“What determines consumers’ financial behavior? Can income and demographic attributes explain why some consumers have a bank account or a credit card while others do not, or why some credit cardholders revolve their balances while others diligently pay their debts every month? Using detailed data collected from consumer surveys, we find that while demographics and…

“Job gains exceeded output growth in 2022, bringing GDP per worker back down to its trend level after being well above for an extended period. Employment is consequently set to grow slower than output going forward, as it typically does. Breaking down the GDP per worker by industry, though, shows a significant divergence between the…

“In this article, we presented recent research analyzing the role of labor costs in determining the price level. Not counting the current episode, inflation has risen much more slowly during the expansions since 2000. This pattern is associated with a slowdown in core goods inflation, which may have slowed because higher wages do not pass…

“The all items less food and energy index rose 5.5 percent over the last 12 months.” “Indexes which increased in April include shelter, used cars and trucks, motor vehicle insurance, recreation, household furnishings and operations, and personal care. The index for airline fares and the index for new vehicles were among those that decreased over…

“Our findings for headline PCE inflation … suggest that its persistence has fallen slightly from peak but remains near its 20-year high. The most recent data available show that, in the latest quarter of data (the first quarter of 2023), the persistence coefficient dropped from a post-COVID-19 high of 0.71 in the second quarter of…

“We document the prevalence of promotional pricing of credit card debt in the U.S. and develop an analytic framework to study how interest rates on multiperiod credit line contracts should be set when debt is unsecured and defaultable. We show that according to the basic theory of unsecured credit—suitably extended to allow for promotions—interest rates…

“Despite higher interest rates and inflation, consumption demand has remained strong. Households have been making up for pandemic-related privations, largely financed by excess savings that resulted from the fiscal assistance provided during the pandemic. Even higher interest rates may put further downward pressure on consumption demand (by penalizing credit and incentivizing savings). However, there is…

“A summary of the developments in the four broad categories of vulnerabilities since the last report is as follows:” “1. Asset valuations. Yields on Treasury securities declined in March amid heightened financial market volatility. Measures of equity prices relative to expected earnings were volatile over the period but remained above their historical median, while risk…