Q3 GDP: Seeking the Source

As the early data on the third quarter begin to roll in, the (very tentative) conclusion is that nothing we know yet contradicts the consensus gross domestic product (GDP) forecast (from the Blue Chip panel, for example) of seasonally adjusted annualized Q3 growth in the neighborhood of 3 percent. The latest from ourGDPNow model: The […]

What Is the Outlook for U.S. Monetary Policy?

Will the Federal Open Market Committee’s (FOMC) current large-scale asset purchase program, so-called QE3, continue to melt away as spring arrives? The release of theminutes from the January meeting of the FOMC, along with commentary from various participants in that meeting (noted in rapid succession here, here, and here, for example) have left the distinct impression that the […]

Is the Labor Force Participation Rate About to Fall Again?

A few posts back my Atlanta Fed colleagues Tim Dunne and Ellie Terry offered up our latest contribution to the ongoing head-scratching over the rather spectacular decline in U.S. labor force participation (LFP) since the onset of the Great Recession in December 2007. “Rather spectacular” in this case means a fall in the participation rate from […]

Why Was the Housing-Price Collapse So Painful? (And Why Is It Still?)

Foresight about the disaster to come was not the primary reason this year’s Nobel Prize in economics went to Robert Shiller (jointly with Eugene Fama and Lars Hansen). But Professor Shiller’s early claim that a housing-price bubble was full on, and his prediction that trouble was a-comin’, is arguably the primary source of his claim to fame […]

Why No Taper? One Man’s View

Martin Feldstein will give you three possible reasons why—to some surprise, I gather—the Federal Open Market Committee (FOMC) decided two weeks back to not adjust the pace of its asset purchases: One possibility is that Bernanke and the other FOMC leaders… never intended to start tapering… A second possible explanation is that Bernanke and other Fed leaders were indeed […]

What a Difference a Month Makes? Maybe Not Much

By most accounts, the July employment report released this morning was something of a disappointment, perhaps more because it fell short of expectations than for any absolute signal it sends about the state of the economy. To be sure, the 162,000 net jobs created in July were below June’s 12-month average, which itself ticked down a bit as […]

The Semantics of Monetary Policy

Tim Duy has some questions for the head man at the Atlanta Fed: …Atlanta Federal Reserve President Dennis Lockhart…was on the speaking circuit today. Via the Wall Street Journal… If the Fed does slow the pace of its bond buying, “this is not a decisive removal of accommodation. This is a calibration to the state of the […]

A Subtle View of Labor Market Improvement

In a speech delivered Tuesday to the Japan Society in New York City, Federal Reserve Bank of New York President William Dudley offered his view on how he might assess the appropriate pace of the Federal Open Market Committee’s (FOMC) current $85 billion per month asset purchase program: Let me give a few examples of how my […]

Labor Force Participation and the Unemployment Threshold

On Friday, my colleague Julie Hotchkiss shared in this space the results of her new research (with Fernando Rios-Avila, a Georgia State University colleague) on the recent and prospective behavior of the labor force participation rate (LFPR). The punch line, from my point of view, is this: Our results suggest that relative to the average LFPR over the years […]

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