Assignment: Business Cycles Research Project
1. Using the Labor Force Statistics from the Population Survey Historical Data perform the following operations
a. Using data from the A-15 alternative measures of labor underutilization historical seasonally adjusted data for all months from 2008-2018 create four separate graphs representing the U3, U4, U5, & U6 rate (use the BLS graph generating function then cut images and past into this Word file)
b. For the period of the great recession (12/07-6/09), which metric of unemployment peaked first, second, third, last? Based on this, which would serve optimally as a leading indicator of a recovery?
c. Assuming the Civilian Non-institutional Population grows at the same rate as our overall population (1% average per year), determine how many jobs must be added per month to ensure all new Civilian Labor Force participants have a job available. (Use the January 2018 labor force participation rate to solve this problem) Based on your data from the January 2018 Establishment Survey did we achieve this goal?
2. Based on the ADP National Full Employment Report determine the following:
a. Compare the ADP report to the January 2018 BLS Establishment Survey. How many private sector jobs were created in both? Which report presents a more positive job market? If they differ in results what might be the cause (review how each survey is conducted in the economic indicators text)?
b. In January 2018, what business size witnessed the greatest amount of job growth and what was the number?
c. What sector witnessed the greatest job growth and what was the number?
d. What industry witnessed the greatest job growth and which witnessed the greatest job losses. What are the numbers?
e. The release of the ADP report is a different day than the establishment survey. Why does this matter (read economic indicators text for answer)?
3. Go to the Bureau of Labor Statistics website to answer the following
a. What was the seasonally adjusted number of employed, unemployed, and civilian labor force (not percentage but a count of people in correct denominations) for the total population in January of 2000 and for January 2018? Compare the sum of employed and unemployed to the civilian labor force, how do they relate?
4. Go to the Bureau of Labor Statistics Current Employment Statistics website and in sequence select "CES Databases" and "Top Picks" to find info about employment by industry. Use numbers only, not words: i.e. 100,000,000 instead of one hundred million. Round percentage answers to the nearest whole number.
a. How many people were employed in "total private" and "manufacturing" in December 2007, June 2009, and January 2018? Calculate the percentage increase or decrease for these two intervals (12/07-6/09 and 6/09-/1/18) round percentages to the tenth place. Based on the data, how did the Great Recession and subsequent recovery impact total private and manufacturing?
b. On average how many hours did people work in "total private" and "manufacturing" in December 2007, June 2009, and January 2018? Calculate the percentage increase or decrease for these two intervals (12/07-6/09 and 6/09-/1/17) round percentages to the tenth place. Based on the data, how did the Great Recession and subsequent recovery impact the share of manufacturing in the total private economy?
c. On average, what was the hourly wage of "total private" and "manufacturing" in December 2007, June 2009, and January 2018? Calculate the percentage increase or decrease for these two intervals (12/07-6/09 and 6/09-/1/18) round percentages to the tenth place. Based on the data, how did the Great Recession and subsequent recovery impact wages in total private relative to manufacturing?
d. How many people were employed in "manufacturing" and "leisure & hospitality" in January 1980 and January 2018? Calculate the percentage increase or decrease for both (round to a whole percent). What does this tell you about the structure of the U.S. economy over this time interval?
5. Using the JOLT report and unless specified otherwise, Dec. 2017 data, respond to each of the following:
a. What three industries under the total private category (exclude subcategories) had the highest percent of employment as demand for workers (job openings)? List the three and show their respective percent (round to whole percent) of total demand.
b. How many people were hired in manufacturing?
c. How many people were separated in manufacturing?
d. What was the change in the total separation rate (%) from Jan 17-Jan18; interpret.
e. Locate the change in the number of jobs in Dec 17 from the Establishment Survey and compare the difference between hires and separations in the JOLT report. Is the JOLT data consistent with the establishment survey figures? If not, what is the difference?
