Section 342 of the Dodd-Frank Act requires the St. Louis Fed to submit to Congress an annual report on its previous year's OMWI efforts. The St. Louis Fed's report, released March 31, 2021, is the 10th such report since the creation of its OMWI in January 2011. The report details the St. Louis Fed's 2020 OMWI activities related to employment, procurement and financial literacy. Read the 2020 report (PDF).

Past reports:

Recent economic research documents the existence of worker types that vary in their tendencies to switch jobs and flow in and out of unemployment (Gregory, Menzio, and Wiczer, 2021). Splitting up worker types in this way reveals interesting differences in how each type's earnings recover after a job loss. The type-composition of the unemployment pool is key for understanding labor market phenomena that have been active topics of research for decades.

As in Gregory, Menzio, and Wiczer (2021), we draw on the labor market experiences of three types of workers in the Census Bureau's Longitudinal Employer-Household Dynamics dataset.1 Alphas (57 percent of the workforce) tend to remain in stable employment and only exhibit short spells of unemployment. Gammas (17 percent of the workforce) tend to cycle through many short-lived jobs and are the most likely to become long-term unemployed. Betas (26 percent) are in between alphas and gammas.

When a worker loses their...

By William R. Emmons, Lead Economist in Supervision

The nationwide house price-to-rent ratio, a widely used measure of housing valuation that is analogous to the price-to-dividend ratio for the stock market, is at its highest level since at least 1975, as shown in the figure below. Rapid house price appreciation since last May, combined with a slowdown in rent growth, resulted in a surge in this ratio. By February 2021, the national house price-to-rent ratio had surpassed the previous peak reached in January 2006; in March 2021, the ratio was 1% higher than its level at the peak of the housing bubble. This suggests the average house now sells for quite a bit more than its “fair value,” as explained below.

Imagine a future where racial and gender labor market disparities don’t exist. How much would each state economy stand to gain? That’s the question behind this simulation. While we can’t predict the future, we can look to the past for clues.

For this thought experiment, we crunched the numbers for 15 years of data spanning 2005-2019. For every US state and Washington DC, we modeled how much gross domestic product (GDP) would have increased each year by eliminating racial and gender gaps in earnings, hours worked, educational attainment, and employment.

This simulation adapts methodology from a recent Federal Reserve working paper, which estimates that these gaps cost $2.6 trillion of foregone GDP nationally in 2019. Simulated GDP in our scenario assumes that every group has at least the same average labor-related measures as a comparison group that has historically faced the fewest systemic barriers in the labor market; for example, closing...

In an earlier post, the FRED Blog compared economic activity during the COVID-19-induced downturn and recovery across the G-7 countries: the U.S., the U.K., Japan, Canada, France, Germany, and Italy. Today, we focus on the U.S. and compare activity during the 2020-2021 downturn and recovery with activity during past episodes.

The FRED graph above plots the value of quarterly real (i.e., adjusted for inflation) GDP during and after the five most recent economic recessions: 1981-1982, 1990-1991, 2001, 2007-2009, and 2020-2021 (red dashed line). The billions of dollars reported by the U.S. Bureau of Economic Analysis are plotted as a custom index. The index has a value of 100 at the start of each recession, which is marked as the zero “date” on the left-hand side of the graph. Each period to the right of that “date” represents one quarter afterward.

In the 2001 recession, real GDP did not decrease. But in all the other economic contractions, real GDP fell...

Rather than being a typical recession, the COVID-19-related downturn wasn’t sparked by a financial crisis but by government policies and private sector responses to curbing the novel coronavirus. Large swaths of the service sector were affected by physical distancing and lockdowns. The restrictions severely impacted jobs and industries that require close personal contact, including health care, education and hospitality; those occupations tend to have large shares of women employees, the authors wrote.

“This is quite different from previous recessions that disproportionately reduced jobs in the traditionally male-dominated construction, transportation and manufacturing sectors,” Monge-Naranjo and Sun.

