State government budgets and the Recovery Act
State and local governments, with revenues reduced sharply by the recession, are responding by cutting services, increasing tax rates, and drawing down reserves; they are also receiving some relief in the form of stimulus funds provided by the federal government. The stimulus funds legislated in the American Recovery and Reinvestment Act only partly offset the recession-induced shortfalls and are scheduled to phase out before most analysts believe state and local governments will see fiscal recovery well underway. Thus, observers are concerned that the state-local sector will create a ...
A principal components approach to estimating labor market pressure and its implications for inflation
We build a summary measure of labor market pressure that captures the common movement among a variety of labor market series. Obtained as the labor market series? first principal component, this measure explains a large portion of the variability of the underlying series. For this reason, it is a good summary indicator of labor market pressure. We show that the unemployment rate gap has tracked this summary measure closely over the past 35 years. At times, however, the summary measure and the unemployment rate gap have sent somewhat different signals. In terms of relying on the principal ...
Do foreclosures affect Boston public school student academic performance?
Foreclosures have well-documented adverse consequences for families living in or owning properties undergoing foreclosure and on surrounding neighborhoods, but they may also have other costs. This policy brief summarizes our research on the impact of mortgage foreclosures on academic performance among Boston public school students. The data show that students who live at an address that experiences a foreclosure tend to score substantially lower on standardized tests (math and English) and also have substantially worse attendance. However, if we account for the influence of student ...
Additional slack in the economy: the poor recovery in labor force participation during this business cycle
This public policy brief examines labor force participation rates in this recession and recovery and compares them with the cyclical patterns in earlier business cycles. Measured relative to the business cycle peak in March 2001, labor force participation rates almost four years later have not recovered as much as usual, and the discrepancies are large. ; Among age-by-sex groups, the participation shortfall is especially pronounced at young and prime ages: Only for men and women age 55 and older has participation risen more than is usual four years after the business cycle peak. ; The brief ...
Massachusetts employment growth 1996–2006: effects of industry performance and industry composition
This brief examines the effects of industry performance and industry composition on overall changes in Massachusetts employment in the period 1996 to 2006. Through 2000, Massachusetts enjoyed strong economic expansion. Around the time of the nationwide recession of 2001, however, the Massachusetts economy experienced a relatively severe setback, and the state has yet to regain as many jobs in the ensuing expansion as it lost in the downturn. ; The study finds that Massachusetts industries generally experienced slower employment growth than their national counterparts in the early 2000s. The ...
The federal fiscal outlook
This Public Policy Brief presents recent forecasts of the U.S. federal government deficits and publicly held federal debt, along with brief commentary by economic research staff at the Federal Reserve Bank of Boston. It is based on materials presented in an internal policy briefing on April 29, 2004. Contributors to this brief include Radoslav Raykov and Robert Triest. Views expressed in this brief do not necessarily reflect the views of the Federal Reserve System.
Cliff notes: the effects of the 2013 debt-ceiling crisis
We investigate the effects of the 2013 debt-ceiling crisis on the Treasury bill market and possible spillovers to the commercial paper market and money market funds. We also compare this experience with the prior debt-ceiling crisis in 2011. We find that the 2013 debt-ceiling crisis reduced the demand for Treasury bills that were scheduled to mature right after the debt-ceiling deadline, but not for longer-term Treasury bills. Accordingly, we see that a hump formed at the shorter end of the term structure of Treasury bill yields around the debt-ceiling deadline, with the term structure ...
The estimated macroeconomic effects of the Federal Reserve's large-scale Treasury purchase program
This brief examines an issue of current importance to the conduct of U.S. economic policy: how has the Federal Open Market Committee (FOMC) plan to purchase up to $600 billion of Treasury securities by June 30, 2011 affected the movement of inflation, GDP, and employment to more desirable medium-term and long-term levels? Following the FOMC's announcement of the plan on November 3, 2010, other events that potentially influence Treasury yields have been at play. To estimate the effects that the FOMC Treasury purchases may have on the goal of achieving more desirable levels of inflation and ...
Understanding the \\"job-loss recovery\\"
This Public Policy Brief presents analysis of the labor market by economic research staff at the Federal Reserve Bank of Boston. It is based on materials originally presented to the Board of Directors of the Boston Fed on April 8, 2004, with selective updates incorporating data reported in early June. Contributors to this brief include David DeRemer, Jeffrey C. Fuhrer, Kristina Johnson, Jane Sneddon Little, Radoslav Raykov, Scott Schuh, Geoffrey M.B. Tootell, Robert Triest, and Anne van Grondelle. Views expressed in this brief do not necessarily reflect the views of the Federal Reserve System.
What can we learn by disaggregating the unemployment-vacancy relationship?
This policy brief explores the nature of the recent change in the vacancy-unemployment relationship by disaggregating the data by industry, age, education, and duration of unemployment, and by examining blue- and white-collar groups separately.