6. Using the January 2018 CPI and 2018 PPI determine the following:
a. Using Table A of the CPI data, identify the seasonally adjusted annualized monthly inflation rate for January 2018.
b. What subcategories in Table-A of the CPI data, added deflationary pressures to the CPI in January 2018 and by how much?
c. The Core CPI excludes food and energy and is one of the primary metrics the FED uses to determine its monetary policy, by how much did the Core CPI change on a seasonally unadjusted year over year basis from Feb 17-Feb 18?
d. Compare the year-over-year inflation rate for the seasonally unadjusted "All Items" category with the year-over-year inflation rate for the seasonally- unadjusted Core CPI category. Given these numbers, explain the discrepancy?
e. Using Table A of the PPI data and Table A of the CPI data, identify the change in total final demand prices and CPI all items prices for Jan 18. What is the numerical difference, if any?
f. Using Table A of the PPI data identify the price level change in total final, total final goods, and total final processed, for Jan 2018. Based on this data, how much more would the typical person who spends $10,000 on goods pay for their basket as a result of January 2018 inflation? What if they spend $500 a month on energy goods, how much would their energy bill increase?
g. Using Table-B of the PPI and the seasonally unadjusted change for unprocessed intermediate good demand, determine the year-over-year inflation rate for Jan18. Then calculate how much a business that purchases an average of $100,000 per month in these raw materials would have to pay as a result of January's inflation.
h. Based on your answer to g above, would you anticipate inflation or deflation in the CPI in the future?
7. Using the Industrial Production & Capacity Utilization Report, determine the following:
a. By how much did total industrial production grow from the base year 2012 to Jan 2018?
b. By how much did total industrial production change from Nov17-Dec17
c. Which major market group (including subcategories) grew the most year-over- year from Jan 17-Jan 18? By how much?
d. Which major market group (including subcategories) grew the least year-over- year from Jan 17-Jan 18? By how much?
e. What major industry group contracted their production from Dec17-Jan18? By how much?
f. What is the average total capacity utilization in the U.S over the past 40 years (round to a whole number)?
g. Which industry had the greatest change in capacity utilization from Nov 17-Dec 17?
h. Which stage of process group has historically had the highest capacity utilization? Which has had the lowest?
8. Using Table 1 Adjusted data for the Business Inventories Report respond to the following:
a. What is the dollar value of sales and inventories for Dec 17 (indicate correct numerical values, e.g. 100,000 thousands should be written as 100,000,000)
b. For Dec 17, calculate the percentage of sales, inventories account for.
c. Did inventories increase or decrease as a percentage of sales from Nov 17-Dec 17? By what percentage?
d. Determine the ratio of inventories to sales for retailers and manufacturers in Dec 17? Why the difference?
e. Based on total business inventory-sales ratios from Nov 17-Dec 17 would Keynes be encouraged or discouraged?
9. Using Table 1 from the PERSONAL INCOME AND SPENDING REPORT answer the following:
a. For Nov. 2017 what percent of personal income was earned in
i. Wages and salaries?
ii. Personal current transfer receipts?
iii. Personal income receipts on assets?
b. Determine the personal income in the month of Nov 17 (non-annualized).
c. What proportion of disposable income was SPENT in Nov 17?
d. Based on "c" above, is this a positive or negative sign for future economic growth according to the Keynesian perspective? What about the Classical perspective?
e. For Nov 17 calculate the proportion of "personal interest payments" to disposable personal income. Is this within the acceptable range based on the economic indicators text?
f. Using Nov 17 data fill in the following calculation: Personal income - personal current taxes = disposable income
10. Using the Retail Sales Report:
a. Table 1, calculate the Adjusted % change AND dollar change in Retail & Food Service Total from Jan 17 to Jan 18. Round percent to the hundredths.
b. Table 1, calculate the percentage AND dollar change in spending in Food Services and Drinking Places from January 2017 to January 2018 in monthly and annualized monthly terms. Round percent to the hundredths.
c. Table 2, determine which kind of business witnessed the greatest annual change from Jan 17 to Jan 18 and how much in percent terms?
