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Discussion Paper
Fifth District State Business Cycles
To model national and state business cycles, this post first explores fluctuations of payroll employment around its long-run trend, comparing the correlation of the state-level employment fluctuations to the national series. Second, it explores how a popular rule of thumb recession indicator, the Sahm Recession Rule, performs when applied to state-level data compared to national data during the past four economic downturns. Third, this analysis not only provides us with insight into states' historical relationships with the U.S. business cycle, but it also reveals how they might fare in ...
Journal Article
Boosting the Supply of Rural Rental Housing
The housing market has emerged as one of the sectors of the economy where post-pandemic price pressures are most visible. The combination of a long-running slump in new construction following the Great Recession and the huge shocks to supply and demand stemming from the COVID-19 lockdowns have contributed to growing housing affordability challenges across the country. In the span of just two years, from June 2020 to June 2022, the S&P/ Case-Shiller U.S. National Home Price Index increased by nearly 40 percent. The cost of the average 30-year fixed-rate mortgage has also increased at a fast ...
Journal Article
District Digest: The Roles of Single-Family Housing Investors, Big and Small, in the Fifth District
Single-family housing investors have received more public scrutiny over the past several years as their share of overall home purchases has grown while housing was becoming less affordable due to a national supply crunch. Institutional investors have especially been capturing headlines recently, as homes have become more expensive since 2020 due to increased demand and dwindling supply. But this type of investor has only been active in single-family markets in large numbers over the past 15 years; most single-family investment home purchases are still made by smaller investors. And while ...
Discussion Paper
Are Signs of Labor Market Normalization Reflected in Wage Growth?
There have been two salient features of the U.S. economy in the past two years: a tight labor market and high inflation. In the Richmond Fed business surveys, the tight labor market has manifested in a high employment index combined with a low availability of skills index; high inflation has corresponded with extreme elevation in our survey's measures of growth in prices paid and prices received. Recently, all of these survey measures have either reached or made notable progress toward reaching more historically normal levels. It is hard to imagine, however, a rebalanced labor market or ...
Journal Article
District Digest: Community Colleges as Anchor Institutions in Rural Areas
The Fifth Federal Reserve District — comprising Maryland, North Carolina, South Carolina, Virginia, most of West Virginia, and Washington, D.C. — is home to 122 public two-year institutions that have a wide range of both traditional academic and technical programs. More than half of these community colleges are located in rural counties. The 66 rural community colleges, like the private and public four-year institutions of higher education in rural areas, play an anchor institution role in their communities. But this role is not always accounted for in the formulas that federal, state, ...
Journal Article
At the Richmond Fed: Taking a Closer Look at Housing
Housing is an important consideration as the Federal Reserve promotes price stability and maximum sustainable employment. The Richmond Fed has spent the last year and a half closely studying this sector of the economy for that very reason, with a particular focus on the small towns and rural communities of its region.
Briefing
Commuting Patterns and Economic Connectivity in the Fifth District
One way of measuring economic connectivity across locations is by examining the commuting behavior of residents. This article explores how connected counties in the Fifth District are by focusing on commuting.
Discussion Paper
Firm Price-Setting Behavior Amid Elevated Price Growth: Evidence From Our Surveys
very month, the Richmond Fed surveys firms across the Fifth District to understand how economic and business conditions are changing. As a part of this survey, we ask firms to report the 12-month percentage change in the prices they receive from customers for their goods or services. Additionally, we ask firms to provide their expectations for how prices will change over the next 12 months.As inflation has picked up in the U.S. economy, we have paid particular attention to the price measures from our surveys. Not surprisingly, firms in our district have experienced higher price growth since ...
Journal Article
District Digest: Transportation Access as a Barrier to Work
Lack of a car can be a barrier to employment, particularly for low-income individuals. According to a 2022 survey conducted by the South Carolina Department of Employment and Workforce, almost 20 percent of individuals in that state who were able to work but were not currently working cited transportation as a barrier. Many studies have shown that ownership of a car (or a truck or motorcycle) increases the probability of work, especially among welfare recipients. And low-income individuals are the least likely to own a car and therefore must rely on other means of transportation, such as ...
Discussion Paper
Households Confront the End of Pandemic-Era Assistance Programs
The U.S. government, beginning in March 2020, took extraordinary measures in response to the emergence and spread of the novel coronavirus. Through policy changes and major spending bills, the federal government directed funds to help states, localities, and households manage the economic challenges caused by the pandemic. Two of the many measures that the government took to directly aid households were increasing the flexibility and benefits of the Supplemental Nutrition Assistance Program (SNAP) and pausing federal student loan payments. Now that enhanced SNAP benefits have ended and ...