue that low rates have been necessary to prop up investment spending enough to match saving. From this perspective, the extent of any recovery in interest rates depends on whether weak investment spending is driven primarily by secular demographic trends that are a long-term drag on aggregate demand or by the residual effects of the financial crisis.

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Posted by Blog Author at 7:00 AM in International Economics, Macroecon | Permalink | Comments (5)

February 17, 2017

The FRBNY DSGE Model Forecast—February 2017



This post presents the latest update of the economic forecasts generated by the Federal Reserve Bank of New York’s (FRBNY) dynamic stochastic general equilibrium (DSGE) model. We introduced this model in a series of blog posts in September 2014 and published forecasts twice a year thereafter. With this post, we move to a quarterly release schedule, and highlight how our forecasts have changed since November 2016.

Continue reading "The FRBNY DSGE Model Forecast—February 2017" »

Posted by Blog Author at 7:00 AM in Forecasting, Macroecon, Monetary Policy | Permalink | Comments (0)

February 13, 2017

How Resilient Is the U.S. Housing Market Now?



LSE_How Resilient Is the U.S. Housing Market Now?


Housing is by far the most important asset for most households, and, not coincidentally, housing debt dwarfs other household liabilities. The relationship between housing debt and housing values figures significantly in financial and macroeconomic stability, as events during the housing bust of 2006-12 clearly demonstrated. This week, Liberty Street Economics presents five posts touching on various aspects of housing, from the changing relationship between mortgage debt and housing equity to the future of homeownership. In today’s post, we provide estimates of housing equity and explore how vulnerable households are to declines in house prices, using methods introduced in our paper “Tracking and Stress Testing U.S. Household Leverage.”

Continue reading "How Resilient Is the U.S. Housing Market Now?" »

Posted by Blog Author at 7:00 AM in Financial Institutions, Household Finance, Macroecon | Permalink | Comments (1)
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