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May 20, 2013

Economic Outlook: Moving in the Right Direction

By John C. Williams

The economy and the labor market have improved substantially since the Federal Reserve started its current $85 billion monthly asset purchase program last September. However, it will take further gains to demonstrate that the “substantial improvement” test for ending Fed asset purchases has been met. The following is adapted from a presentation by the president and CEO of the Federal Reserve Bank of San Francisco at the Portland Business Journal’s CFO of the Year Awards Luncheon in Portland, Oregon, on May 16, 2013.

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– 2013

+ 2012

38 Monetary Policy and Interest Rate Uncertainty
Bauer :: December 24
37 Will the Jobless Rate Drop Take a Break?
Daly • Elias • Hobijn • Jorda :: December 17
36 External Shocks and China's Monetary Policy
Liu • Spiegel :: December 3 :: Pacific Basin Notes
35 Highway Grants: Roads to Prosperity?
Leduc • Wilson :: November 26
34 The Federal Reserve's Unconventional Policies
Williams :: November 13
33 Did the Housing Boom Affect Mortgage Choices?
Furlong • Takhtamanova :: November 5
32 Credit Access Following a Mortgage Default
Hedberg • Krainer :: October 29
31 Is China Due for a Slowdown?
Malkin • Spiegel :: October 15 :: Pacific Basin Notes
30 The Economic Outlook and Federal Reserve Policy
Williams :: October 1
29 The Financial Crisis and Inflation Expectations
Trehan • Zorrilla :: September 24
28 Uncertainty, Unemployment, and Inflation
Leduc • Liu :: September 17
27 Assessing State Business Cycle Indexes
Neumark • Kolko • Cuellar Mejia :: September 4
26 Small Business Loans and Small Bank Health
Laderman :: August 27
25 Consumer Debt and the Economic Recovery
Krainer :: August 20
24 Asia's Role in the Post-Crisis Global Economy
Glick • Spiegel :: August 13 :: Pacific Basin Notes
23 Pricey Oil, Cheap Natural Gas, and Energy Costs
Hale • Nechio :: August 6
22 The Outlook and Monetary Policy Challenges
Williams :: July 23
21 Monetary Policy, Money, and Inflation
Williams :: July 9
20 U.S. Fiscal Policy: Headwind or Tailwind?
Lucking • Wilson :: July 2
19 Housing Bubbles and Homeownership Returns
Jurgilas • Lansing :: June 25
18 Structural and Cyclical Economic Factors
Swanson :: June 11
17 Are U.S. Corporate Bonds Exposed to Europe?
Hale • Marks • Nechio :: June 4
16 Fed Asset Buying and Private Borrowing Rates
Bauer :: May 21
15 Liquidity Risk and Credit in the Financial Crisis
Strahan :: May 14
14 Commodity Prices and PCE Inflation
Hale • Hobijn • Raina :: May 7
13 Worker Skills and Job Quality
Neumark • Valletta :: April 30
12 Credit: A Starring Role in the Downturn
Jorda :: April 16
11 The Slow Recovery: It's Not Just Housing
Williams :: April 9
10 Why Has Wage Growth Stayed Strong?
Daly • Hobijn • Lucking :: April 2
09 Emerging Asia: Two Paths through the Storm
Hale • Kennedy :: March 26
08 Job Creation Policies and the Great Recession
Neumark :: March 19
07 Do Fed TIPS Purchases Affect Market Liquidity?
Christensen • Gillan :: March 5
06 U.S. and Euro-Area Monetary Policy by Regions
Malkin • Nechio :: February 27
05 Mortgage Prepayment: An Avenue Foreclosed?
Laderman :: February 13
04 Government Spending: An Economic Boost?
Wilson :: February 6
03 Why Is Unemployment Duration So Long?
Valletta • Kuang :: January 30
02 The Federal Reserve and the Economic Recovery
Williams :: January 17
01 Bilateralism, Multilateralism, and Trade Rules
Evans :: January 9

