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Economic Research

Liberty Street Economics
The U.S. Oil Sector’s Role in Restraining Prices
The start of the Middle East conflict in early 2026 caused an unprecedented drop in global petroleum supply. In response, oil prices jumped—but not to unprecedentedly high levels. The U.S. oil sector was a key factor in moderating the shock. Its steady increases in drilling helped create a large oversupply in the global market before the conflict, making it less of a challenge to offset the drop in Middle East oil output. In addition, U.S. commercial and government inventories were rapidly drawn down, filling half the gap between global supply and demand in the second quarter by some estimates. Inventories, though, are a limited resource and U.S. stockpiles stopped falling in July. As a consequence, the continued shortall in global production has been managed by running down inventories in the rest of the world.
By Thomas Klitgaard
How Market Position Shapes Credit Card Interest Rates
Why can two borrowers who look much alike be offered very different rates when applying for a credit card? Drawing on their recent paper, the authors examine how the rate offered changes when the lender’s funding cost falls. Their data show that when a lender's funding costs decline, the lender passes less of that decline on to the offer rate when it holds a large market share, potentially resulting in offers with noticeably different credit card interest rates.
By Kyle Herkenhoff and Juan M. Morelli
Decorative image of small bank building with columns with a magnifying glass over it on a blue background that has a map of the world focusing on the U.S. in a dot pattern.
How Do Banking Supervisors Deal with Failing Banks?
Discussing insights from their recent staff report on the role of banking supervision in identifying and disciplining failing banks, the authors show that bank failures typically result from supervisory closure decisions based on hard information about book equity. They argue that supervision faces a trade-off: Stricter supervision can reduce the costs of resolving failing banks, but it can also lead to tighter regulatory capital constraints and hold back credit supply.
By Sergio Correia, Stephan Luck, and Emil Verner
Evaluating New LinkedIn Labor Market Tightness Indicators
The labor market is considered tight if there are few job seekers relative to job openings, implying stronger wage pressures as employers compete for workers. Thus, good measures of labor market tightness (LMT) are important for predicting wage inflation and calibrating monetary policy. Recently, LinkedIn began producing three innovative LMT measures based on user data. The authors use public data to evaluate the ability of these measures to predict wage and price inflation relative to existing LMT measures.
By Elizabeth B. Li, Giorgio Topa, and Jacob P. Weber
Assembly line workers adjusting machinery settings
Revenue per Worker Is Up. Are Firms Getting a Larger Share?
From the Great Recession until 2019, U.S. labor productivity growth disappointed. This was especially pronounced in manufacturing and coincided with a slowdown in the growth of revenue per worker among public firms. However, since 2019, growth has picked up to twice the 2010s rate: around 2 percent. The author shows that the acceleration appears in public firms’ revenue per worker, then documents both how the gains went into profit margins and what firm characteristics predicted significant profit margin increases.
By Jeremy Pearce
photo of construction of a large sprawling data center for artificial intelligence
Has the AI Boom Impacted the U.S. Current Account?
The AI boom is showing up in international trade. Imports of semiconductors, servers, and computing equipment have climbed sharply, yet the U.S. current account deficit has been largely unchanged. Why hasn’t the AI boom substantially affected the trade balance? The author points out that the current account is dictated by the gap between domestic saving and investment spending. Aggregate saving has not changed much, and aggregate investment has not risen due to weakness outside the AI sector.
By Julian di Giovanni
RESEARCH TOPICS
Applied Macroeconomics
and Econometrics Center
The mission of the Applied Macroeconomics and Econometrics Center (AMEC) is to provide intellectual leadership in the central banking community in the fields of macro and applied econometrics.

Data Releases
Global Supply Chain Pressure Index
(Updated: Monthly)

Labor Market Tightness Index
(Updated: Monthly)

Measuring the Natural Rate of Interest
(Updated: Quarterly)

Multivariate Core Trend Inflation
(Updated: Monthly)

The New York Fed DSGE Model
(Updated: Quarterly)

New York Fed Staff Nowcast
(Updated: Weekly)

Outlook-at-Risk
(Updated: Monthly)

Treasury Term Premia
(Updated: Daily)

Yield Curve as a Leading Indicator
(Updated: Monthly)
Center for Microeconomic Data
AI generated, people walking in office building.
Labor Market Tightness Index
The HPW Labor Market Tightness Index is an indicator of labor market tightness for summarizing current wage pressures and predicting wage inflation.
Photo: a four-panel picture of people cleaning up after natural disasters
Losses from Natural Disasters
Losses from Natural Disasters provides county-level estimates of the economic and human impact of extreme weather events in the United States.
Reserve Demand Elasticity (RDE)
RDE estimates provide a quantitative measure of the ampleness of reserves in the U.S. banking system in real time. New data are published monthly.
Economic Heterogeneity Indicators (EHIs)
The EHIs are broad-based economic indicators that measure macroeconomic outcomes experienced by different demographic, economic, and geographic groups on both a regional and national level.
Corporate Bond Market Distress Index (CMDI)
The CMDI is a summary metric of corporate bond market functioning based on information from multiple sources including measures of primary market issuance and pricing, secondary market pricing and liquidity conditions, and the relative pricing between traded and nontraded bonds. It updates monthly.
Regional Surveys
Monthly surveys conducted by the New York Fed track the sentiment of executives at regional manufacturing and service-sector firms regarding business conditions.

