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Research Spotlight
The Finer Points of Cyclical and Acyclical Inflation
Distinguishing between items that change price with economic growth and those that are unaffected is one way to learn more about inflation. An update to the SF Fed’s Cyclical and Acyclical Core PCE Inflation measure uses a new method to improve such inflation data. Read more
Recent Publications
FedViews
Economic Outlook
Kevin J. Lansing, research advisor at the Federal Reserve Bank of San Francisco, stated his views on the current economy and the outlook as of January 9, 2020.
Economic Letter
The New Stone Soup
Countries around the globe face slow growth, low real interest rates, and persistently low inflation. This makes economies less resilient and less able to offset everyday shocks with traditional tools. Policymakers must actively look for outside perspectives and be courageous enough to take action in times of uncertainty. The following is adapted from a speech by the president and CEO of the Federal Reserve Bank of San Francisco delivered as part of the Iveagh House Lectures at the Irish Department of Foreign Affairs and Trade in Dublin on February 10.
Working Paper
Exchange Rate Misalignment and External Imbalances: What is the Optimal Monetary Policy Response?
How should monetary policy respond to capital inflows that appreciate the currency, widen the current account deficit and cause domestic overheating? Using the workhorse open-macro monetary model, we derive a quadratic approximation of the utility-based global loss function in incomplete market economies, solve for the optimal targeting rules under cooperation and characterize the constrained-optimal allocation. The answer is sharp: the optimal monetary stance is contractionary if the exchange rate pass-through (ERPT) on import prices is incomplete, expansionary if ERPT is complete–implying that misalignment and exchange rate volatility are higher in economies where incomplete pass through contains the effects of exchange rates on price competitiveness.
Indicators and Data
China Cyclical Activity Tracker
The China Cyclical Activity Tracker, China CAT, is an alternative measure of China’s economic growth based on research in Fernald, Hsu, and Spiegel (2019).
Cyclical and Acyclical Core PCE Inflation
Cyclical and Acyclical Core PCE Inflation divides components of core personal consumption expenditures according to whether they move in tandem with economic cycles or are independent of the state of the overall economy.
PCE Inflation Dispersion
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.
Tech Pulse
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
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.
Treasury Yield Premiums
The Treasury yield premium model decomposes nominal bond yields of various maturities into three components: expectations of the average future short-term interest rate, a term premium, and a model residual.
Wage Rigidity Meter
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.
Weather-Adjusted Employment Change
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.
