September 26, 2003
Better News Than I Thought We Would Get

Ah. The Census Poverty Report is better news than I thought we would get. The rise in poverty in 2002 over 2001 was small, as was the fall in median income. Poverty rises, incomes fall in latest Census report - Sep. 26, 2003: Poverty in the United States rose for the second straight year in 2002, while median incomes fell for the third straight year, the government said Friday. The percentage of Americans living in poverty rose to 12.1 percent from 11.7 percent in 2001, the Census Bureau reported, the highest rate since 12.9 percent in 1998. Median household income fell 1.1 percent to $42,409 from $42,900 in 2001. Median income was $43,848 in 2000 and $43,915 in 1999.... About 34.6 million people were in poverty in 2002, 1.7 million more than in 2001....

Posted by DeLong at 09:02 AM

September 18, 2003
These People Do Good Work Free Services: Bond Ticker Treasury Bond and Foreign Exchange Market Coverage Bond Brief Bond Market, Economic, and Fed Policy Analysis Fed Brief Fed Policy Outlook and Fed Events Calendar Rate Brief Interest Rate Outlook and Historical Charts Economic Calendar Upcoming Economic Releases with Forecasts...

Posted by DeLong at 07:59 AM

September 03, 2003
Econ 101b: Fall 2003: The Erosion of Okun's Law

We used to have considerable confidence in Okun's law: that an extra one percentage point rise (or fall) in the unemployment rate over a year would reduce (or boost) that real GDP growth by an extra 2.5 percent over that year because a rising (or falling) unemployment rate would also be accompanied by a falling (rising) share of the population in the labor force and by falling (rapidly rising) productivity. Productivity would fall when the unemployment rate rose for two reasons: first, even when factories are not running at full capacity they still incur substantial setup and maintenance costs; second, even when there isn't enough work for them to do firms would rather hold onto skilled workers than watch them drift away and have to pay to train their replacements the next time the wheel of the business cycle turns. Things have been different, however, in this recession (and to a lesser extent in the preceding early-1990s recession. The standard relationship between output growth and hours worked has gone substantially awry. See that branch poking out of the scatter diagram on the left side? That's the most recent data. (The smaller twig pointing out below and to the left...

Posted by DeLong at 04:22 PM

August 22, 2003
Census Maps

The Tiger Map Server Browser....

Posted by DeLong at 06:03 PM

September 11, 2002
August 2002 Economic Indicators

The August 2002 JEC-CEA Economic Indicators Browse the August 2002 Economic Indicators...

Posted by DeLong at 03:09 PM

September 08, 2002
Japan's Recession

The Japanese data revisions are in, and they are even worse than anyone--or at least than I--had feared, even fearing that they were worse than we hard feared. The second quarter of 2001 saw real GDP shrink at an 8 percent annual rate. The first quarter of 2002--which had supposedly seen GDP grow at 6 percent per year--was completely flat. All this leaves Japanese real GDP today some 2.5 percent below its level in the fourth quarter of 20002. Earlier this year, optimists could at least take solace from signs that the economy was rebounding in the first quarter, from a dismally deflationary 2001. It now turns out, however, that all of that growth was illusory. After revising the way it tots up the figures, the government announced at the end of August that GDP growth had been zero in the first quarter, not the 5.7% annual rate that was announced earlier. The second quarter was better, but not especially reassuring, with GDP rising at an annual rate of 1.9%. Industrial production rose sharply in April and May, but it tailed off again in June and July. Domestic demand refuses to show a convincing bounce, leaving the economy desperately...

Posted by DeLong at 06:06 AM

September 06, 2002
High-Tech Investment

High-Tech Investment If you read your business pages, you might well think that business purchases of computers are way down. Guess what? They're not. This year it looks like America's businesses are going to buy 13% more in the way of quality-adjusted computers and peripherals than in any previous year. In 2001--the only year in which real investment in computers and peripherals fell--quality-adjusted purchases fell by only 3%. Spending on computers and peripherals has indeed fallen. But that's because computers have become cheaper--a lot cheaper--not because American business is installing less computer power this year than in the past. Things look less bright if you aggregate up all high-tech investment--not just real investment in computers, but also software and "other": real investment in this broader category this year will be 4 percent below its year-2000 peak--but still higher than in any year other than 2000. Why the different pattern? The falloff in telecom investment. We are no longer spending a fortune digging holes and stuffing large quantities of fiber optic cables down them....