11. Using the Schiller Home Price Index data:
a. Calculate the percent change in home values using the 20-city composite during the Great Recession from December 2007 to July 2009 (round to tenth of percent)
b. Do the same as above except for the specific cities of San Diego and Dallas (round to tenth of percent).
c. Calculate the 20 city composite index AND San Diego percent change from when the Great Recession ended (July 2009) to Dec 17 (round to tenth of percent)
12. Using the Consumer Confidence and Michigan Survey of Consumer Sentiment:
a. Review the Expected Change in Inflation Rates for the March Michigan Survey and determine what the expectation is for March 2018 and March 2019.
b. Review the Michigan Survey Index and determine how many index points the index changed from March 2017-March 2018
c. According to Michigan and Consumer Confidence Survey, each has two main indexes that are consolidated into the main index. Identify the most recent index number for the main and two sub-indexes for each.
13. Using the Existing Home Sales report and Median data:
a) How much (annualized percent rounded to tenth) did U.S. existing home prices change from November to December of 2017?
b) In December 2017, how many months of inventory were available on the market?
c) Using the inventory data, how many homes were on the market for sale in the month of December 2017?
d) Using the seasonally adjusted data, how many homes were sold in the month of December 2017 in the U.S.?
14. Using the Real Earnings report:
a. Imagine everything in the report is identical with the exception that February 2018 Real Average Weekly Earnings is $400. Calculate the Average Weekly Hours?
b. Imagine everything in the report is identical with the exception that February 2018 Average Hourly Earnings is $30. Using the CPI for all urban consumers calculate the Real Average Hourly Earnings.
c. Using the Real Average Hourly Earnings change from February 2017-2018 and the Average Hourly Earnings change over the same time frame, calculate how much the price level increased over this period.
15. Using the Employer Costs report:
a. Table 2, which occupational group has the highest percent of total compensation as retirement and savings
b. Table 1, for services what percentage of total benefits is retirement and savings?
c. Table 1, for the first 4 columns (i.e. all workers, management, sales/office, and service) calculate the percentage of wages/salaries as a portion of total compensation and list in order from least to greatest.
d. Table A, what percent employer costs in private industry are NOT wages and salaries?
16. Using the FOMC statement:
a. What is their inflation goal?
b. What is the target range for the Federal Funds Rate?
c. What is the overall outlook from the FED's perspective?
17. Using the Housing Starts and Building Permits report:
a. Using table 1a seasonally adjusted annual rates, how many new privately owned total U.S. housing units were issued permits in February 2018 (calculate the monthly, not the annual rates).
b. Using table 1a seasonally adjusted annual rates, what was the percent change in the total West from February 2017 to February 2018 (round percent to tenths)?
c. Using table 3a seasonally adjusted annual rates, how many new privately owned total U.S. housing units were started in February 2018 (calculate the monthly, not the annual rates).
d. Using table 5a seasonally adjusted annual rates, what was the percent change in the total South from February 2017 to February 2018 of privately owned new housing units actually completed (round percent to tenths)?
18. Use the following link to the Beige Book:
a. Locate information on the 12th district bank of San Francisco and the 2nd district bank of New York. After reading the reports compare and contrast at least 4 industries. How similar were economic conditions in the two regions? How different where they?
19. Using table 3 of the FOURTH QUARTER AND ANNUAL REAL GDP, perform the following:
a. Calculate real GDP for Q4-17 (not annualized)
b. Calculate the quarterly growth rate of real GDP from Q3-Q4 for 2017 (not annualized).
c. What was the percent composition of 2017 real personal consumption with respect to durables, non-durable, and services?
d. Calculate the GDP deflator for Q4 and Q3 of 2017. Compare the two and indicate how much prices rose over this time frame?
e. Identify the change in private inventory investment for Q1, Q2, Q3, & Q4 of 2017
f. What effect do the changes in inventory have on overall GDP?
g. With regard to f above, according to Keynesians what would this change likely do to future production and prices?
h. With regard to g above, according to Classical Economists what would this change likely do to future production and prices?