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The Economy
Chris Foote
Federal Reserve Bank of BostonResearch Department
October 6, 2011
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Outline
1 The Economy in the U.S. and New England
2 Newspapers and the Business Cycle
3 Recent Economic Policy Initiatives
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Disclaimer: I do not speak for:
Eric Rosengren, President of Boston Fed Ben Bernanke, Chairman of Federal Reserve
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The Economy in the U.S. and New England
Employment Levels: Total Nonfarm Payrolls
100
105
110
115
120
TotalNonfarmEmployment
(Jan1995=100)
1995m1 2000m1 2005m1 2010m1
United StatesMassachusetts
New England
Foote (Boston Fed) The Economy October 6, 2011 5 / 39
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The Economy in the U.S. and New England
Unemployment Rate
0
2
4
6
8
10
12
PercentofL
aborForce
1980m1 1990m1 2000m1 2010m1
Recessions Massachusetts
U.S. New England
Foote (Boston Fed) The Economy October 6, 2011 6 / 39
Th E i h U S d N E l d
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The Economy in the U.S. and New England
Recent Private-Sector Employment Growth
1000
750
500
250
0
250
500
Thousan
dsofPayrollJobs
1000
75
0
500
250
0
250
500
ThousandsofPa
yroll
Jobs
2008m1 2009m1 2010m1 2011m1
Sources: Bureau of Labor Statistics (Establishment Survey).
Foote (Boston Fed) The Economy October 6, 2011 7 / 39
Th E i th U S d N E l d
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The Economy in the U.S. and New England
Unemployment in New England
4
6
8
10
12
PercentofLabor
Force
2002m1 2004m1 2006m1 2008m1 2010m1 2012m1
CT MEMA NH
RI VT
Foote (Boston Fed) The Economy October 6, 2011 8 / 39
The Economy in the U S and New England
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The Economy in the U.S. and New England
Unemployment and Inflation
3
2
1
0
1
2
3
4
5
6
7
8
9
10
Percent
3
2
1
0
1
2
3
4
5
6
7
8
9
10
Percent
1998m1 2000m1 2002m1 2004m1 2006m1 2008m1 2010m1 2012m1
Unemployment Rate12Mo. Change in Core CPI
12Mo. Change in Headline CPI
Foote (Boston Fed) The Economy October 6, 2011 9 / 39
The Economy in the U S and New England
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The Economy in the U.S. and New England
Why is the recovery so slow? Some possibilities
De-leveraging: Lack of aggregate demand as firms and
consumers rebuild balance sheets?Labor markets: Unemployed dont have the right skills or are
locked into underwater mortgages?
Credit markets: Banks unable/unwilling to lend?
Uncertainty: Firms wary of future health-care or tax liabilities?
Foote (Boston Fed) The Economy October 6, 2011 10 / 39
The Economy in the U S and New England
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The Economy in the U.S. and New England
Increase in Saving
7000
8000
900
0
10000
11
000
BillionsofChain
ed$2005
Jan 1998 Jan 2000 Jan 2002 Jan 2004 Jan 2006 Jan 2008 Jan 2010 Jan 2012
Disposable IncomeConsumption
Foote (Boston Fed) The Economy October 6, 2011 11 / 39
The Economy in the U S and New England
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The Economy in the U.S. and New England
Long-Term Unemployment
0
10
20
30
40
50
PercentofUnemp
loyedPersons
1960m1 1970m1 1980m1 1990m1 2000m1 2010m1
Recessions Share of Unemployed: 27 Weeks or Longer
Foote (Boston Fed) The Economy October 6, 2011 12 / 39
The Economy in the U.S. and New England
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The Economy in the U.S. and New England
Unemployment Rates by Education
0
5
10
1
5
Percent
1992m1 1996m1 2000m1 2004m1 2008m1 2012m1
HS Dropout
High School
Some College
Bachelors or Higher
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The Economy in the U.S. and New England
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y g
Unemployment Rates by Education (Normalized)
50
100
150
200
Index(Jan1992
=100)
1992m1 1996m1 2000m1 2004m1 2008m1 2012m1
HS Dropout
High School
Some College
Bachelors or Higher
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The Economy in the U.S. and New England
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y g
Job-Finding Rates by Industry
.1
.2
.3
.4
.5
ProbabilityofFin
dingaJob
1995m1 2000m1 2005m1 2010m1
Construction
Other
Note: Fivemonth moving averages.
