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Federal Reserve Bank of Atlanta Annual Report 2014 — Jobs. More Work to Be Done?

March 31, 2015 Comments off

Jobs. More Work to Be Done?
Source: Federal Reserve Bank of Atlanta

In 2014, the Federal Reserve Bank of Atlanta continued to focus its research on the labor market and what had to happen before the economy could achieve full employment. Price stability and maximum employment are the two objectives of the Fed’s dual mandate from Congress. By the end of the year, the U.S. economy had made significant progress toward full employment. Two closely watched measures of labor market health, job creation and the unemployment rate, had improved considerably (see the Total Nonfarm Employment and the Unemployment Rate charts).

Employers added an average of 260,000 jobs per month during 2014, ahead of the 194,000-a-month pace of the previous two years. Meanwhile, the jobless rate fell from 6.6 percent at the beginning of 2014 to 5.6 percent in December. The unemployment rate is fast approaching the 5.2 percent to 5.5 percent range the Federal Open Market Committee (FOMC) judges to be consistent with full employment. The FOMC is the Fed’s policy-setting body.

Without question, the labor market made real progress last year. But the official unemployment rate and monthly job creation numbers can tell only part of the story. Broader labor market measures continued to indicate that a significant body of available resources—people and their capacity to work productively—were not being used. This “slack” meant that the labor market, and thus the broader economy, was not operating at full capacity.

Resilience in Planning: A Review of Comprehensive Plans in Mississippi after Hurricane Katrina

March 30, 2015 Comments off

Resilience in Planning: A Review of Comprehensive Plans in Mississippi after Hurricane Katrina
Source: Federal Reserve Bank of Atlanta

This paper analyzes and compares the decisions communities made in rebuilding after Hurricane Katrina in 2005 to determine to what extent post-Katrina comprehensive plans promote resilience based on built environment factors that have been shown to improve social networking, physical safety, and community building. Levels of recovery are also examined, measured by the current numbers of occupied housing units in each community compared with pre-Katrina numbers.

After Katrina, multiple planning documents were produced by a variety of organizations. Mississippi state statute requires each municipality to have a long-range comprehensive plan adopted by the local governing body. Plans establish goals over a 20- to 25-year period of development and are required to address residential, commercial, and industrial development; parks, open space, and recreation; street and road improvements; and public schools and community facilities. To capture the most significant interests and values, the overarching goals and vision statements of post-Katrina plans were compared and analyzed.

Plans from four Mississippi communities affected by Hurricane Katrina—Biloxi, Ocean Springs, Pascagoula, and Waveland—indicate that communities in the region understand many of the present strengths and weaknesses with respect to disaster resilience and have outlined a strategy to mitigate damage, reduce vulnerability, and create support networks to speed up recovery for a future disaster on the scale of Katrina. Like any plan, how and to what extent these ideals are implemented is a concern. During interviews in these communities, recurring concerns were public participation and, at the least, attention to the needs of residents in the planning process.

Have Distressed Neighborhoods Recovered? Evidence from the Neighborhood Stabilization Program

March 26, 2015 Comments off

Have Distressed Neighborhoods Recovered? Evidence from the Neighborhood Stabilization Program (PDF)
Source: Federal Reserve Board

During the 2007-2009 housing crisis, concentrations of foreclosed and vacant properties created severe blight in many cities and neighborhoods. The federal Neighborhood Stabilization Program (NSP) was established to help mitigate distress in hard-hit areas by funding the rehabilitation or demolition of troubled properties. This paper analyzes housing market changes in areas that received investments during the second round of NSP funding, focusing on seven large urban counties. Grantees used NSP to invest in census tracts with high rates of distressed and vacancy properties, and tracts that had previously received other housing subsidies. The median NSP tract received quite sparse investment, relative to the overall housing stock and the initial levels of distress. Analysis of housing market outcomes indicates the recovery has been uneven across counties and neighborhoods. In a few counties, there is some evidence that NSP2 activity is correlated with improved housing outcomes.

Changes in Family Welfare from 1994 to 2012: A Tale of Two Decades

March 18, 2015 Comments off

Changes in Family Welfare from 1994 to 2012: A Tale of Two Decades
Source: Federal Reserve Bank of Atlanta

The female/male average wage ratio has steadily risen from 1983 to 2012. In earlier work, we found that the falling wage gap from 1983 to 1993 was materially detrimental to the average dual-earner family. The female/male wage ratio continued to rise over the following two decades, accompanied by a growing share of households in which the wife is the principal household income generator. This paper investigates how these two developments affected family welfare. Although family welfare rose during the 1990s, the story of the 2000s is quite different.

Higher Education, Wages, and Polarization

March 17, 2015 Comments off

Higher Education, Wages, and Polarization
Source: Federal Reserve Bank of San Francisco

The earnings gap between people with a college degree and those with no education beyond high school has been growing since the late 1970s. Since 2000, however, the gap has grown more for those who have earned a post-graduate degree as well. The divergence between workers with college degrees and those with graduate degrees may be one manifestation of rising labor market polarization, which benefits those earning the highest and the lowest wages relatively more than those in the middle of the wage distribution.

The twelve Federal Reserve banks: Governance and accountability in the 21st century

March 16, 2015 Comments off

The twelve Federal Reserve banks: Governance and accountability in the 21st century
Source: Brookings Institution

Chronicling the politics that led to the creation of the twelve Reserve Banks and the pursuant legal and political consequences, this paper argues that the Federal Reserve’s quasi-private Reserve Banks are, at best, opaque and unaccountable, and, at worst, unconstitutional.

Inequality in Skills and the Great Gatsby Curve

March 13, 2015 Comments off

Inequality in Skills and the Great Gatsby Curve (PDF)
Source: Federal Reserve Board of Chicago

This article presents evidence relating cross – country differences in intergenerational mobility to differences in inequality of skills. In recent years … a growing body of evidence showing that intergenerational economic mobility is lower in the U.S. than in most other advanced economies.” The author examines whether intergenerational low mobility may reflect underlying differences in inequality of skills using data from the Programme for the International Assessment of Adult Competencies (PI AAC) survey conducted by the Organisation for Economic Co – operation and Development (OECD). The survey took place between 2011 and 2012 and collected data on 166,000 adults between the ages of 16 and 65 in 24 OECD countries, including about 5,000 U.S. adults. The author suggests health and education policies are a good starting point to address this issue.”

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