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Federal Reserve Board of Governors

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Figure 1--Projections of Unemployment

Unemployment Rate

Percent

Period History Blue Chip consensus FOMC central tendency Range between the top 10 and
bottom 10 Blue Chip projections
2010:Q1 9.8 ND ND ND
2010:Q2 9.6 ND ND ND
2010:Q3 9.5 ND ND ND
2010:Q4 9.6 ND ND ND
2011:Q1 9.0 ND ND ND
2011:Q2 9.1 ND ND ND
2011:Q3 9.1 ND ND ND
2011:Q4 8.7 ND ND ND
2012:Q1 8.3 8.3 ND 8.2 to 8.5
2012:Q2 ND 8.3 ND 8.0 to 8.6
2012:Q3 ND 8.2 ND 7.9 to 8.5
2012:Q4 ND 8.1 8.2 to 8.5 7.7 to 8.5
2013:Q1 ND 8.0 ND 7.5 to 8.4
2013:Q2 ND 7.8 ND 7.4 to 8.3
2013:Q3 ND 7.7 ND 7.1 to 8.3
2013:Q4 ND 7.6 7.4 to 8.1 7.0 to 8.2
2014:Q1 ND 7.45 ND 6.75 to 8.05
2014:Q2 ND 7.3 ND 6.6 to 7.9
2014:Q3 ND 7.15 ND 6.45 to 7.75
2014:Q4 ND 7.0 6.7 to 7.6 6.3 to 7.6

FOMC central tendency for longer-run unemployment rate: 5.2 to 6.0

Source: U.S. Department of Labor, Bureau of Labor Statistics; Blue Chip survey; Federal Open Market Committee (FOMC) projections. Blue Chip survey projections are taken from Blue Chip Economic Indicators, a publication owned by Aspen Publishers. Copyright (c) 2012 by Aspen Publishers, Inc. (www.aspenpublishers.com). All rights reserved.


 

Figure 2--Uncertainty about Unemployment Projections

[Identical to Figure 1, except that the range between the top 10 and bottom 10 Blue Chip projections is replaced by a 70 percent confidence interval.]

Unemployment Rate

Percent

Period History Blue Chip consensus FOMC central tendency 70 percent confidence interval
2010:Q1 9.8 ND ND ND
2010:Q2 9.6 ND ND ND
2010:Q3 9.5 ND ND ND
2010:Q4 9.6 ND ND ND
2011:Q1 9.0 ND ND ND
2011:Q2 9.1 ND ND ND
2011:Q3 9.1 ND ND ND
2011:Q4 8.7 ND ND ND
2012:Q1 8.3 8.3 ND 8.45 to 8.86
2012:Q2 ND 8.3 ND 8.18 to 8.92
2012:Q3 ND 8.2 ND 7.91 to 8.97
2012:Q4 ND 8.1 8.2 to 8.5 7.68 to 9.01
2013:Q1 ND 8.0 ND 7.38 to 8.98
2013:Q2 ND 7.8 ND 7.08 to 8.94
2013:Q3 ND 7.7 ND 6.83 to 8.90
2013:Q4 ND 7.6 7.4 to 8.1 6.61 to 8.85
2014:Q1 ND 7.45 ND 6.38 to 8.78
2014:Q2 ND 7.3 ND 6.23 to 8.71
2014:Q3 ND 7.15 ND 6.10 to 8.65
2014:Q4 ND 7.0 6.7 to 7.6 5.98 to 8.58

FOMC central tendency for longer-run unemployment rate: 5.2 to 6.0

Source: U.S. Department of Labor, Bureau of Labor Statistics; Blue Chip survey; Federal Open Market Committee (FOMC) projections. Blue Chip survey projections are taken from Blue Chip Economic Indicators, a publication owned by Aspen Publishers. Copyright (c) 2012 by Aspen Publishers, Inc. (www.aspenpublishers.com). All rights reserved.


 

Figure 3--The Beveridge Curve since 2007

2007:Q1 to 2012:Q1

[Unemployment rate on the x-axis, vacancy rate on the y-axis]

Period Unemployment rate (percent) Vacancy rate (index)
2007:Q1 4.5 3.17
2007:Q2 4.5 3.16
2007:Q3 4.7 2.96
2007:Q4 4.8 2.82
2008:Q1 5.0 2.76
2008:Q2 5.3 2.56
2008:Q3 6.0 2.48
2008:Q4 6.9 2.33
2009:Q1 8.3 1.90
2009:Q2 9.3 1.82
2009:Q3 9.6 1.91
2009:Q4 9.9 1.98
2010:Q1 9.8 2.18
2010:Q2 9.6 2.21
2010:Q3 9.5 2.24
2010:Q4 9.6 2.25
2011:Q1 9.0 2.48
2011:Q2 9.1 2.53
2011:Q3 9.1 2.46
2011:Q4 8.7 2.42
2012:Q1 8.2 2.52

Note: The vacancy rate is given by an index of help-wanted advertisements divided by the labor force.