Data Releases
Empire State Manufacturing Survey
(Updated: Monthly)

Business Leaders Survey
(Updated: Monthly)

Regional Business Surveys:
Special Topics
(Updated: Quarterly)
Regional Employment Trends
These interactive charts track employment in state and metro regions in the Federal Reserve’s Second District, utilizing the New York Fed’s early benchmarks of payroll employment data. It updates monthly.
Mapping Home Price Changes
Explore year-over-year changes in home prices since 2003, both regionally and nationally, using this dynamic map — updated with new home price index data on a monthly basis. Hover over a county for granular data.
Early Benchmarked Employment Data
Monthly releases of early benchmarked employment figures for New York State, New Jersey, Puerto Rico, and the U.S. Virgin Islands, as well as the metropolitan areas in New York and Northern New Jersey
The Labor Market for Recent College Graduates
Labor market conditions improved for recent college graduates in the third quarter of 2026 but remained challenging. The unemployment rate fell to 5.2 percent, its lowest level in more than a year, though the underemployment rate ticked up to 42.5 percent.
Recent Publications
The Effects of Federal Funds Rate Changes on Household Debt
The authors study how monetary policy affects household debt in areas that are more and less exposed to changes in the Federal Funds Rate. Comparing more- and less-exposed counties, they find that monetary tightening increases the growth of adverse household debt outcomes, including delinquencies, foreclosures, and bankruptcies, and reduces credit score growth and borrowing for homes and cars in more-exposed counties.
Rajashri Chakrabarti, Kasey Chatterji-Len, Dan Garcia, and Maxim Pinkovskiy, Staff Report 1212
Remote Work from the Office
Roughly half of in-office days are spent entirely on Zoom calls or doing solo work according to a new survey of college-educated Americans. These workers commute in just to work remotely from the office. Existing measures of remote work that focus solely on working from home miss up to three quarters of its true prevalence. The authors use a collage of data to unpack the drivers of working remotely from the office.
Natalia Emanuel and Emma Harrington, Staff Report 1211, October 2026
From Moore’s Law to Eroom’s Law: Power Constraints and the Productivity Slowdown
Economic growth depends on combining existing inputs into new inventions, but these combinations are not always physically feasible. The author develops a growth model and establishes conditions for a unique balanced growth path, where electronic miniaturization and power efficiency grow at the same rate. When power-efficiency research becomes harder, both total research employment and productivity growth fall. With gradual adjustment of research employment, he constructs a local equilibrium transition in which more researchers temporarily coexist with slower productivity growth.
Pablo D. Azar, Staff Report 1209, October 2026
Consumption, Savings, and Earnings Responses to Financial Windfalls
How do individuals’ economic decisions change when their financial resources increase? The authors estimate the causal effects of a financial windfall on consumption, savings, and wage earnings using linked administrative data on a large sample of Canadian lottery winners. They estimate how lottery winnings affect consumption, measured through credit card spending, savings through financial asset accumulation and debt repayment, and wage earnings from tax records. They then examine how these responses vary across the income distribution.
Rajashri Chakrabarti, Philippe d’Astous, Kory Kroft, Sheisha Kulkarni, Vyacheslav Mikhed, Matthew J. Notowidigdo, Sahil Raina, and Barry Scholnick, Staff Report 1208, October 2026
Fleeting Forbearance in a World of Persistent Financial Distress
Relative to the persistent delinquency typically observed in consumer credit, mortgage forbearance during the COVID-19 pandemic was surprisingly short-lived. The authors use a structural model estimated on credit panel microdata, combined with survey data, to identify two forces that have received little attention in the literature: selection and expectations of income loss. They find that the power of forbearance, a frequent macroeconomic policy, hinges on borrower selection, shock realizations, and revisions to expectations following those realizations.
José Mustre-del-Río, Juan M. Sánchez, and Kartik Athreya. Staff Report 1207, October 2026
Cyclical Earnings, Career and Employment Transitions
Career changes across occupations are central to the cyclical behavior of workers’ earnings growth. The authors study the joint behavior of earnings risk and career changes over the business cycle. They demonstrate that career changes, which they observe as occupational mobility, are the main driver behind the cyclical patterns of the annual earnings growth distribution, and that employer mobility on its own does not contribute as much as occupational mobility in shaping cyclical earnings growth.
Carlos Carrillo-Tudela, Ludo Visschers, and David Wiczer, Staff Report 1206, September 2026
How Do Banks Build Equity Capital?
Understanding how bank equity capital evolves over time is critical to understanding the risks facing individual banks, the banking system, and the broader economy. The authors analyze the components of equity capital to document how U.S. bank holding companies built and depleted equity capital from 1990 to 2024. By bringing together earnings, stock issuance, and shareholder payouts within a unified framework, they quantify the contributions of these components and characterize the patterns that shape equity capital over time.
Lily Gordon and Beverly Hirtle, Economic Policy Review 32, no. 1, September
When Higher Stakes Weaken Security
Settlement systems are designed so that security rises with the stakes: when a bank clears a large payment, the legal framework behind it does not weaken. Proof-of-Work (PoW) blockchains attempt to replace this legal infrastructure with a purely incentive-based mechanism, substituting the authority of clearinghouses and courts with costly computation. The authors provide the first causal evidence that, in a major PoW blockchain, security can degrade with the value at stake.
Pablo D. Azar and Maryam Farboodi, Staff Report 1205, September 2026


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