+ 2011

38 Fluctuating Fortunes and Hawaiian House Prices
Krainer • Wilcox :: December 19
37 Asset Price Booms and Current Account Deficits
Bergin :: December 5
36 Signals from Unconventional Monetary Policy
Bauer • Rudebusch :: November 21
35 Future Recession Risks: An Update
Berge • Elias • Jorda :: November 14
34 What Moves the Interest Rate Term Structure?
Bauer :: November 7
33 What's in Your Wallet? The Future of Cash
Gerst • Wilson :: October 24
32 Recent Trends in Small Business Lending
Laderman • Gillan :: October 17
31 Unconventional Monetary Policy: Lessons from the Past Three Years
Williams :: October 3
30 Recent Layoffs in a Fragile Labor Market
Valletta • Kuang :: September 26
29 Cap Rates and Commercial Property Prices
Hobijn • Krainer • Lang :: September 19
28 Credit Union Mergers: Efficiencies and Benefits
Wilcox • Dopico :: September 12
27 Variable Capital Rules in a Risky World
Jorda :: August 29
26 Boomer Retirement: Headwinds for U.S. Equity Markets?
Liu • Spiegel :: August 22
25 The U.S. Content of "Made in China"
Hale • Hobijn :: August 8 :: Pacific Basin Notes
24 Does Headline Inflation Converge to Core?
Liu • Weidner :: August 1
23 When Will Residential Construction Rebound?
Hedberg • Krainer :: July 25
22 Securitization and Small Business
Wilcox :: July 18
21 Gauging the Impact of the Great Recession
Lansing :: July 11
20 Stress Testing and Bank Capital Supervision
Furlong :: June 27
19 TIPS Liquidity, Breakeven Inflation, and Inflation Expectations
Christensen • Gillan :: June 20
18 Monetary Policy When One Size Does Not Fit All
Nechio :: June 13
17 Economics Instruction and the Brave New World of Monetary Policy
Williams :: June 6
16 Household Inflation Expectations and the Price of Oil: It's Deja Vu All Over Again
Trehan :: May 23
15 What Is the Value of Bank Output?
Alon • Fernald • Inklaar • Wang :: May 16
14 Maintaining Price Stability in a Global Economy
Williams :: May 9
13 Operation Twist and the Effect of Large-Scale Asset Purchases
Alon • Swanson :: April 25
12 Has the Treasury Benefited from Issuing TIPS?
Christensen • Gillan :: April 18
11 The Fed's Interest Rate Risk
Rudebusch :: April 11
10 Are Large-Scale Asset Purchases Fueling the Rise in Commodity Prices?
Glick • Leduc :: April 4
09 Recent College Graduates and the Job Market
Hobijn • Gardiner • Wiles :: March 21 :: CSIP Notes
08 Life-Cycle Shocks and Income
Couch • Daly • Gardiner :: March 14 :: CSIP Notes
07 Long-Run Impact of the Crisis in Europe: Reforms and Austerity Measures
Nechio :: March 7
06 Could We Have Learned from the Asian Financial Crisis of 1997-98?
Hale :: February 28 :: Pacific Basin Notes
05 What Is the New Normal Unemployment Rate?
Weidner • Williams :: February 14 [Update]
04 Do Initial Claims Overstate Layoffs?
Hobijn • Sahin :: February 7
03 Estimating the Macroeconomic Effects of the Fed's Asset Purchases
Chung • Laforte • Reifschneider • Williams :: January 31
02 Consumers and the Economy, Part II: Household Debt and the Weak U.S. Recovery
Mian • Sufi :: January 18
01 Consumers and the Economy, Part I: Household Credit and Personal Saving
Glick • Lansing :: January 10

