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Labor Shortages, Supply Chain Woes Slow Texas Recovery
The Texas economy is on the path to a solid recovery, although the pace of growth has eased since March, recent data suggest.
Supply-Chain Woes, Labor Shortages and COVID-19 Slow Resilient Texas Economy
Regional economic growth has slowed, though it remains robust by historical standards. While demand has improved from year-ago levels, supply-chain disruptions and labor shortages have limited output growth and pushed up wages and prices.
U.S. Labor Market Slack Created by COVID-19 Pandemic Has Been Absorbed
The weaker-than-expected August labor market report should not obscure the labor market’s ongoing and significant progress while recovering from the COVID-19 pandemic.
What Might Inflation Look Like Next Year?
In our baseline scenario, core inflation is 2.6 percent in 2022. If this occurs, core inflation will have averaged 2.4 percent over the last five years, moderately above the Fed’s 2.0 percent inflation target.
Report
Has COVID Changed Consumer Payment Behavior?
The COVID-19 pandemic has caused large changes in consumer spending, including how people make their payments. We use data from a nationally representative survey of US consumers collected before the pandemic in 2018 and 2019 and in 2020 to analyze changes in consumer payment behavior during the pandemic. We find that compared with their payment behavior in 2019, consumers had shifted some of their purchases from in person to online by fall 2020, significantly lowered their use of cash for purchases, and shifted their person-to-person (P2P) payments away from paper (cash and checks). Those ...
Working Paper
Gauging the Sentiment of Federal Open Market Committee Communications through the Eyes of the Financial Press
We apply natural language processing tools to news articles in the financial press to construct a sentiment index—an index of the perceived semantic orientation of monetary policy communications around scheduled Federal Open Market Committee (FOMC) meetings. To that end, we develop several dictionaries that capture various monetary policy tools: conventional monetary policy, asset purchases, and forward guidance. The surprises in the sentiment index around FOMC meetings announcements explain variation in major asset prices classes between May 1999 and November 2022. Sentiment index ...
Working Paper
Corporate Bond Issuance Over Financial Stress Episodes: A Global Perspective
We use a merged global data set of security-level corporate bond issuance and firm-level financial statement data to show that, in contrast to earlier periods of financial stress, during the COVID pandemic nonfinancial firms around the world were more likely to issue bonds, driven by a boom in local-currency-denominated issuance. We observe a distinct cross-regional difference in the characteristics of issuing firms, finding that in advanced economies issuance during COVID was driven by less risky firms, as predicted by existing theories; in emerging markets, only issuance of U.S. dollar ...
Journal Article
COVID and Cities, Thus Far
Key reasons for the existence of cities are the externalities created when people cluster together in close proximity. During the COVID-19 pandemic, such interactions came with health risks and people found other ways to interact. This article documents how cities changed during COVID-19 and considers how the persistence of new ways of interacting, particularly remote work, will shape the development of cities in the future. It first summarizes evidence showing how residential and commercial prices and activity adjusted at different distances from dense city centers during and since the ...
Journal Article
Flexibility and Conversions in New York City's Housing Stock: Building for an Era of Rapid Change
Post-COVID, New York City faces reduced demand for commercial space in its central business districts, even as residential demand is resurgent. Just as in past eras of New York’s history, conversion of commercial spaces into housing may help the city adapt to these new market conditions and provide an additional pathway for producing badly needed housing. If 10 percent of office and hotel spaces were converted to residential use, around 75,000 homes would be created, concentrated in Midtown Manhattan. However, there are considerable obstacles to such conversions, including a slew of ...
Discussion Paper
Deciphering the Disinflation Process
U.S. inflation surged in the early post-COVID period, driven by several economic shocks such as supply chain disruptions and labor supply constraints. Following its peak at 6.6 percent in September 2022, core consumer price index (CPI) inflation has come down rapidly over the last two years, falling to 3.6 percent recently. What explains the rapid shifts in U.S. inflation dynamics? In a recent paper, we show that the interaction between supply chain pressures and labor market tightness amplified the inflation surge in 2021. In this post, we argue that these same forces that drove the ...