Category: The Economy

The economy has decelerated in the current quarter from the 6 percent plus rate of growth in the first half of the year. This slowdown has been most evident in spending by consumers. As shown in the chart below, growth in personal consumption expenditures—which account for nearly 70 percent of total output—has ground to a … Continue reading The Pause in the Expansion

Source: Merriam-Webster Dictionary Infrastructure is the set of fundamental facilities and systems that support the sustainable functionality of households and firms, serving a country, city, or other areas,[1] including the services and facilities necessary for its economy to function. (Source: Wikipedia) The term infrastructure entered the vocabulary of public policy discussions in the 1970s when … Continue reading Infrastructure: Time for a Fresh Look

The employment report for July was widely hailed as a strong report.  Total nonfarm employment rose nearly 1 million (943,000, the blue bar in the chart below) and the unemployment rate dropped 1/2 percentage points to 5.4 percent.  However, as in June, a sizable portion of the gain in employment occurred in the state and … Continue reading Supply Restraints Continue to Hold Back the Economy (Revised)

The second quarter turned out to be something of a disappointment. Output was expected to grow at nearly a double-digit pace over much of the quarter, but came in at a 6-1/2 percent rate—little different from the first quarter. This is illustrated in the chart below produced by the staff of the Federal Reserve Bank … Continue reading The Economy: What Have We Learned from the Second Quarter?

The pickup in inflation in recent months has spurred worries about whether we are entering an uncomfortable new era beset by large price increases. The chart below illustrates that core inflation (which excludes volatile food and energy prices) has spiked recently. For nearly a decade before the pandemic, core inflation ran at a 1-1/2 to … Continue reading The Economy: Will Inflation Be Contained?

The recent news on the economy confirms that the labor market continues to tighten, even though 7-1/2 million fewer people were employed in May than at the onset of the pandemic. Strains in the labor market are holding down gains in employment and growth in output and placing upward pressure on inflation. Indeed, hiring problems … Continue reading The Economy: Greater Strains Have Become Evident

In light of the hot housing market, there is mounting concern about another housing bubble. Are things getting out of hand in the housing market? Is another crash coming soon? The first chart below illustrates that the twelve-month increase in the price of existing homes was 13 percent in March (the measure shown is not … Continue reading The Economy: Housing Bubble Redux?