Liberty Street Economics

Liberty Street Economics

Look for our next post on December 12.

May 22, 2024

Veterans in the Labor Market: 2024 Update

Rajashri Chakrabarti, Dan Garcia, and Maxim Pinkovskiy

Photo: people in army fatigues lined up single file looking at their backs with the hands clasped behind them.

Veterans constitute a significant segment of the male labor force, and understanding labor market disparities between veterans and non‑veterans is an important component of studying disparities in the economy as a whole. In a previous Liberty Street Economics post, we have shown that even relative to a group of comparable non-veterans, veterans have lower employment and labor force participation rates. One year later, we see that veterans continue to experience lower labor market attachment and the employment gap has widened, though the earnings gap has closed.

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Posted at 9:30 am in Labor Market | Permalink | Comments (2)
May 21, 2024

The Changing Landscape of Corporate Credit

Nina Boyarchenko and Leonardo Elias

Photo: upward looking at tall glass skyscrapers that are corporate offices against a blue sky.

Firms’ access to credit is a crucial determinant of their investment, employment, and overall growth decisions. While we usually think of their ability to borrow as determined by aggregate credit conditions, in reality firms have a number of markets where they can borrow, and conditions can vary across those markets. In this post, we investigate how the composition of debt instruments on U.S. firms’ balance sheets has evolved over the last twenty years. 

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Posted at 7:00 am in Banks, Corporate Finance, Credit, Financial Intermediation | Permalink
May 20, 2024

Supply Chain Disruptions Have Eased, But Remain a Concern 

Jaison R. Abel and Richard Deitz 

Photo: several yellow trucks backed into a loading dock

Supply chain disruptions became a major headache for businesses in the aftermath of the pandemic. Indeed, in October 2021, nearly all firms in our regional business surveys reported at least some difficulty obtaining the supplies they needed. These supply chain disruptions were a key contributor to the surge in inflation that occurred as the economy recovered from the pandemic recession. In this post, we present new measures of supply availability from our Business Leaders Survey and Empire State Manufacturing Survey that closely track the New York Fed’s Global Supply Chain Pressure Index (GSCPI). We will begin publishing these data on a monthly basis starting in June. These indexes indicate that supply availability had generally been improving since early 2023, but over the past couple of months, improvement has stalled. This trend is concerning since our May Supplemental Survey indicates that between a third and a half of businesses in the region are experiencing difficulties obtaining supplies, and many are reducing operations and raising prices to compensate, though to a lesser extent than a few years ago. 

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Posted at 8:30 am in New Jersey, New York, Regional Analysis, Supply Chain | Permalink
May 16, 2024

Is the Recent Inflationary Spike a Global Phenomenon?  

Martín Almuzara, Babur Kocaoglu, and Argia Sbordone

Photo: Globe on a graph

In the aftermath of the COVID-19 pandemic, inflation rose almost simultaneously in most economies around the world. After peaking in mid-2022, inflation then went into decline—a fall that was just as universal as the initial rise. In this post, we explore the interrelation of inflation dynamics across OECD countries by constructing a measure of the persistence of global inflation. We then study the extent to which the persistence of global inflation reflects broad-based swings, as opposed to idiosyncratic country-level movements. Our main finding is that the spike and subsequent moderation in global inflation in the post-pandemic period were driven by persistent movements. When we look at measures of inflation that include food and energy prices, most of the persistence appears to be broad-based, suggesting that international oil and commodity prices played an important role in global inflation dynamics. Excluding food and energy prices in the analysis still shows a broad-based persistence, although with a substantial increase in the role of country-specific factors.  

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Posted at 7:00 am in Inflation | Permalink
May 15, 2024

Do Unexpected Inflationary Shocks Raise Workers’ Wages?

Jacob Weber

Photo: two construction workers working on a new building wearing hard hats.

The past year’s steady decline in nominal wage growth now appears in danger of stalling. Given ongoing uncertainty in Ukraine and the Middle East, this seems an opportune moment to revisit the conventional wisdom about the relationship between inflation and wages: if an unexpected increase in energy costs drives up the cost of living, will workers demand higher wages, reversing the recent moderation in wage growth? In new work with Justin Bloesch and Seung Joo Lee examining those concerns, our analysis shows that the pass-through of such inflationary shocks to wages is weak. 