Foote (Boston Fed) The Economy October 6, 2011 15 / 39
The Economy in the U.S. and New England
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Job-Finding Rates by Skill Level
.15
.2
.25
.3
ProbabilityofFin
dingaJob
2007m1 2008m1 2009m1 2010m1 2011m1
High
Middle
Low
Note: Dashed line corresponds to September 2008, fivemonth moving averages.
Foote (Boston Fed) The Economy October 6, 2011 16 / 39
Newspapers and the Business Cycle
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Advertising Revenues by Source
0
1250
250
0
MillionsofDollars
1970q1 1980q1 1990q1 2000q1 2010q1
National Print
0
3250
650
0
MillionsofDollars
1970q1 1980q1 1990q1 2000q1 2010q1
Retail Print
0
3250
6500
Millionsof
Dollars
1970q1 1980q1 1990q1 2000q1 2010q1
Classified Print
0
1250
2500
Millionsof
Dollars
1970q1 1980q1 1990q1 2000q1 2010q1
Online
Source: Newspaper Association of America
Foote (Boston Fed) The Economy October 6, 2011 18 / 39
Newspapers and the Business Cycle
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Ad Revenues: Total Print and Online
0
750
0
1
5000
MillionsofDollars
1970q1 1980q1 1990q1 2000q1 2010q1
Recessions Total Print Online
Source: Newspaper Association of America
Foote (Boston Fed) The Economy October 6, 2011 19 / 39
Newspapers and the Business Cycle
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Classified Ad Revenues by Source
0
1000
200
0
MillionsofDollars
1995q1 2000q1 2005q1 2010q1
Auto
0
1250
250
0
MillionsofDollars
1995q1 2000q1 2005q1 2010q1
Real Estate
0
1250
2500
Millionsof
Dollars
1995q1 2000q1 2005q1 2010q1
Recruitment
0
500
1000
Millionsof
Dollars
1995q1 2000q1 2005q1 2010q1
Other
Source: Newspaper Association of America
Foote (Boston Fed) The Economy October 6, 2011 20 / 39
Newspapers and the Business Cycle
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Measures of Job Vacancies
0
3000
6000
ThousandsofOpenings
0
50
100
Index(1987=100)
1960m1 1970m1 1980m1 1990m1 2000m1 2010m1
Recessions
Index of HelpWanted Ads (left scale)
Job Openings from JOLTS (right scale)
Sources: Conference Board and Bureau of Labor Statistics
Foote (Boston Fed) The Economy October 6, 2011 21 / 39
Newspapers and the Business Cycle
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Circulation Levels
0
20
40
6
0
Millions
1950 1960 1970 1980 1990 2000 2010
Sunday
Morning
Evening
Source: Editor and Publisher Yearbook
Foote (Boston Fed) The Economy October 6, 2011 22 / 39
Newspapers and the Business Cycle
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Newspaper Readership by AgeSource: November 2008 supplement to the Current Population Survey
0
20
40
60
Everyday A few timesa week
A few timesa month
Once a month Not at all
20s 30s 40+ 20s 30s 40+ 20s 30s 40+ 20s 30s 40+ 20s 30s 40+
United States
0
20
40
60
Everyday A few times
a week
A few times
a month
Once a month Not at all
20s 30s 40+ 20s 30s 40+ 20s 30s 40+ 20s 30s 40+ 20s 30s 40+
New England
Foote (Boston Fed) The Economy October 6, 2011 23 / 39
Newspapers and the Business Cycle
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Educational Attainment in U.S. & New England
0
10
20
30
40
ShareofPop25+
US CT ME MA NH RI VT
Bachelors or greater
0
5
1
0
15
20
Shareo
fPop25+
US CT ME MA NH RI VT
Advanced degree
1990 2008
Foote (Boston Fed) The Economy October 6, 2011 24 / 39
Newspapers and the Business Cycle
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Newspaper Readership by EducationSource: November 2008 supplement to the Current Population Survey
0
20
40
60
Everyday A few timesa week
A few timesa month
Once a month Not at all
< Col Col < Col Col < Col Col < Col Col < Col Col
United States
0
20
40
60
Everyday A few times
a week
A few times
a month
Once a month Not at all
< Col Col < Col Col < Col Col < Col Col < Col Col
New England
Foote (Boston Fed) The Economy October 6, 2011 25 / 39
Newspapers and the Business Cycle