+ 2010

38 Risky Mortgages and Mortgage Default Premiums
Krainer • LeRoy :: December 20
37 Mortgage-Backed Securities: How Important Is "Skin in the Game"?
James :: December 13
36 The Breadth of Disinflation
Hobijn • Gardiner :: December 6
35 Confidence and the Business Cycle
Leduc :: November 22
34 Is Structural Unemployment on the Rise?
Valletta • Kuang :: November 8
33 The Greek Crisis: Argentina Revisited?
Nechio :: November 1
32 TIPS and the Risk of Deflation
Christensen :: October 25
31 Underwater Mortgages
Krainer • LeRoy :: October 18
30 Convex Payoffs: Implications for Risk-Taking and Financial Reform
LeRoy :: October 4
29 Forecasting Growth over the Next Year with a Business Cycle Index
Lang • Lansing :: September 27
28 Is the Recent Productivity Boom Over?
Wilson :: September 20 :: CSIP Notes
27 Labor Force Participation and the Future Path of Unemployment
Kwok • Daly • Hobijn :: September 13
26 The Effect of Immigrants on U.S. Employment and Productivity
Peri :: August 30
25 Financial Market Imperfections and Macroeconomics: Conference Summary
Swanson :: August 23
24 Future Recession Risks
Berge • Jorda :: August 9
23 Stock-Market-Based Measures of Sectoral Shocks and the Unemployment Rate
Chehal • Loungani • Trehan :: August 2
22 Mortgage Prepayments and Changing Underwriting Standards
Hedberg • Krainer :: July 19
21 Lifecycle Investment Decisions and Labor Income Risk
Benzoni • Goldstein :: July 12
20 Fiscal Crises of the States: Causes and Consequences
Gerst • Wilson :: June 28
19 Challenges in Economic Capital Modeling
Lopez :: June 21
18 The Fed's Exit Strategy for Monetary Policy
Rudebusch :: June 14
17 The "Inflation" in Inflation Targeting
Dennis :: June 7
16 Loss Provisions and Bank Charge-offs in the Financial Crisis: Lesson Learned
Furlong • Knight :: May 24
15 The Shape of Things to Come
Weidner • Williams :: May 17
14 Is the "Invisible Hand" Still Relevant?
LeRoy :: May 3
13 The U.S. and World Economic Geography Before and After the Downturn: Conference Summary
Wilson :: April 26 :: CSIP Notes
12 Extended Unemployment and UI Benefits
Valletta • Kuang :: April 19
11 The Housing Drag on Core Inflation
Hobijn • Eusepi • Tambalotti :: April 5
10 The Outlook for the Economy and Inflation, and the Case for Federal Reserve Independence
Yellen :: March 29
09 What Is China's Capital Seeking in a Global Environment?
Alon • Hale • Santos :: March 22 :: Pacific Basin Notes
08 Asia and the Global Financial Crisis: Conference Summary
Glick • Spiegel :: March 15 :: Pacific Basin Notes
07 Okun's Law and the Unemployment Surprise of 2009
Daly • Hobijn :: March 8
06 Can Structural Models of Default Explain the Credit-Spread Puzzle?
Goldstein :: February 22
05 Diagnosing Recessions
Jorda :: February 16
04 Hong Kong and China and the Global Recession
Yellen :: February 8 :: Pacific Basin Notes
03 Mortgage Choice and the Pricing of Fixed-Rate and Adjustable-Rate Mortgages
Krainer :: February 1
02 Inflation: Mind the Gap
Liu • Rudebusch :: January 19
01 Global Household Leverage, House Prices, and Consumption
Glick • Lansing :: January 11

+ 2009

38 Bank Relationships and the Depth of the Current Economic Crisis
Caballero • Candelaria • Hale :: December 14
37 Capital Structure in Banking
Kwan :: December 7
36 Linkages between Monetary and Regulatory Policy: Lessons from the Crisis
Yellen :: November 23
35 Talking about Tomorrow's Monetary Policy Today
Chehal • Trehan :: November 9
34 Inflation Expectations and the Risk of Deflation
Christensen :: November 2
33 Recent Developments in Mortgage Finance
Krainer :: October 26
32 Gauging Aggregate Credit Market Conditions
Lopez :: October 19
31 Disagreement about the Inflation Outlook
Leduc • Rudebusch • Weidner :: October 5
30 Predicting Crises, Part II: Did Anything Matter (to Everybody)?
Rose • Spiegel :: September 28
29 Predicting Crises, Part I: Do Coming Crises Cast Their Shadows Before?
Trehan :: September 21
28 New Highs in Unemployment Insurance Claims
Cleary • Kwok • Valletta :: September 8
27 Credit Market Conditions and the Use of Bank Lines of Credit
James :: August 31
26 Growth Accounting, Potential Output, and the Current Recession
Fernald • Matoba :: August 17
25 Have the Fed Liquidity Facilities Had an Effect on Libor?
Christensen :: August 10
24 Did Welfare Reform Work for Everyone? A Look at Young Single Mothers
Daly • Kwok :: August 3
23 Macroeconomic Models for Monetary Policy: Conference Summary
Swanson :: July 20
22 A View of the Economic Crisis and the Federal Reserve's Response
Yellen :: July 6
21 Employer Health Benefits and Insurance Expansions: Hawaii's Experience
Buchmueller • DiNardo • Valletta :: June 29
20 Fighting Downturns with Fiscal Policy
Leduc :: June 19
19 How Big Is the Output Gap?
Weidner • Williams :: June 12
18 Jobless Recovery Redux?
Daly • Hobijn • Kwok :: June 5
17 The Fed's Monetary Policy Response to the Current Crisis
Rudebusch :: May 22
16 U.S. Household Deleveraging and Future Consumption Growth
Glick • Lansing :: May 15
15 A Minsky Meltdown: Lessons for Central Bankers
Yellen :: May 1
14 Are Fiscal Stimulus Funds Going to the "Right" States?
Wilson :: April 17
13 Interprovincial Inequality in China
Candelaria • Daly • Hale :: April 10 :: Pacific Basin Notes
12 The Risk of Deflation
Williams :: March 27
11 The Outlook for Productivity Growth: Symposium Summary
Doms :: March 20 :: CSIP Notes
10 2008 Annual Pacific Basin Conference: Summary
Glick :: March 13 :: Pacific Basin Notes
09 How Will a Credit Crunch Affect Small Business Finance?
Udell :: March 6
08 Tax Credits for Job Creation and Retention: What Can We Learn from the States?
Wilson • Notzon :: February 20
07 Out-of-Market Small Business Loans
Laderman :: February 13
06 House Prices and Bank Loan Performance
Krainer :: February 6
05 Labor Supply Responses to Changes in Wealth and Credit
Daly • Hobijn • Kwok :: January 30
04 Behavior of Libor in the Current Financial Crisis
Kwan :: January 23
03 The Tech Pulse Index: Recent Trends in Tech-Sector Activity
Hobijn :: January 14 :: CSIP Notes
01-02 U.S. Monetary Policy Objectives in the Short and Long Run
Yellen :: January 9

