By the due date, upload into Blackboard this Word file with answers typed in red font. Grading is equally weighted based on letters, not numbers. Utilize only the data sources reviewed in class and in the Economic Indicator’s Text. The goal of this project is to develop and demonstrate competence in identifying sources, collecting appropriate data, and analyzing it to evaluate the health of the overall economy. Make sure to state the correct denominations including all respective zeros in your answers (e.g. 125,000 thousand should be written 125,000,000). In rare instances the most recent report will not include the data requested, in such a case you will need to locate the historic data sets available by the same organizations.
Business Cycles Research Project
Name: __________________________________Red-ID________________________
By the due date, upload into Blackboard this Word file with answers typed in red font. Grading is equally weighted based on letters, not numbers. Utilize only the data sources reviewed in class and in the Economic Indicator’s Text. The goal of this project is to develop and demonstrate competence in identifying sources, collecting appropriate data, and analyzing it to evaluate the health of the overall economy. Make sure to state the correct denominations including all respective zeros in your answers (e.g. 125,000 thousand should be written 125,000,000). In rare instances the most recent report will not include the data requested, in such a case you will need to locate the historic data sets available by the same organizations.
1. Using the GDP Report to determine the following:
a. Calculate the value of real GDP for the most recent quarter available (not annualized).
b. Calculate the quarterly growth rate of real GDP from the prior quarter to the most recent quarter (not annualized and rounded to a whole percent).
c. What was the percent composition the most recent quarter’s real personal consumption with respect to durables, non-durable, and services (round each to whole percent)?
d. Identify the change in real private inventory investment for the most recent quarter and what effect this had on the overall real GDP.
e. Determine the value of the most recent Net Exports using 2012 prices. Is there a trade surplus or deficit?
2. Using information from the most recent Employment Situation Report determine the following:
a. Using the seasonally adjusted alternative measures of labor underutilization data for all months from 2008-2020 create four separate graphs representing the U3, U4, U5, & U6 unemployment rates (cut and paste graphs into Word file–you may use the BLS graph generating function or create you own graphs in excel).
b. For the period of the great recession (12/07-6/09), which metric of unemployment had the highest peak unemployment rate? Why?
c. Assuming the Civilian Non-institutional Population grows at 1% average per year and using the February 2020 data, determine how many jobs must be added per month to ensure all new Civilian Labor Force participants have a job available. Based on your results, check the Establishment and ADP data and determine how many jobs were added, did we achieve our goal?
d. What was the seasonally adjusted number of employed, unemployed, and civilian labor force in February 2020 (not percentage but a count of people in correct denominations)?
e. What is the average wage and average number of hours worked in February 2020 and how did it change from the prior month? Based on this, is part-time employment increasing or decreasing and are there surpluses of shortages of labor in the market?
3. Based on the most recent labor data from ADP and the BLS determine the following:
a. How many jobs were created in February? 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 indicator’s text)?
b. What business size witnessed the greatest amount of job growth and what was the number?
c. What witnessed the greatest job growth and what was the number?
d. What sub-sector, or sub-sub-sector, of goods or services witnessed job losses? How many?
4. Using the Seasonally Adjusted data from the JOLT report, respond to each of the following:
a. How much higher was the jobs openings in December 2019 compared to the year prior? Is this a good or bad sign for the economy?
b. Identify the December 2019 separation rate in the private and government sectors, what does each mean?
c. What was the change in the total separation rate (%) from November to December 2019?
d. Compare the December 2019 change in the number of jobs in the Establishment Survey to the difference between hires and separations for the same month. Are the data consistent with each other or do they differ?
5. Using the most recent data from the CPI and PPI reports, determine the following:
a. What was the inflation rate for all items since January 2020?
b. What were the January 2020 monthly annualized inflation or deflation rates for Apparel and Gasoline?
c. Compare the most recent year-over-year overall inflation rate with the year-over-year Core inflation rate and explain any discrepancy?
d. Based on the January 2020’s monthly inflation rate, how much more would a typical consumer that spends $10,000 a year on the CPI basket have to spend as a result of that month’s inflation?
e. What was the actual CPI index in January 2020 for all goods? Based on this number how much did prices increase from the base years of 1982-1984?
f. Determine the January 2020’s monthly inflation rate for total final demand goods/services that producer’s like Walmart buy. Based on this rate and assuming they purchase an average of $10,000,000 per month in inventories, how much more or less will they spend?
g. Based on the most recent PPI, would you anticipate inflation of deflation in the CPI?
6. Using the most recent data from the FED Industrial Production and Capacity Report determine the following:
a. By how much did January 2020’s total industrial production grow from the base year?
b. By how much did January’s total industrial production change from the prior month?
c. In January which major market group (including all subcategories) grew the most and least year-over-year?
d. What major industry group contracted their January production and by how much?
e. What is the estimated average total capacity utilization in the U.S over the past 30+ years (round to a whole number)?
f. In January 2020 which stage of process group had the greatest growth in capacity utilization?
g. Which stage of process group has the highest historic capacity utilization rate and what is the rate? Which has had the lowest and what is the rate?
