Cleveland (on the) rocks

Cleveland’s employment growth has lagged the nation’s for nearly 15 years, a fact that is often blamed on the kinds of industries that are here—either the area is burdened with too much manufacturing, or it has failed to attract enough high-tech industries. But an analysis shows little support for that view.Employment - Cleveland (Ohio) ; Economic conditions - Cleveland (Ohio)

Out of the shadows: projected levels for future REO inventory

Nearly one homeowner in ten is more than 90 days delinquent on his mortgage payment. Most of the homes under these mortgages are likely to be repossessed by lenders and resold, which has led some to call them a shadow inventory. How much these homes will affect the broader housing market depends on when they actually become available for sale and how long they remain on the market. Some analysts are concerned that a surge in the availability of repossessed or real-estate owned (REO) properties, or a persistently high level of them, could put downward pressure on prices. This could, in turn, induce additional foreclosures. This Commentary presents three possible scenarios for future REO inventory levels.Mortgage loans ; Foreclosure ; Housing - Finance

Employment surveys are telling the same (sad) story

Two government surveys are used to gather information about employment in the U.S. economy, but the employment levels calculated from each seem to provide conflicting pictures of the labor market. The surveys are very different, but when the differences are taken into account and the survey results are compared with their respective business-cycle patterns, the conflict disappears.Labor market ; Employment (Economic theory)

Demographic differences in inflation expectations: what do they really mean?

It has often been reported that different demographic groups show persistent differences in their inflation expectations. Some reasonable explanations have been suggested, but most have failed to fully explain these apparent differences. We argue that the demographic differences have been overstated by using the mean to describe differences across demographic groups. When we use the median to describe inflation expectations, we find little meaningful difference across demographic groups.Inflation (Finance) ; Demography

The demographics of inflation opinion surveys

In this Commentary, we document that people report very different perceptions and predictions of inflation depending upon their income, education, age, race, and gender — a strange finding that may provide an important clue to understanding how to interpret survey data of inflation expectations.Inflation (Finance) ; Forecasting

The curiously different inflation perspectives of men and women

That men and women occasionally see things differently is not a remarkable observation. But that the sexes could report vastly different perspectives on the rate at which prices are rising over a long period of time is astonishing. This Commentary describes the difference in inflation sentiment held by men and women — a puzzle that may hold the key to interpreting survey-based data on household inflation expectations.Inflation (Finance) ; Forecasting

Adjustable-rate mortgages and the Libor surprise

Adjustable-rate mortgages have typically been tied to either of two indexes, one based on U.S. treasuries, the other on the London interbank offered rate, or Libor. The index is used to determine a mortgage’s new interest rate when it is reset, and up until recently, the choice would have made little difference. But since 2007, the rates on which the indexes are based have diverged sharply, and borrowers with Libor-based adjustable-rate mortgages are likely to pay more than they would have had their mortgages been tied to treasuries. Moreover, the proportion of Libor-based ARMs has increased significantly, especially for subprime loans.Adjustable rate mortgages ; Interest rates