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News Magazine Readership by AgeSource: November 2008 supplement to the Current Population Survey
0
20
40
60
Everyday A few timesa week
A few timesa month
Once a month Not at all
20s 30s 40+ 20s 30s 40+ 20s 30s 40+ 20s 30s 40+ 20s 30s 40+
United States
0
20
40
60
Everyday A few times
a week
A few times
a month
Once a month Not at all
20s 30s 40+ 20s 30s 40+ 20s 30s 40+ 20s 30s 40+ 20s 30s 40+
New England
Foote (Boston Fed) The Economy October 6, 2011 26 / 39
Newspapers and the Business Cycle
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News Magazine Readership by EducationSource: November 2008 supplement to the Current Population Survey
0
20
40
60
80
Everyday A few timesa week
A few timesa month
Once a month Not at all
< Col Col < Col Col < Col Col < Col Col < Col Col
United States
0
20
40
60
80
Everyday A few times
a week
A few times
a month
Once a month Not at all
< Col Col < Col Col < Col Col < Col Col < Col Col
New England
Foote (Boston Fed) The Economy October 6, 2011 27 / 39
Recent Economic Policy Initiatives
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Unemployment and Inflation (Again)
3
2
1
0
1
2
3
4
5
6
7
8
9
10
Percent
3
2
1
0
1
2
3
4
5
6
7
8
9
10
Percent
1998m1 2000m1 2002m1 2004m1 2006m1 2008m1 2010m1 2012m1
Unemployment Rate
12Mo. Change in Core CPI
Foote (Boston Fed) The Economy October 6, 2011 29 / 39
Recent Economic Policy Initiatives
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Source: Federal Reserve Bank of San Francisco
Foote (Boston Fed) The Economy October 6, 2011 30 / 39
Recent Economic Policy Initiatives
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Federal Funds Rate
0
5
10
15
Perce
nt
Jan 1985 Jan 1990 Jan 1995 Jan 2000 Jan 2005 Jan 2010
Recessions Fed Funds Rate
Foote (Boston Fed) The Economy October 6, 2011 31 / 39
Recent Economic Policy Initiatives
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Federal Funds Rate and 10-Year Treasury Yield
0
5
10
15
Perce
nt
Jan 1985 Jan 1990 Jan 1995 Jan 2000 Jan 2005 Jan 2010
Recessions Fed Funds Rate 10Year Treasury Yield
Foote (Boston Fed) The Economy October 6, 2011 32 / 39
Recent Economic Policy Initiatives
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Foote (Boston Fed) The Economy October 6, 2011 33 / 39
Recent Economic Policy Initiatives
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Foote (Boston Fed) The Economy October 6, 2011 34 / 39
Recent Economic Policy Initiatives
H dli d C I fl ti
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Headline and Core Inflation
2
0
2
4
6
8
10
12
14
16
12m
o.P
er
cen
tCh
an
ge
2
0
2
4
6
8
10
12
14
16
12
mo.
Percen
tChange
Jan 1950 Jan 1960 Jan 1970 Jan 1980 Jan 1990 Jan 2000 Jan 2010
Recessions Headline CPI Core CPI
Source: Bureau of Labor Statistics.
Foote (Boston Fed) The Economy October 6, 2011 35 / 39
Recent Economic Policy Initiatives
S l t Slid
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Supplementary Slides
Foote (Boston Fed) The Economy October 6, 2011 36 / 39
Recent Economic Policy Initiatives
H P i
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House Prices
100
225
350
4
75
600
725
R
escaledPriceIndex
(1980:I=100)
1980q1 1990q1 2000q1 2010q1
United States CPI
Massachusetts New England
Foote (Boston Fed) The Economy October 6, 2011 37 / 39
Recent Economic Policy Initiatives
Employment Levels: Total Nonfarm Payrolls (Again)
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Employment Levels: Total Nonfarm Payrolls (Again)
100
105
110
115
120
TotalNonfarmEmploymen
t(Jan1995=100)
1995m1 2000m1 2005m1 2010m1
United States
Massachusetts
New England
Foote (Boston Fed) The Economy October 6, 2011 38 / 39
Recent Economic Policy Initiatives
Problems in Europe
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Problems in Europe
0
5
10
1
5
20
25
Percent
01jan2004 01jan2006 01jan2008 01jan2010 01jan2012
Germany
Greece
United Kingdom
Foote (Boston Fed) The Economy October 6, 2011 39 / 39