Household spending fell sharply, especially on services, during the early days of the pandemic because of social distancing and business restrictions. On a nominal basis, spending on services only returned to pre-pandemic levels in June of this year, and adjusted for inflation, spending on services remains 3.1 percent below February 2020 levels. In contrast, durable goods consumption fell in March and April 2020 but by May of that year was essentially at pre-COVID-19 levels (both in real and nominal terms). As of June, inflation-adjusted durable goods spending is 22.7 percent above February 2020 levels.

We investigate the macroeconomic effects of changes in extreme weather in the United States over the past sixty years by incorporating the Actuaries Climate Index (ACI) into a smooth transition vector autoregressive analysis of the United States economy. The ACI tracks changes in the distribution of extreme temperatures, heavy rainfall, drought, high wind, and sea level. While the effects of extreme weather events are negligible at the beginning of the sample, they become more significant later: An increase in the index now persistently reduces the growth rate of industrial production while raising the unemployment rate and inflation.

In 1938, in the wake of the Great Depression, the Fair Labor Standards Act (FLSA) established the first federal minimum wage of 25 cents per hour. At that time, a limited number of states had minimum wage requirements, and even the 1938 act applied primarily to companies involved in interstate commerce or producing goods for interstate commerce. The most recent change in the federal minimum wage rate, enacted in 2007, raised the hourly rate from $5.15 to $7.25 by July 2009. But changes to minimum wage laws are neither consistent across states nor uncontroversial among economists. Many states, including some in the Fifth District, have enacted legislation in the last year to increase the minimum wage, and those increases will have both direct and indirect effects on workers, households, and businesses in the District. This article outlines both who will be affected and what those effects could be.

The Fifth District and Its Minimum Wages

State legislatures across...

In 1938, in the wake of the Great Depression, the Fair Labor Standards Act (FLSA) established the first federal minimum wage of 25 cents per hour. At that time, a limited number of states had minimum wage requirements, and even the 1938 act applied primarily to companies involved in interstate commerce or producing goods for interstate commerce. The most recent change in the federal minimum wage rate, enacted in 2007, raised the hourly rate from $5.15 to $7.25 by July 2009. But changes to minimum wage laws are neither consistent across states nor uncontroversial among economists. Many states, including some in the Fifth District, have enacted legislation in the last year to increase the minimum wage, and those increases will have both direct and indirect effects on workers, households, and businesses in the District. This article outlines both who will be affected and what those effects could be.

The Fifth District and Its Minimum Wages

State legislatures across...

In 1938, in the wake of the Great Depression, the Fair Labor Standards Act (FLSA) established the first federal minimum wage of 25 cents per hour. At that time, a limited number of states had minimum wage requirements, and even the 1938 act applied primarily to companies involved in interstate commerce or producing goods for interstate commerce. The most recent change in the federal minimum wage rate, enacted in 2007, raised the hourly rate from $5.15 to $7.25 by July 2009. But changes to minimum wage laws are neither consistent across states nor uncontroversial among economists. Many states, including some in the Fifth District, have enacted legislation in the last year to increase the minimum wage, and those increases will have both direct and indirect effects on workers, households, and businesses in the District. This article outlines both who will be affected and what those effects could be.

The Fifth District and Its Minimum Wages

State legislatures across...

In this Economic Brief, we give an overview of the changes that have taken place in the unemployment insurance system during the last two severe economic episodes: the Great Recession and the COVID-19 pandemic. We discuss how unemployment benefits supported households' consumer spending and whether it slowed labor market recovery.

You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

As a business, we focus on serving the needs of neighbors in our District, so it’s no surprise that giving back to our communities is an important part of our employee experience.

At the Richmond Fed, we’re committed to strengthening the economy and our communities – and we take that commitment seriously. Giving back and making a difference in our communities is important to our employees.

Each year, our Bank provides up to 16 hours of paid community service leave for employees to serve nonprofit organizations of their choice. While volunteering in our communities, we gain a better understanding of the people we serve in our District. Volunteering also provides opportunities for team building, new skill development and leadership experience.

Our Civic Engagement Office helps connect employees to a wide range of community service opportunities with local nonprofit organizations. For instance, Richmond Fed employees regularly participate in teaching...

Research staff regularly monitors the national economy, helping the Richmond Fed grasp current conditions and their implications for monetary policy. Updated weekly, the following data is part of the information presented during policy discussions and meetings with our board of directors.

You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more

Businesses with no employees other than the owner often turned to personal funds in response to financial challenges during the pandemic. These nonemployers were less likely than employer firms to seek pandemic-related emergency funding and less likely to be approved.

We identify shocks to household consumption using cross-sectoral information. We find that those shocks have accounted for close to 40 percent of pre-pandemic business cycle fluctuations in the U.S. Such shocks have the characteristics of demand shocks: They increase (or decrease) output, inflation and interest rates. The results imply that one might be able to significantly stabilize business cycles by stabilizing consumption fluctuations.

From helping the Virginia Department of Health with COVID-19 vaccinations as a member of the Community Emergency Response Team to volunteering with Southern Baptist Disaster Relief to help victims of ice storms, flooding and Tropical Storm Isaias, Anna put a variety of skills to work — including operating a chainsaw, providing onsite stress counseling, taking inventory of donated food, and scooping mud and muck from flooded houses.

Yet, when asked if her volunteer activities increased during the pandemic, she said “it actually slowed down.”

Anna — a senior business intelligence architect and member of our Ability Beyond the Label (ABLe) employee resource network — is driven by her faith and motivated by the joy of helping others who are experiencing difficult situations. Knowing that she has met a need and made a positive impact on someone’s life fulfills her as a community volunteer.

“Giving my time to focus on others helps me remember the world...

How do local government borrowing, default, and migration interact? We find in-migration results in excessive debt accumulation due to a key externality: Immigrants help repay previously-issued debt. In addition to providing direct IV evidence on this mechanism, we show cities are heavily indebted and remain so even after large population growth, resulting in boom defaults. While default rates are currently low, default risk has increased secularly despite the secular decline in interest rates, which we show lowered default risk else equal. Our quantitative model implies large interest rate declines in the Great Recession and COVID-19 crisis prevented default.