+ 2008

38 Economic Conditions in Korea and Japan: A Monetary Policymaker's Report
Yellen :: December 19 :: Pacific Basin Notes
37 Convergence of Long-Term Bond Yields in the Euro Area
Swanson :: November 21
35-36 The Mortgage Meltdown, Financial Markets, and the Economy
Yellen :: November 7
34 Monetary Policy and Asset Prices
Lansing :: October 31
33 What Is Liquidity Risk?
Lopez :: October 24
32 Sectoral Reallocation and Unemployment
Valletta • Cleary :: October 17
31 Oil Prices and Inflation
Cavallo :: October 3
30 The EMU Effect on the Currency Denomination of International Bonds
Hale • Spiegel :: September 26
28-29 The U.S. Economic Situation and the Challenges for Monetary Policy
Yellen :: September 19
27 Summer Reading: New Research in Applied Microeconomics Conference Summary
Doms :: September 5
26 Regional Variation in the Potential Economic Effects of Climate Change
Butsic • Hanak • Valletta :: August 22
25 Treasury Bond Yields and Long-Run Inflation Expectations
Christensen :: August 15
24 How and Why Does Age at Kindergarten Entry Matter?
Cascio :: August 8
23 Unanchored Expectations? Interpreting the Evidence from Inflation Surveys
Huang • Trehan :: July 25
22 Can Young Americans Compete in a Global Economy?
Cascio :: July 18
21 Monetary Policy and Asset Markets: Conference Summary
Dennis :: July 11
20 Research on the Effects of Fiscal Stimulus: Symposium Summary
Wilson :: July 3 :: CSIP Notes
19 Consumer Sentiment and Consumer Spending
Wilcox :: June 27
18 Speculative Bubbles and Overreaction to Technological Innovation
Lansing :: June 20
17 Did Large Recalls of Chinese Consumer Goods Lower U.S. Imports from China?
Candelaria • Hale :: June 13 :: Pacific Basin Notes
16 Retirement Savings and Decision Errors: Lessons from Behavioral Economics
Armour • Daly :: June 6
15 Small Business Lending and Bank Competition
Laderman :: May 9
13-14 The Financial Markets, Housing, and the Economy
Yellen :: April 18
12 Are Global Imbalances Due to Financial Underdevelopment in Emerging Economies?
Valderrama :: April 11 :: Pacific Basin Notes
11 Falling House Prices and Rising Time on the Market
Krainer :: March 21
10 The Corporate Bond Credit Spread Puzzle
Christensen :: March 14
09 Assessing Employment Growth in 2007
Regev :: March 7
08 The Economics of Private Equity Investments: Symposium Summary
Lopez :: February 29 :: CSIP Notes
07 Economic Conditions in Singapore and Vietnam: A Monetary Policymaker's Report
Yellen :: February 22 :: Pacific Basin Notes
06 Recent Trends in Economic Volatility: Conference Summary
Notzon • Wilson :: February 15 :: CSIP Notes
04-05 Prospects for the Economy in 2008
Yellen :: February 8
03 2007 Annual Pacific Basin Conference: Summary
Glick :: February 1 :: Pacific Basin Notes
02 Publishing Central Bank Interest Rate Forecasts
Rudebusch :: January 25
01 Publishing FOMC Economic Forecasts
Rudebusch :: January 18

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Opinions expressed in FRBSF Economic Letter do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System. This publication is edited by Sam Zuckerman and Anita Todd. Permission to reprint must be obtained in writing. Please send editorial comments and requests for reprint permission to:
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