Search Results
Journal Article
Decomposing inflation
As U.S. core inflation measures have declined in recent years, analysts have renewed their efforts to understand inflation dynamics. A common approach to this issue is to make inferences about how price changes of major components affect the aggregate inflation rate. This article takes a more rigorous approach, calculating and plotting the precise contributions of major consumer expenditure categories to core inflation measures over time. ; This technique has distinct advantages. It highlights the underlying trends in inflation, enabling analysts to make more informed inferences about the ...
Journal Article
District digest : Economic trends across the region
"The Roles of New and Existing Establishments in Employment in the Fifth District," article by R. Andrew Bauer, pg. 36-39
Discussion Paper
What Businesses Are Saying: Cautiously Optimistic With a Hint of Wariness
In the lead-up to the December Federal Open Market Committee cycle, we heard that the economy was chugging along with disproportionate support from high-income consumers and artificial intelligence (AI). Many firms noted they were hesitant to invest or hire too significantly going into 2026; uncertainty and costs remained too high. Consumers pushed back against price increases, squeezing margins. Labor availability was improving, but skill and geographic mismatches continued, and there were no signs that either hiring or firing would pick up soon. You can read more in December's "What ...
Journal Article
Post-Recession Labor Market Trends in the Fifth District
Journal Article
Understanding Recent Trends in Labor Market Participation
District Digest: Understanding Recent Trends in Labor Market Participation
Discussion Paper
Why Businesses Say Tariffs Have a Delayed Effect on Inflation
Ever since new tariffs were enacted in early 2025, a key policy question has been what is the extent to which businesses will pass tariff costs through to prices, and when? The effects of a tariff are rarely straightforward, given, among other things, competitive dynamics and the challenges of implementation, but the historically large and changing nature of these tariffs have created additional levels of uncertainty over the effects.In uncertain times, anecdotal evidence from businesses can be especially insightful. We are learning how businesses are reacting to tariffs through the Richmond ...
Discussion Paper
What Businesses Are Saying: Activity Up, but Expectations Mixed
The Richmond Fed is an on-the-ground Reserve Bank. Our economic sensing team is constantly in the Fifth District, meeting with firms across industries to put together — piece by piece — a picture of where the economy stands. With the help of a robust network of business leaders willing to share what they're seeing, thinking and planning, we can get a regular pulse on the economy and check in on specific sectors as needed on an ad hoc basis.On-the-ground sensing provides critical information toward our real-time understanding of the economy. Sensing is a supplement to our in-house surveys ...
Briefing
Where are households in the deleveraging cycle?
The ratio of household debt to disposable personal income fell rapidly during the recession of 2007-09 as consumers defaulted on loans, paid down debt, and took out fewer loans. According to some economists, this household debt reduction ? "deleveraging" ? has constrained consumer spending, contributing to a longer, deeper recession and a slower recovery. As households strengthen their balance sheets, their ability to take on new debt to finance consumption is improving, but household debt remains elevated by historical standards, and other determinants of consumer spending remain weak.
Journal Article
Transparency, expectations and forecasts
Many economists believe that a central bank?s transparency about its objectives, economic outlook, and policy changes affect the public?s views about future economic and financial conditions. In keeping with this theory, since 1994 the Federal Open Market Committee has gradually increased the transparency of its statements accompanying changes in the federal funds rate target. ; This article investigates whether private agents? ability to predict the economy?s direction has improved since 1994. The analysis focuses on forecasts of macroeconomic variables such as inflation, gross domestic ...
Working Paper
Using the Kalman filter to smooth the shocks of a dynamic stochastic general equilibrium model
This paper shows how to use the Kalman filter (Kalman 1960) to back out the shocks of a dynamic stochastic general equilibrium model. In particular, we use the smoothing algorithm as described in Hamilton (1994) to estimate the shocks of a sticky-prices and sticky-wages model using all the information up to the end of the sample.