Chart 1 shows that, before the pandemic, growth in nominal earnings was comparable across all five earnings quintiles. But once the pandemic struck, the lowest quintile of earners saw the fastest rate of growth in earnings. Between the last quarter of 2019 and the last quarter of 2020, nominal earnings grew 7.2 percent for low-earning workers, compared with 5.6 percent for mid-earning workers and 3.4 percent for high-earning workers. This relatively rapid rise for low-income workers continued over the following year as their nominal earnings grew 7.7 percent, compared with 4.8 percent for mid-earning workers and 3.6 percent for high-earning workers.

Cumulatively in the two-year period, the gap in the total earnings gain between the top and bottom quintiles was more than 10 percentage points. Nevertheless, all five groups saw improvements in nominal earnings over that period.

The earnings gains in low-income groups concurs with the tightening of labor...

It is no secret that stock prices are sensitive to macroeconomic news suggesting some sort of broad economic development. Stocks especially react to news involving macroeconomic uncertainty.

These stock price movements provide an indication of how the market perceives such news. Moreover, price changes can directly affect consumption and investment decisions. What is less known is how corporate debt structure can help mitigate the negative effects of increased uncertainty on stock prices.

Our research suggests that increased uncertainty caused by the U.S.–China trade war negatively affected stock prices. Moreover, we found evidence that the way a firm structures its debt can mitigate a significant amount of the negative effects from uncertainty shocks, especially for zombie firms (mature firms that are persistently unable to generate enough profits to cover their interest expenses).

Like millions of people across the U.S., many residents of Doña Ana County in southern New Mexico struggle to find the internet access they need for school, work and daily life. The reality of what this looks like was brought home to Shelsea Benitez, a student at New Mexico State University, when she helped gather responses for a community broadband survey last fall. She learned about barriers such as cost and availability of internet providers—and about the lengths people would go to when they needed to get online.

“There are a lot more people than I thought that don’t have access to broadband,” Benitez said. “Many people shared that they would access the internet through libraries or cafes. Some even admitted they would steal their neighbor’s Wi-Fi.”

Doña Ana County is one of several communities participating in a Federal Reserve Bank of Dallas initiative to develop and implement local broadband plans that increase access for residents, especially low-income...

We offer paid, full-time summer internships for many majors, with challenging work and opportunities to grow.

To help launch your career, we provide dedicated staff mentors. You’ll also learn from senior leaders and industry experts. As part of the Federal Reserve System, you’ll be connected to a professional network that spans the nation.

Rent and owners’ equivalent rent (OER)—the amount of rent equivalent to the cost of ownership—are among the most important components of the Consumer Price Index (CPI) and the personal consumption expenditures (PCE) price index (Chart 1).

Since the COVID-19 pandemic began in February 2020, the inflation rates of rent and OER have declined sharply to around 2 percent in recent months, compared with 3.7 and 3.3 percent, respectively, before the pandemic. However, we expect rent inflation and OER inflation to accelerate in the years to come.

Downloadable chart | Chart data

There is evidence that house price growth historically has been useful when predicting the inflation rates of rent and OER. Given the recent surge in house prices, both rent inflation and OER inflation are expected to rise in the coming years. We present forecasts of these inflation rates and discuss the implications for overall inflation.

A Discussion of Economic Developments and Implications for Monetary Policy

September 08, 2021 Virtual

Dallas Fed President and CEO Rob Kaplan will discuss the economy and monetary policy in this virtual town hall moderated by Alfreda Norman, senior vice president at the Federal Reserve Bank of Dallas.

August 20, 2021

Texas employment grew at a 7.1 percent annualized rate in July after increasing by 4.3 percent in June. The Texas Leading Index decreased for the first time since March, primarily due to a rise in initial claims for unemployment insurance. The overall movement of the index over the past three months is still positive, however, suggesting positive growth over the next three to six months.   

Using a top-down model based on national forecasts, Texas COVID-19 hospitalizations and oil futures prices, we estimate that jobs will increase by 4.3 percent in 2021—down from last month’s estimate of 5.6 percent—with an 80 percent confidence band of 3.6 percent to 5.0 percent. Based on the forecast, 527,700 jobs will be added in the state this year, and employment in December 2021 will be 12.9 million (Chart 1). Part of the downward revision in growth for 2021 was the result of an early benchmark revision to Texas job growth in the first quarter...

Renewable electricity amounted to one-quarter of the power consumed in 2020, up from just 8 percent in 2010 (Chart 1). More is on the way, with solar capacity set to quadruple by 2024 from comparatively low levels today. Because availability can be intermittent, renewables require backup from other power plants to meet electricity demand.

Meanwhile, aging coal, nuclear and gas (together known as “thermal”) power plants in Texas require more-than-expected downtime for maintenance and repairs—raising the risk of generation falling short during high-demand periods. What’s more, Texas’ electricity consumption will only increase with population migration, electrification of transportation and growing demand from industrial sources such as data centers and petrochemical facilities.

Downloadable chart | Chart data

With little investment taking place in new thermal generation, does the design of Texas’ electricity market provide enough incentive to...

