Serving the public with innovative research and analysis
Fernanda Nechio, research advisor at the Federal Reserve Bank of San Francisco, stated her views on the current economy and the outlook as of March 9, 2017.
The elevated number of non-employed people who are out of the labor force has raised some concerns about how well the headline unemployment rate measures available labor. An alternative measure of labor utilization, the Non-Employment Index, accounts for all non-employed individuals, distinguishing between groups like short-term versus long-term unemployed, discouraged workers, retirees, and disabled individuals, and adjusting for how likely each is to transition to employment. Current data show the index is very close to its value in 2005–06, the period near the peak of the previous economic expansion.
Some have argued that Treasury yields have been pushed down by lower longer-run expectations of the safe, short-term real interest rate—that is, by a drop in the so-called equilibrium or natural rate of interest. We examine this possibility using an arbitrage-free dynamic term structure model estimated directly on prices of individual inflation-indexed bonds with adjustments for real term and liquidity risk premiums. We find that a lower expected short real rate has accounted for about 2 percentage points of the general downtrend in yields over the past two decades and that this situation seems unlikely to reverse quickly.
PCE Inflation Dispersion statistics present a more detailed summary of the personal consumption expenditure price index (PCEPI), a measure of U.S. inflation. Included are measures of the distribution of price changes across categories and diffusion indices.
The Tech Pulse Index is an index of coincident indicators of activity in the U.S. information technology sector. It can be interpreted as a summary statistic that tracks the health of the tech sector in a timely manner.
Total Factor Productivity (TFP) presents a real-time, quarterly data series for the U.S. business sector, adjusted for variations in factor utilization—labor effort and capital’s workweek.
The Wage Rigidity Meter offers a closer examination of the annual wage changes of U.S. workers that have not changed jobs over the year.
This page provides estimates of weather-adjusted employment change in the United States for the past six months. The estimates are aggregated from county-level estimates of weather’s employment effects, which were derived from a county-level analysis of the short-run effects of unusual weather on employment growth.