“Finally, since growth in unit labor costs does not predict inflation, one has to be careful in using unit labor costs to identify inflationary pressures. Given the lagging nature of unit labor costs, using the slowdown in the growth in unit labor costs to identify when inflationary pressures have abated may overestimate the point at…

“Banks carry significant exposures to nonbanks from direct dealings, but they can also be exposed, indirectly, through losses in asset values resulting from fire-sale events. We assess the vulnerability of U.S. banks to fire sales potentially originating from any of twelve separate nonbank segments and identify network-like externalities driven by the interconnectedness across nonbank types…

“We study credit card rewards as an ideal laboratory to quantify redistribution between consumers in retail financial markets. Comparing cards with and without rewards, we find that, regardless of income, sophisticated individuals profit from reward credit cards at the expense of naive consumers. To probe the underlying mechanisms, we exploit bank-initiated account limit increases at…

“Local weather shocks have been shown to affect local economic output, however, little is known about their propagation through production networks. Using a six-sector global dataset over the past fifty years, this paper examines the effect of weather fluctuations and extreme weather events on sectoral economic production and the transmission of weather shocks across sectors,…

“Using flow of funds and high frequency data from the Investment Company Institute, we study the effects of monetary policy shocks on the size of non-bank assets as well as on flows into long-term mutual funds and returns on their assets. Consolidating chains of non-bank intermediation to avoid double counting, we find that contractionary monetary…

Overview “Consumer spending rose in January, after stalling November and December.  Real disposable income jumped in January, helped by the inflation adjustment to social security and tax brackets.  Manufacturing activity rose in January.  January housing starts were down sharply over the year.”

Inflation “While inflation has come down from peak readings recorded in June 2022, it remains well above the Federal Reserve’s 2% longer-run goal. We expect inflation to return gradually to 2%.” “The consumption basket used to measure headline PCE inflation is comprised of both goods and services, with goods accounting for about 34% of the…

“Total nonfarm payroll employment rose by 311,000 in February, and the unemployment rate edged up to 3.6 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Employment declined in information and in transportation and warehousing.” “Both the unemployment rate, at 3.6…

“We construct a news-based historical information load index by considering over 2 million articles printed in The New York Times from January 1, 1885 to December 31, 2018. We use these novel data to study the effects of information load on stock market dynamics.” “Overall, in this paper, we provide supporting evidence on the significant…

“We use Norwegian administrative panel data on wealth and income between 1993 and 2015 to study lifecycle wealth dynamics, focusing on the wealthiest households. On average, the wealthiest start their lives substantially richer than other households in the same cohort, own mostly private equity, earn higher returns, derive most of their income from dividends and…

“We find that many borrowers fail to convert high-interest debt into low-interest debt even when inertia, most information frictions, and fixed costs are eliminated. We focus on borrowers that have already overcome the inertia and information frictions by considering mortgage borrowers that have already chosen to refinance. Furthermore, we show that lowering (or eliminating) the…

“Examining the language of FOMC minutes and transcripts, Cieslak and Vissing-Jorgensen found that the Fed pays significant attention to stock market developments. In addition, they found that “discussions of stock market conditions by the FOMC attendees are most frequently cast in the context of consumption, with the consumption-wealth effect highlighted as one of the main…