For instance, during the Great Recession, which fell within the May 2007 to November 2009 time frame, the unemployment rate for men increased to 11% from 4.6%; for women, it jumped to 8.6% from 4.4%. By contrast, in January 2020, the unemployment rate for both...

By Ana Hernández Kent, Senior Researcher, Institute for Economic Equity

Widespread racial, ethnic and gender economic disparities exist in the United States. These gaps represent lost potential—fewer innovations, less-diverse ideas, untapped talent and unrealized growth. Though these disparities most keenly affect minority communities and women, they also have an economic cost for everyone.

What exactly is that cost, and how much could the economy improve if the gaps didn’t exist?

Those are the exact questions that colleagues from across the Federal Reserve System and I set out to answer. The result was the creation of a data simulation tool offered for free to the public via Fed Communities, a website that highlights the Federal Reserve’s work in underserved communities.

Using the tool, one can visualize the estimated economic gain—measured by annual gross domestic product (GDP)—for each state and Washington, D.C.; this is the potential benefit...

By William R. Emmons, Lead Economist in Supervision

The U.S. housing bubble that peaked about 15 years ago was most pronounced in coastal regions (which I define as those with Pacific or Atlantic shorelines). Among the nation’s nine census divisions, three of the four with average house price-to-rent ratios above the national average at their respective peaks in 2005-07, the period that marked the peak of the housing boom, were located along the Pacific or Atlantic coasts: the Pacific, South Atlantic and New England divisions. Among inland divisions, only the Mountain states experienced above-average house price-to-rent ratios, a measure of housing valuation, at that time.

In the current housing boom, three of the five divisions with average housing valuations above the national average are inland—namely, the Mountain, West North Central and West South Central divisions. Even more striking, average housing valuations in all five inland divisions are higher now...

In an earlier post, the FRED Blog compared economic activity during the COVID-19-induced downturn and recovery across the G-7 countries: the U.S., the U.K., Japan, Canada, France, Germany, and Italy. Today, we focus on the U.S. and compare activity during the 2020-2021 downturn and recovery with activity during past episodes.

The FRED graph above plots the value of quarterly real (i.e., adjusted for inflation) GDP during and after the five most recent economic recessions: 1981-1982, 1990-1991, 2001, 2007-2009, and 2020-2021 (red dashed line). The billions of dollars reported by the U.S. Bureau of Economic Analysis are plotted as a custom index. The index has a value of 100 at the start of each recession, which is marked as the zero “date” on the left-hand side of the graph. Each period to the right of that “date” represents one quarter afterward.

In the 2001 recession, real GDP did not decrease. But in all the other economic contractions, real GDP fell...

Rather than being a typical recession, the COVID-19-related downturn wasn’t sparked by a financial crisis but by government policies and private sector responses to curbing the novel coronavirus. Large swaths of the service sector were affected by physical distancing and lockdowns. The restrictions severely impacted jobs and industries that require close personal contact, including health care, education and hospitality; those occupations tend to have large shares of women employees, the authors wrote.

“This is quite different from previous recessions that disproportionately reduced jobs in the traditionally male-dominated construction, transportation and manufacturing sectors,” Monge-Naranjo and Sun.

For instance, during the Great Recession, which fell within the May 2007 to November 2009 time frame, the unemployment rate for men increased to 11% from 4.6%; for women, it jumped to 8.6% from 4.4%. By contrast, in January 2020, the unemployment rate for both...

In an earlier post, the FRED Blog compared economic activity during the COVID-19-induced downturn and recovery across the G-7 countries: the U.S., the U.K., Japan, Canada, France, Germany, and Italy. Today, we focus on the U.S. and compare activity during the 2020-2021 downturn and recovery with activity during past episodes.

The FRED graph above plots the value of quarterly real (i.e., adjusted for inflation) GDP during and after the five most recent economic recessions: 1981-1982, 1990-1991, 2001, 2007-2009, and 2020-2021 (red dashed line). The billions of dollars reported by the U.S. Bureau of Economic Analysis are plotted as a custom index. The index has a value of 100 at the start of each recession, which is marked as the zero “date” on the left-hand side of the graph. Each period to the right of that “date” represents one quarter afterward.

