“Since 2015, U.S. lawmakers have contemplated increasing the federal minimum wage substantially to $15. Central to any consid­eration of a minimum wage hike are the potential effects on employment; however, these effects can be challenging to measure given the limited historical precedent for large, national minimum wage increases in the United States. International evidence may…

“The modern mortgage in all its variations is the product of a complicated history. Local, state, national, and even international actors all competing for profits have existed alongside an increasingly active federal government that for almost a century has sought to make the benefits of homeownership accessible to more Americans, even through economic collapse and…

“This post presents updated estimates of inflation persistence, following the release of personal consumption expenditure (PCE) price data for January 2023. The estimates are obtained by the Multivariate Core Trend (MCT), a model we introduced on Liberty Street Economics last year.” “The current release of the MCT implies a significant upward revision in estimated inflation persistence. The MCT stands…

“The number of job applications has increased since the 1980s with the information and communications technology revolution, yet job-finding rates remain unchanged. We present empirical evidence for two mechanisms underlying this phenomenon: Increased job applications among all workers heighten competition for offers, lowering a given worker’s likelihood of being offered a job. Also, workers with…

“Banks have responded to consumer, competitive and regulatory pressures to overhaul their overdraft programs, and that trend is expected to continue. Most of the action to date has occurred at very large institutions; the vast majority of the nation’s banks (and credit unions) have yet to make changes. Financial institutions, like other firms, must operate…

Overall Economic Activity “Overall economic activity increased slightly in early 2023. Six Districts reported little or no change in economic activity since the last report, while six indicated economic activity expanded at a modest pace.” Labor Markets “Labor market conditions remained solid. Employment continued to increase at a modest to moderate pace in most Districts…

“Why is market liquidity so important? While daily — and sometimes dramatic — fluctuations in Treasury prices, such as the “flash crashes” of October 2014 and September 2019, affect traders’ bottom lines, price volatility stemming from a shock like that in 2020 can have far more dire consequences for the entire economy. If, in the…

In a Review article published in January, St. Louis Fed economist Victoria Gregory examined which workers exited the labor force after separating from their jobs around the Great Recession or the pandemic recession. She also looked at their labor force status one year later. “I find that in both recessions, workers who left the labor force shortly after their…

“The intellectual framework adopted by central banks after the 2008 crisis does not yet appear to have de-anchored inflation expectations. But it would be costly to wait until de-anchoring begins to alter the framework. Warning signals have already emerged in recent inflation expectations data. The loss of the inflation anchor, with its attendant consumer and…

“Weekly portfolio capital inflows to emerging-market economies fell sharply as the COVID-19 pandemic shook the global economy in March 2020.” “The drop was comparable to that during the depths of the Global Financial Crisis in 2008, based on data for a sample of 24 emerging-market economies compiled by Emerging Portfolio Fund Research and used here…

“So don’t read too much into the personal saving rate in the monthly data. Today’s 4.7 percent rate may or may not return to pre-pandemic levels, and consumer spending could prove more fragile than the $1.1 trillion in “excess” savings suggests.”

“In its 2022 Annual Report to Congress, the Office of Financial Research discussed how inflation, monetary tightening, and market volatility elevated financial system risk in 2022. As we begin 2023, OFR’s senior financial analysts Dagmar Chiella, Hashim Hamandi, and Ruth Leung explain five areas of risk they’re currently monitoring.”