Energy sector stock market returns have outperformed the S&P 500 this year despite some easing over the summer. Refiner stocks lagged behind, but U.S. refiners have been processing more oil than at any point since the start of the pandemic amid recovering demand. Increases in U.S. and global consumption, rising oil prices and elevated regulatory costs pushed the retail price of motor fuel higher. Looking ahead, consumption growth of approximately 6.2 million barrels per day (mb/d) is expected over the six quarters ending in 2022, but there is significant uncertainty regarding the potential impact of the COVID-19 Delta variant on demand over the next few months.

A Conversation Between the Dallas Fed and Banco de México

September 01, 2021 Virtual

This free, online event will feature a moderated discussion between Banco de México Deputy Governor Irene Espinosa Cantellano and Dallas Fed Vice President and Senior Economist Pia Orrenius. Espinosa and Orrenius will discuss national and global economic issues as well as opportunities and challenges for women in economics, finance and banking. An audience Q&A will follow.

A Conversation Between the Dallas Fed and Banco de México

September 01, 2021 Virtual

This free, online event will feature a moderated discussion between Banco de México Deputy Governor Irene Espinosa Cantellano and Dallas Fed Vice President and Senior Economist Pia Orrenius. Espinosa and Orrenius will discuss national and global economic issues as well as opportunities and challenges for women in economics, finance and banking. An audience Q&A will follow.

Enrique Martínez-García, María Teresa Martínez-García, Jarod Coulter y Valerie Grossman

3 de agosto de 2021

El Decimoprimer Distrito tiene la segunda población hispanohablante más grande del Sistema de la Reserva Federal, con casi 11 millones de personas. Esta población va a continuar creciendo más, ya que se espera que el número de hispanos supere los 20 millones para el 2050 en Texas solamente.

Estas proyecciones crecientes sugieren que el uso del español probablemente continuará incrementándose. Sin embargo, materializar los beneficios económicos del bilingüismo sigue siendo un desafío, en parte debido a las limitaciones educativas existentes.

August 18, 2021 Virtual

On August 18, Robert S. Kaplan, president and CEO of the Dallas Fed, will discuss national and global economic issues with Sean Donohue, CEO of Dallas/Fort Worth International Airport.

Emerging-market volatility evidenced during the “taper tantrum” of 2013 arose because of low reserves and high foreign currency debt among emerging economies. Since 2013, many of them have improved their external balance sheets and would be much less vulnerable to Federal Reserve tapering today.

In May 2013, then-Fed Chairman Ben Bernanke first suggested that the Fed would begin reducing its program of asset purchases—Treasuries and mortgage-backed securities—commonly referred to as quantitative easing, or QE3, as a means of supporting the U.S. economy. That set off a market reaction—the taper tantrum—affecting the U.S. and nations abroad.

It led to higher interest rates and mortgage rates in the U.S. and falling capital inflows and balance of payment pressures elsewhere in the world, particularly in emerging markets.

August 6, 2021

Mexico’s gross domestic product (GDP) grew at an annualized 6.1 percent in second quarter 2021, faster than first-quarter growth of 3.1 percent. In June, the consensus GDP growth forecast for 2021 (fourth quarter/fourth quarter), compiled by Banco de México, increased from 3.5 percent to 4.0 percent.[1]

Mexico still faces headwinds from COVID-19. New cases have increased considerably over the past two months, nearing averages seen at the end of January. Vaccine progress has improved, but only 19 percent of the population has been fully vaccinated.

The latest data available show employment, industrial production, exports and retail sales grew. The peso/U.S. dollar exchange rate and inflation held steady in June.

The economy is in uncharted territory in more ways than one right now. Coming out of the worst of the pandemic, we're seeing a rapid pace of GDP growth, along with elevated inflation readings the likes of which we haven't seen in years. Beyond that, policymakers have engaged in historically aggressive fiscal and monetary expansion. The Fed, in particular, is almost a year into a new framework (unveiled last August at Jackson Hole) that aims to avoid certain mistakes of the past. So we sat down with Rob Kaplan, who has been the President of the Dallas Fed since 2015, to get his assessment of the situation right now.

A Virtual Conversation with Robert S. Kaplan and Rick Gallot

August 11, 2021 Virtual

On August 11, join us for a virtual discussion on the economy and monetary policy featuring Federal Reserve Bank of Dallas President Robert S. Kaplan and Grambling State University President Rick Gallot.

A bilingual population provides businesses a competitive advantage to reap the benefits of trade  and investment opportunities from a community of more than 580 million Spanish speakers worldwide. Additionally, in the U.S., immigration from Spanish-speaking countries helps offset an ongoing working-age population decline.

The disposable income of Spanish-language natives in the U.S. equals the size of Mexico’s economy. And within the Eleventh District—Texas, southern New Mexico and northern Louisiana—the large bilingual labor force has helped attract new firms, a cornerstone of the region’s growth.

More broadly, the ability to speak two languages has been linked to benefits that include enhanced cognitive ability, empathy and interpersonal skills and improved learning outcomes. Bilingual education from an early age can help children develop broader language skills and, ultimately, level the playing field for low-income families, some of which are recent...