In the 2001 recession, real GDP did not decrease. But in all the other economic contractions, real GDP fell...

Rather than being a typical recession, the COVID-19-related downturn wasn’t sparked by a financial crisis but by government policies and private sector responses to curbing the novel coronavirus. Large swaths of the service sector were affected by physical distancing and lockdowns. The restrictions severely impacted jobs and industries that require close personal contact, including health care, education and hospitality; those occupations tend to have large shares of women employees, the authors wrote.

“This is quite different from previous recessions that disproportionately reduced jobs in the traditionally male-dominated construction, transportation and manufacturing sectors,” Monge-Naranjo and Sun.

For instance, during the Great Recession, which fell within the May 2007 to November 2009 time frame, the unemployment rate for men increased to 11% from 4.6%; for women, it jumped to 8.6% from 4.4%. By contrast, in January 2020, the unemployment rate for both...

At the Federal Reserve Bank of St. Louis, we believe the Federal Reserve most effectively serves the American public by building a more diverse and inclusive economy. Our commitment to diversity and inclusion, at all levels of the organization, has been one of our core values for many years and remains strong as we work to continue enhancing our efforts.

Uncertainty and volatility are closely related but distinct concepts. People are uncertain if they lack confidence in their knowledge of the state of the world or future events. News is more likely to change the views of people with high uncertainty. In financial markets, changing views is associated with changing asset prices. Volatility denotes the size of changes in asset prices, so volatility is an ex post (after the fact) measure of uncertainty.

Uncertainty and volatility are carefully watched variables because of their relation to financial crises. During such periods, uncertainty often rises to high levels as the prices of risky assets, such as stocks, tend to fall. This produces a short-term, negative relation between uncertainty and returns.

FRED has a number of series that are related to uncertainty and/or volatility, some of which are derived from options data. One of the most frequently used such series is the Chicago Board of Options Exchange...

U.S. commercial lending spiked in May 2020 because of small-business participation in the Paycheck Protection Program. Households reined in their spending and use of credit as the economy worsened, unlike what they did during the last recession. Many lenders changed credit policies to offset risk, including tightening lending standards.

By William R. Emmons, Lead Economist in Supervision

The U.S. housing bubble that peaked about 15 years ago was most pronounced in coastal regions (which I define as those with Pacific or Atlantic shorelines). Among the nation’s nine census divisions, three of the four with average house price-to-rent ratios above the national average at their respective peaks in 2005-07, the period that marked the peak of the housing boom, were located along the Pacific or Atlantic coasts: the Pacific, South Atlantic and New England divisions. Among inland divisions, only the Mountain states experienced above-average house price-to-rent ratios, a measure of housing valuation, at that time.

In the current housing boom, three of the five divisions with average housing valuations above the national average are inland—namely, the Mountain, West North Central and West South Central divisions. Even more striking, average housing valuations in all five inland divisions are higher now...

Uncertainty and volatility are closely related but distinct concepts. People are uncertain if they lack confidence in their knowledge of the state of the world or future events. News is more likely to change the views of people with high uncertainty. In financial markets, changing views is associated with changing asset prices. Volatility denotes the size of changes in asset prices, so volatility is an ex post (after the fact) measure of uncertainty.

Uncertainty and volatility are carefully watched variables because of their relation to financial crises. During such periods, uncertainty often rises to high levels as the prices of risky assets, such as stocks, tend to fall. This produces a short-term, negative relation between uncertainty and returns.

FRED has a number of series that are related to uncertainty and/or volatility, some of which are derived from options data. One of the most frequently used such series is the Chicago Board of Options Exchange...

U.S. commercial lending spiked in May 2020 because of small-business participation in the Paycheck Protection Program. Households reined in their spending and use of credit as the economy worsened, unlike what they did during the last recession. Many lenders changed credit policies to offset risk, including tightening lending standards.