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Newsletter
How does labor adjustment in this recession compare with the past?
The authors examine how firms are adjusting their work force during the current recession in comparison with other recessions over the past 40 years.
Working Paper
Forecasting Economic Activity with Mixed Frequency Bayesian VARs
Mixed frequency Bayesian vector autoregressions (MF-BVARs) allow forecasters to incorporate a large number of mixed frequency indicators into forecasts of economic activity. This paper evaluates the forecast performance of MF-BVARs relative to surveys of professional forecasters and investigates the influence of certain specification choices on this performance. We leverage a novel real-time dataset to conduct an out-of-sample forecasting exercise for U.S. real gross domestic product (GDP). MF-BVARs are shown to provide an attractive alternative to surveys of professional forecasters for ...
Newsletter
A different way to review the Chicago Fed National Activity Index
This article analyzes the recent sources of strength and weakness in the Chicago Fed National Activity Index (CFNAI), using a new measure that is often a leading indicator of the index?s movements.
Newsletter
Using Private Sector “Big Data” as an Economic Indicator: The Case of Construction Spending
This Chicago Fed Letter provides an account of our collaboration with the construction contracts and payment management firm Textura to use their data to evaluate the state of U.S. construction spending. We show that new construction projects budgeted by Textura?s clients are a leading indicator for total U.S. construction spending and provide information beyond other already publicly available data.
Newsletter
Tracking Detroit’s Economic Recovery After Bankruptcy with a New Index
This article presents evidence that Detroit?s economy is doing noticeably better than before the city filed for bankruptcy in July 2013. In order to track the city?s economic recovery following its bankruptcy, we use a new index that quantifies Detroit?s overall economic performance from 1998 to the present.
Working Paper
The Chicago Fed DSGE model
The Chicago Fed dynamic stochastic general equilibrium (DSGE) model is used for policy analysis and forecasting at the Federal Reserve Bank of Chicago. This article describes its specification and estimation, its dynamic characteristics and how it is used to forecast the US economy. In many respects the model resembles other medium scale New Keynesian frameworks, but there are several features which distinguish it: the monetary policy rule includes forward guidance, productivity is driven by neutral and investment specific technical change, multiple price indices identify inflation and there ...
Newsletter
Is There Still Slack in the Labor Market?
Based on recent population and labor force projections, we estimate that payroll employment remained about one million jobs below its trend as of April 2016. Given an average pace of roughly 200,000 jobs added per month so far this year, this implies that labor market slack is likely to persist until late 2016. Considerable uncertainty surrounds this estimate, however, especially with respect to labor force trends. An alternative calculation that assumes a steeper decline in trend labor force participation driven by shifting demographics suggests that slack could persist for up to an ...
Newsletter
Estimating the trend rate of economic growth using the CFNAI
This article shows how a new methodology for constructing the Chicago Fed National Activity Index (CFNAI) can be used to identify both the cyclical (medium-run) and trend (long-run) components of real gross domestic product (GDP) growth.
Newsletter
Chicago Fed National Activity Index turns ten - analyzing its first decade of performance
This article discusses how the Chicago Fed National Activity Index has performed as a ?real-time? indicator of economic activity and related inflationary pressure.
Working Paper
Federal Reserve policies and financial market conditions during the crisis
During the recent financial crisis, the Federal Reserve implemented a series of extraordinary and unconventional policies to alleviate the impact of the crisis on financial markets and the economy. In this paper, we examine the effects of these policies on broad financial market conditions, explicitly taking into account that policy was endogenously determined in response to prevailing financial market and economic conditions. We find that the Fed was more likely to initiate or expand new programs when financial market conditions were tighter than usual and economic conditions deteriorating. ...