Posted by DeLong at 05:34 PM

American Labor Productivity Growth Trends

Labor Productivity Growth Trends Bill Nordhaus just gave a paper on U.S. productivity growth. One problem with the subject is that the year-to-year data are so noisy: errors in measuring output this year, errors in measuring output last year, errors in measuring hours worked this year, and errors in measuring hours worked last year all disturb the numbers reported for any given year. As a result, such papers almost always divide the time period up into a few chunks--1977-1989; 1989-1995; 1995-2001--and simply compare averages over those chunks. But the time series is considerably richer. So while Bill was talking, I found myself (a) taking the annual data, (b) adjusting productivity growth for the business cycle (for productivity growth jumps by 0.39 percent for each percentage point increase in this year's unemployment rate, and falls by 0.77 percent for each percentage point increase in last year's unemployment rate), and (c) taking a centered five-year moving average (using our current forecasts for 2002, and taking a truncated four-year not-centered moving average for 2001). The resulting series--the "actual" and the "trend"--are plotted as the green and the red line in the figure below: As a measure of the underlying pace of potential economic...

Posted by DeLong at 05:28 PM

BLS August Report

The Bureau of Labor Statistics reports that businesses employed 39,000 more people in August than they did in July (on a seasonally adjusted basis). The BLS also reports that its survey of households produces an estimate of 429,000 more Americans at work in August than in July. Which is more reliable? I have always trusted the business employment survey rather than the household survey as a more reliable business cycle indicator. This month, it is the one that is more pessimistic about the state of the economy. Employment Report...

Posted by DeLong at 01:33 PM

August 26, 2002
The Japanese Economy Is in Worse Shape Than I Had Thought

The Financial Times reports that recent Japanese economic statistics are about to be revised sharply downward--and that taken together the first and second quarters of 2002 will show a real GDP growth rate of only 1.5 percent per year. Thus the hopes--based on preliminary first-quarter statistics--that Japan was pulling out of its long depression appear to have been false. New data may cast doubt on Japan recovery By David Pilling in Tokyo Published: August 26 2002 17:22 | Last Updated: August 26 2002 17:22 Japan may this week drastically scale back preliminary estimates for first-quarter growth, removing much of the gloss from what many had hopefully interpreted as a sharp rebound from the country's worst post-war recession.An improvement in the methodology by which gross domestic product is calculated could see revised GDP numbers for the first three months, due to be published on Friday, fall to about half the initial estimate of 1.4 per cent. The original figure implied an annualised growth rate of an improbable 5.7 per cent."I think it is pretty much established that the new figures will show that GDP did not perform as well as originally stated because those initial figures were based on wildly exaggerated...

Posted by DeLong at 10:01 AM

August 14, 2002
Communications Gap

Alan Krueger reports that Paul Krugman had a good line last night on the Charlie Rose show. Paul Krugman was trying to illustrate how large the gaps are in how our statistical system covers the economy: If you look closely at the numbers, the U.S. is the world's leading exporter of errors and omissions... Of course, Rose had no clue about the point Paul was trying to make. Communication--especially on TV, where the sound bites are so short--is really, really hard....

Posted by DeLong at 09:45 AM

July 03, 2002
The Upward Shift in Gross Investment in America

Before the 1990s there was some evidence for a long, slowly-moving upward trend in the volume of investment relative to GDP. Many Republican politicians (and a few analysts) thought that the Reagan tax cuts of the early 1980s had generated an investment breakthrough: they looked at the rise in investment from 1982 to its 1984 peak, projected this rise forward, and forecast rapid economic growth as it was "morning in America." But whatever supply-side incentives did in the mid- and late-1980s to boost demand for investment funds, the large federal deficits (and the swing in the balance of payments back toward zero) did more to drain the pool of savings and reduce the supply of potential investment funds. Anomalously, the later 1984-1989 stage of the 1980s expansion saw not rising but falling investment relative to GDP. The 1990s, by contrast, saw a stunning explosion of investment in America. A fall in private savings was greatly outweighed by a combination of the Clinton administration's successful commitment to deficit reduction, the return of foreigners' willingness--nay, eagerness--to invest in America, and stunning declines in the relative prices of high-tech investment goods that gave firms undertaking investment projects much more bang for the buck....

Posted by DeLong at 01:12 PM

The Two Decade-Long Fall in America's Private Savings Rate

Of all the remarkable things to happen in the U.S. economy over the past two decades, the fall in the private savings rate must rank among the top ten. Net private savings in the United States--the sum of household savings on the one hand and business retained earnings on the other--used to fluctuate between nine and twelve percent of gross domestic product [NDP]. Then in the mid-1980s, during the Reagan years, private savings began to fall. This was a mystery: after all, the government was running substantial deficits, and there were theoretical reasons to believe that individuals might save more to offset the risk--nay, the certainty--that higher levels of government debt would one way or another increase their taxes in the future. Some argued that the private savings rate was fallen because the 1980s stock market boom had made people wealthier, and they wanted to spend some of that wealth. But the crash in inflation-adjusted stock market values in the 1970s had not led people to save more to offset their reduced stock-market wealth. It remained a puzzle. And the puzzle gathered strength in the 1990s. By the peak of the late-1990s boom, the private savings rate was only three...

Posted by DeLong at 12:57 PM