7. Using the most recent adjusted data from the Census Business Inventory Report respond to the following:
a. What is the dollar value of sales and inventories?
b. What percentage of sales do inventories account for?
c. From the prior month, did inventories increase or decrease as a percentage of sales and by what percentage?
d. Determine the ratio of inventories to sales for retailers and manufacturers and explain any difference?
e. From the prior month, did manufacturing inventory-sales ratios rise or fall and this a positive or negative signal for the sector?
8. Using the most recent Personal Income and Spending Report from the BLS, and specifically December 2019, respond to the following:
a. What percent of personal income was earned in:
i. Wages and salaries?
ii. Personal current transfer receipts?
b. Personal income receipts on assets? What was the non-annualized personal income?
c. What proportion of disposable income was saved and how much did the percent change from the prior month?
d. Based on “c” above, is this a positive or negative sign for future economic growth?
e. Calculate the proportion of disposable income that is accounted for by “personal interest payments”. Is this within the acceptable range based on the economic indicator’s text?
9. Using the December 2019’s adjusted monthly data from the Census Retail Sales Report determine the following:
a. Percent and Dollar change in Retail & Food Service from the prior month. Round percent to the hundredths.
b. Which kind of business witnessed the greatest annual percent change and by how much?
10. Using the Shiller Home Price Data determine the following:
a. 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 for the specific metro areas 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 December 2019 (round to tenth of percent)?
d. A home in San Diego that was $300,000 in July 2009 would be how much in December 2019 based on the index?
11. Using the most recent Consumer Confidence and Michigan Survey of Consumer Sentiment:
a. What are the expected inflation rates for the next year and next 5 years?
b. How many index points did each survey change in the most recent month and is this a positive or negative indicator of the economy?
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.
12. Using the Realtor’s Association Existing Home Sales Report and Median price data:
a. How much (annualized percent rounded to tenth) did U.S. existing home prices change from December 2018 to January 2020?
b. In December 2019, 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 2019?
d. Using the seasonally adjusted data, how many homes were sold in the month of December 2019 in the U.S.?
13. Using the BLS Rel Earnings Report determine the following:
a. Imagine everything in the report is identical with the exception that January 2020 Real Average Weekly Earnings is $400. Calculate the Average Weekly Hours?
b. Imagine everything in the report is identical with the exception that January 2020 Average Hourly Earnings is $30. Using the CPI for all urban consumers, calculate the Real Average Hourly Earnings.
14. Using BLS Employer Cost’s Report for September 2019:
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?
15. Using the FED’s 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?
16. Using the seasonally adjusted January 2020 Housing Start’s and Building Permit’s report from the Census determine the following:
a. How many new privately-owned total U.S. housing units were issued permits in January 2020 (calculate the monthly, not the annual rates).
b. What was the percent change in the total Western Region from December 2019 to January 2020 (round percent to tenths)?
c. How many new privately-owned total U.S. housing units were started in January 2020 (calculate the monthly, not the annual rates).
d. What was the percent change in the total Southern Region from December 2018 to January 2020 of privately-owned new housing units completed (round percent to tenths)?
17. Use the FED’s 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 at least 4 industries. How similar were economic conditions in the two regions? How different where they?
1.GDP:
https://www.bea.gov/data/gdp/gross-domestic-product
2.Employment SituationReport:
https://www.bls.gov/news.release/empsit.toc.htm
3.ADP:
https://adpemploymentreport.com/
4.JOLT :
https://www.bls.gov/jlt/news.htm
5.CPI and PPI :
https://www.bls.gov/cpi/news.htm
https://www.bls.gov/ppi/news.htm
6.Industrial Production and Capacity:
https://www.federalreserve.gov/releases/g17/current/
7.Business Inventory Report:
https://www.census.gov/mtis/index.html
8.Personal Income and Spending:
https://www.bea.gov/data/income-saving/personal-income
9.Retail Sales:
https://www.census.gov/retail/index.html
10.Shiller Home Price Data:
https://us.spindices.com/index-family/sp-corelogic-case-shiller/sp-corelogic-case-shiller-composite
11.Consumer Confidence:
https://www.conference-board.org/data/consumerconfidence.cfm
12.Existing Home Sales:
https://www.nar.realtor/research-and-statistics/housing-statistics
13.Rel Earnings:
https://www.bls.gov/news.release/realer.toc.htm
14. Employer Cost:
https://www.bls.gov/news.release/pdf/ecec
15.FED’s FOMC Statement:
https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm
16.Housing Start’s and Building:
https://www.census.gov/construction/nrc/index.html
17.FED’s Beige https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm