Remote Work Is Sticking
![photo decorative: Businessman checking emails while on a video call from his home office](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2022/08/LSE_2022_jr-bls-dietz_460.jpg?w=920)
When the pandemic hit in early 2020, many businesses quickly and significantly expanded opportunities for their employees to work from home, resulting in a large increase in the share of work being done remotely. Now, more than two years later, how much work is being done from home? In this post, we update our analysis from last year on the extent of remote work in the region. As has been found by others, we find that some of the increase in remote work that began early in the pandemic is sticking. According to firms responding to our August regional business surveys, about 20 percent of all service work and 7 percent of manufacturing work is now being conducted remotely, well above shares before the pandemic, and firms expect little change in these shares a year from now. While responses were mixed, slightly more firms indicated that remote working had reduced rather than increased productivity. Interestingly, however, the rise in remote work has not led to widespread reductions in the amount of workspace being utilized by businesses in the region.
Three Key Facts from the Center for Microeconomic Data’s 2022 Student Loan Update
![Photo: students in cap and gown graduation ceremony with dollars signs superimposed on the image.](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2022/08/LSE_2022_student-loan-update_mangrum_460.jpg?w=920)
Today, researchers from the Center for Microeconomic Data released the 2022 Student Loan Update, which contains statistics summarizing who holds student loans along with characteristics of these balances. To compute these statistics, we use the New York Fed Consumer Credit Panel (CCP), a nationally representative 5 percent sample of all U.S. adults with an Equifax credit report. For this update, we focus on individuals with a student loan on their credit report. The update is linked here and shared in the student debt section of the Center for Microeconomic Data’s website. In this post, we highlight three facts from the current student loan landscape.
Pandemic Wage Pressures
![Woman cashier wearing a covid mask and shield checking out groceries for a man wearing a COVID mask who is paying at the counter behind a shield.](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2022/07/LSE_2022_pandemic-pressures_benigno_460.jpg?w=920)
The recovery since the onset of the pandemic has been characterized by a tight labor market and rising nominal wage growth. In this post, we look at labor market conditions from a more granular, sectoral point of view focusing on data covering the nine major industries. This breakdown is motivated by the exceptionality of the pandemic episode, the way it has asymmetrically affected sectors of the economy, and by the possibility of exploiting sectoral heterogeneities to understand the drivers of recent labor market dynamics. We document that wage pressures are highest in the sectors with the largest employment shortfall relative to their pre-pandemic trend path, but that other factors explain most of the wage growth differentials. We suggest that one key factor is the extent of physical contact that has had to be compensated for by offering higher wages. One implication of our analysis is that, as COVID-related factors recede, sectoral imbalances could be restored from the supply side as employment recovers back toward the pre-pandemic trend.
The Transatlantic Economy Policy Responses to the Pandemic and the Road to Recovery Conference
![Photo: transatlantic economy conference speakers images compiled on background.](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2022/07/LSE_2022_transatlantic-conference_pesenti_460.jpg?w=920)
The Federal Reserve Bank of New York, the European Commission, and the Center for Economic and Policy Research (CEPR) jointly organized the conference “Transatlantic Economic Policy Responses to the Pandemic and the Road to Recovery,” on November 18, 2021. The conference brought together U.S. and European-based policymakers and economists from academia, think tanks, and international financial institutions to discuss issues that transatlantic policymakers are facing. The conference was held before the Russian invasion of Ukraine and the global monetary tightening. Still, its medium to long-term focus provides interesting insights on economic policy challenges ahead.
The Global Dash for Cash in March 2020
![photo: rows of coins for finance and banking concept with Forex graph, Coins stack for business concept](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2022/07/LSE_2022_global-dash_copeland_460.jpg?w=920)
The economic disruptions associated with the COVID-19 pandemic sparked a global dash-for-cash as investors sold securities rapidly. This selling pressure occurred across advanced sovereign bond markets and caused a deterioration in market functioning, leading to a number of central bank actions. In this post, we highlight results from a recent paper in which we show that these disruptions occurred disproportionately in the U.S. Treasury market and offer explanations for why investors’ selling pressures were more pronounced and broad-based in this market than in other sovereign bond markets.
Did Changes to the Paycheck Protection Program Improve Access for Underserved Firms?
![Photo: African American woman business owner with COVID mask putting up sign for business reopening](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2022/07/LSE_2022_ppp2021_sarkar_460.jpg?w=920)
Prior research has shown that many small and minority-owned businesses failed to receive Paycheck Protection Program (PPP) loans in 2020. To increase program uptake to underserved firms, several changes were made to the PPP in 2021. Using data from the Federal Reserve Banks’ 2021 Small Business Credit Survey, we argue that these changes were effective in improving program access for nonemployer firms (that is, businesses with no employees other than the owner(s)). The changes may also have encouraged more applications from minority-owned firms, but they do not appear to have reduced disparities in approval rates between white- and minority-owned firms.
Does China’s Zero Covid Strategy Mean Zero Economic Growth?
![Asian Woman looking through window with mask](https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2022/06/LSE_2022_china-zero-COVID_clark_460.jpg?w=920)
The Chinese government has followed a “zero covid strategy” (ZCS) ever since the world’s first COVID-19 lockdowns ended in China around late March and early April of 2020. While this strategy has been effective at maintaining low infection levels and robust manufacturing and export activity, its viability is being severely strained by the spread of increasingly infectious coronavirus variants. As a result, there now appears to be a fundamental incompatibility between the ZCS and the government’s economic growth objectives.
What Do Consumers Think Will Happen to Inflation?
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This post provides an update on two earlier blog posts (here and here) in which we discuss how consumers’ views about future inflation have evolved in a continually changing economic environment. Using data from the New York Fed’s Survey of Consumer Expectations (SCE), we show that while short-term inflation expectations have continued to trend upward, medium-term inflation expectations appear to have reached a plateau over the past few months, and longer-term inflation expectations have remained remarkably stable. Not surprisingly given recent movements in consumer prices, we find that most respondents agree that inflation will remain high over the next year. In contrast, and somewhat surprisingly, there is a divergence in consumers’ medium-term inflation expectations, in the sense that we observe a simultaneous increase in both the share of respondents who expect high inflation and the share of respondents who expect low inflation (and even deflation) three years from now. Finally, we show that individual consumers have become more uncertain about what inflation will be in the near future. However, in contrast to the pre-pandemic period, they tend to express less uncertainty about inflation further in the future.