Policy Points

02.11.2009 Policy Points Comments Off on Around the Dial – Nov. 2

Around the Dial – Nov. 2

Economic policy reports, blog postings, and media stories of interest:

02.11.2009 Policy Points Comments Off on Manufacturing Activity in the South Atlantic: Oct.

Manufacturing Activity in the South Atlantic: Oct.

From the Federal Reserve Bank of Richmond’s October survey of manufacturing activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Manufacturing activity in the central Atlantic region expanded for the sixth straight month but at a more moderate pace in October, according to the Richmond Fed’s latest survey. All broad indicators — shipments, new orders and employment — continued to grow but at a rate below September’s pace. Other indicators were mixed, however. Capacity utilization continued to grow more slowly, while backlogs fell further into negative territory. Vendor delivery times were virtually unchanged, while manufacturers reported slower growth in finished goods inventories.

02.11.2009 Policy Points Comments Off on Is the Recovery Package Working?

Is the Recovery Package Working?

In a new analysis, economist Josh Bivens of the Economic Policy Institute looks at the newest GDP report and identifies the effects of the American Recovery and Reinvestment Act (ARRA). Concludes Bivens:

All in all, the combined evidence—the timing of ARRA in relation to subsequent economic performance; the strong influence of taxes and transfers since ARRA; and direct data from Recovery.gov on the timing and composition of ARRA expenditures and tax-cuts—suggests that the recovery package has substantially boosted economic growth and created or saved 1.1 to 1.5 million jobs since its passage.

More specifically, Bivens considers the timing of the recovery package, the impact of income transfers and tax reductions, and direct evidence of ARRA’s role in job creation. Writes Bivens:

… estimates indicate that the recovery package contributed 2.7 percentage points to annualized GDP growth in the third quarter and that it has cumulatively added a full 1.6% to GDP since it was passed. Given that hours have fallen 25% faster than employment since the recession began, if pre-recession levels of average hours worked are targeted, this should translate into a 1.3% (1.6*(1-.25)) increase in employment, or 1.5 million jobs. If one wants to be conservative and note that the last two recoveries following recessions have been accompanied by a 30% rise in the rate of productivity growth (which, all else equal means that less employment is required for a given rate of GDP growth), the 1.6% bump to GDP would translate into something closer to 1.1 million jobs (1.3*(1-.3)) created or saved by the recovery package.

30.10.2009 Policy Points Comments Off on Weekend Wonk Out

Weekend Wonk Out

A round-up of policy reports from the week ending on 10/30:

30.10.2009 Policy Points Comments Off on Service Activity in the South Atlantic: Oct.

Service Activity in the South Atlantic: Oct.

From the Federal Reserve Bank of Richmond’s October survey of service-sector activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Service sector activity slumped in October, according to the latest survey by the Federal Reserve Bank of Richmond. Retail sales dropped as shopper traffic diminished and big-ticket sales declined. Inventories also fell, although reductions were less pervasive than a month ago. Services firms’ revenues also contracted in October. Looking ahead, survey respondents scaled back their expectations for business opportunities in the next six months.