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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.

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.

Offshoring, Low-Skilled Immigration, and Labor Market Polarization

January 27, 2015 Comments off

Offshoring, Low-Skilled Immigration, and Labor Market Polarization
Source: Federal Reserve Bank of Atlanta

During the last three decades, jobs in the middle of the skill distribution disappeared, and employment expanded for high- and low-skill occupations. Real wages did not follow the same pattern. Although earnings for the high-skill occupations increased robustly, wages for both low- and middle-skill workers remained subdued. We attribute this outcome to the rise in offshoring and low-skilled immigration, and we develop a three-country stochastic growth model to rationalize this outcome. In the model, the increase in offshoring negatively affects the middle-skill occupations but benefits the high-skill ones, which in turn boosts aggregate productivity. As the income of high-skill occupations rises, so does the demand for services provided by low-skill workers. However, low-skill wages remain depressed as a result of the surge in unskilled immigration. Native workers react to immigration by upgrading the skill content of their labor tasks as they invest in training.

Home Hours in the United States and Europe

June 26, 2014 Comments off

Home Hours in the United States and Europe
Source: Federal Reserve Bank of Atlanta

Using data from the Multinational Time Use Study, this paper documents the trends and levels of time allocation, with a focus on home hours, for a relatively large set of industrialized countries during the past 50 years. Three patterns emerge. First, home hours have decreased in both the United States and European countries. Second, female time allocation contributes more to the cross-country difference in both the trends and the levels of market hours and home hours per person. Third, time allocations between the United States and Europe are more similar for the prime-age group than for the young and old groups.

The Economic Plight of Millenials

June 16, 2014 Comments off

The Economic Plight of Millenials (PDF)
Source: Federal Reserve Bank of Atlanta

A demographic cohort is never monolithic, but the group that recently entered the labor force had one trait in common: they watched as the Great Recession dramatically reshaped the landscape of employment, housing, and, in general, their expectations. How profoundly will the economic downturn and its associated effects mark this generation?

How We Pay: Results from the Federal Reserve’s Latest Payments Study

May 8, 2014 Comments off

How We Pay: Results from the Federal Reserve’s Latest Payments Study
Source: Federal Reserve Bank of Atlanta

Every three years, the Federal Reserve payments study presents a snapshot of the rapidly evolving U.S. payments system. The latest issue of the Atlanta Fed’s EconSouth magazine highlights the preliminary results of the 2013 study.

Since 2003, when Congress passed the Check Clearing for the 21st Century Act (commonly known as Check 21), the U.S. payments system has shifted dramatically. For instance, paper checks, which once comprised nearly half of noncash payments, accounted for only 15 percent in 2012. Checks are down, but not out, however. Although they made up a smaller share of the payments pie, they are declining from a dominant position. “As check writing continued to decline, the number of checks that could be converted declined as well,” the story notes. As a result, automated clearinghouse (ACH) transactions—many of which originate from the conversion of paper checks to ACH— decelerated, growing just 5.1 percent from 2009 to 2012, compared to 10.9 percent growth during the 2003 to 2012 period.

Meanwhile, payment cards continued to grow, accounting for two-thirds of consumer and business noncash payments in 2012. With annual growth of 15.8 percent, prepaid card payments grew the fastest of all noncash payments. The 2013 study the Fed’s fifth in a series of triennial studies.

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