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Posted at 7:00 am in Inflation | Permalink
May 14, 2024

Delinquency Is Increasingly in the Cards for Maxed‑Out Borrowers

Andrew F. Haughwout, Donghoon Lee, Daniel Mangrum, Joelle Scally, Wilbert van der Klaauw, and Crystal Wang

Editor’s note: Since this post was first published, the aggregate credit card utilization rate cited in the second paragraph has been corrected. (May 14, 12:05pm). The percentage of Gen Z credit card users who are “maxed-out” has been corrected in the text and now matches the table. (May 15, 2024, 4:00 pm)
Photo: man holding a wallet in one and a credit card in another with a bag next to him.

This morning, the New York Fed’s Center for Microeconomic Data released the Quarterly Report on Household Debt and Credit for the first quarter of 2024. Household debt balances grew by $184 billion over the previous quarter, slightly less than the moderate growth seen in the fourth quarter of 2023. Housing debt balances grew by $206 billion. Auto loans saw a $9 billion increase, continuing their steady growth since the second quarter of 2020, while balances on other non-housing debts fell. Credit card balances fell by $14 billion, which is typical for the first quarter. However, an increasing number of borrowers are behind on credit card payments. In this post, we explore the relationship between credit card delinquency and changes in credit card “utilization rates.”

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Posted at 11:00 am in Credit, Household Finance | Permalink | Comments (3)
May 13, 2024

Who Is Borrowing and Lending in the Eurodollar and Selected Deposit Markets?

Gara Afonso, Gonzalo Cisternas, and Will Riordan  

Photo: Crystal globe on many currency.

A recent Liberty Street Economics post discussed who is borrowing and lending in the federal funds (fed funds) market. This post explores activity in two other markets for short-term bank liabilities that are often perceived as close substitutes for fed funds—the markets for Eurodollars and “selected deposits.” 

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Posted at 7:00 am in Financial Markets | Permalink
May 9, 2024

The Post‑Pandemic Shift in Retirement Expectations in the U.S.

Felix Aidala, Gizem Kosar, and Wilbert van der Klaauw

Photo: woman riding her bike by the water. Text overlay 10 Years Measuring Consumer Behavior and Expectations

One of the most striking features of the labor market recovery following the pandemic recession has been the surge in quits from 2021 to mid-2023. This surge, often referred to as the Great Resignation, or the Great Reshuffle, was uncommonly large for an economic expansion. In this post, we call attention to a related labor market change that has not been previously highlighted—a persistent change in retirement expectations, with workers reporting much lower expectations of working full-time beyond ages 62 and 67. This decline is particularly notable for female workers and lower-income workers.

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Posted at 10:00 am in Expectations, Labor Market | Permalink
May 8, 2024

How Are They Now? A Checkup on Homeowners Who Experienced Foreclosure

Andrew Haughwout, Donghoon Lee, Daniel Mangrum, Belicia Rodriguez, Joelle Scally, and Wilbert van der Klaauw 

 
The end of the Great Recession marked the beginning of the longest economic expansion in U.S. history. The Great Recession, with its dramatic housing bust, led to a wave of home foreclosures as overleveraged borrowers found themselves unable to meet their payment obligations. In early 2009, the New York Fed’s Research Group launched the Consumer Credit Panel (CCP), a foundational data set of the Center for Microeconomic Data, to monitor the financial health of Americans as the economy recovered. The CCP, which is based on anonymized credit report data from Equifax, gives us an opportunity to track individuals during the period leading to the foreclosure, observe when a flag is added to their credit report and then—years later—removed. Here, we examine the longer-term impact of a foreclosure on borrowers’ credit scores and borrowing experiences: do they return to borrowing, or shy away from credit use and homeownership after their earlier bad experience? 

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Posted at 10:00 am in Household Finance, Housing, Inequality, Recession | Permalink | Comments (3)
May 7, 2024

Many Places Still Have Not Recovered from the Pandemic Recession

Jaison R. Abel, Richard Deitz, Jonathan Hastings, and Joelle Scally

Photo: People standing in line for job & training expo

More than four years have passed since the onset of the pandemic, which resulted in one of the sharpest and deepest economic downturns in U.S. history. While the nation as a whole has recovered the jobs that were lost during the pandemic recession, many places have not. Indeed, job shortfalls remain in more than a quarter of the country’s metro areas, including many in the New York-Northern New Jersey region. In fact, while employment is well above pre-pandemic levels in Northern New Jersey, jobs have only recently recovered in and around New York City, and most of upstate New York—like much of the Rust Belt—still has not fully recovered and has some of the largest job shortfalls in the country.

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Posted at 11:00 am in Labor Market, New Jersey, New York, Pandemic, Recession, Regional Analysis | Permalink | Comments (1)
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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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