Source: For unemployment rate, U.S. Department of Labor, Bureau of Labor Statistics; for help-wanted advertisements, Conference Board and Barnichon (2010).


 

Figure 4--The Evolution of the Beveridge Curve

[Identical to Figure 3, except for the addition of two curves; unemployment rate on the x-axis, vacancy rate on the y-axis]

1973:Q4 to 1976:Q2

Period Unemployment rate (percent) Vacancy rate (index)
1973:Q4 4.8 5.16
1974:Q1 5.1 4.90
1974:Q2 5.2 4.91
1974:Q3 5.6 4.53
1974:Q4 6.6 3.77
1975:Q1 8.2 3.26
1975:Q2 8.9 3.29
1975:Q3 8.5 3.47
1975:Q4 8.3 3.59
1976:Q1 7.7 3.79
1976:Q2 7.6 3.88


 

1979:Q2 to 1983:Q4

Period Unemployment rate (percent) Vacancy rate (index)
1979:Q2 5.7 5.64
1979:Q3 5.9 5.60
1979:Q4 5.9 5.53
1980:Q1 6.3 5.15
1980:Q2 7.3 4.30
1980:Q3 7.7 4.36
1980:Q4 7.4 4.51
1981:Q1 7.4 4.41
1981:Q2 7.4 4.39
1981:Q3 7.4 4.25
1981:Q4 8.2 3.80
1982:Q1 8.8 3.56
1982:Q2 9.4 3.26
1982:Q3 9.9 2.90
1982:Q4 10.7 2.85
1983:Q1 10.4 2.99
1983:Q2 10.1 3.29
1983:Q3 9.4 3.64
1983:Q4 8.5 4.02


 

2007:Q1 to 2012:Q1

Period Unemployment rate (percent) Vacancy rate (index)
2007:Q1 4.5 3.17
2007:Q2 4.5 3.16
2007:Q3 4.7 2.96
2007:Q4 4.8 2.82
2008:Q1 5.0 2.76
2008:Q2 5.3 2.56
2008:Q3 6.0 2.48
2008:Q4 6.9 2.33
2009:Q1 8.3 1.90
2009:Q2 9.3 1.82
2009:Q3 9.6 1.91
2009:Q4 9.9 1.98
2010:Q1 9.8 2.18
2010:Q2 9.6 2.21
2010:Q3 9.5 2.24
2010:Q4 9.6 2.25
2011:Q1 9.0 2.48
2011:Q2 9.1 2.53
2011:Q3 9.1 2.46
2011:Q4 8.7 2.42
2012:Q1 8.2 2.52

Note: The vacancy rate is given by an index of help-wanted advertisements divided by the labor force.

Source: For unemployment rate, U.S. Department of Labor, Bureau of Labor Statistics; for help-wanted advertisements, Conference Board and Barnichon (2010).


 

Figure 5--Okun's Law

Q4/Q4 Changes in Real GDP and Unemployment since 1990

[Scatterplot; change in real GDP on the x-axis, change in unemployment on the y-axis]

Period Q4/Q4 percent change in real GDP, percentage points Q4/Q4 change in unemployment, percentage points
1990 0.56 0.75
1991 1.00 0.98
1992 4.31 0.31
1993 2.69 -0.79
1994 4.16 -1.00
1995 2.01 -0.05
1996 4.44 -0.26
1997 4.34 -0.63
1998 4.98 -0.25
1999 4.82 -0.35
2000 2.91 -0.16
2001 0.40 1.62
2002 1.94 0.31
2003 3.87 -0.03
2004 2.90 -0.43
2005 2.81 -0.44
2006 2.38 -0.50
2007 2.21 0.35
2008 -3.32 2.08
2009 -0.54 3.06
2010 3.14 -0.37
2011 1.61 -0.87

As shown in the figure, a trend line with negative slope runs between approximately (-3.35, 2.43) and (4.94, -0.78).

Source: U.S. Department of Commerce, Bureau of Economic Analysis; U.S. Department of Labor, Bureau of Labor Statistics.


 

Figure 6--Projections of Inflation

PCE Price Index

4-quarter percent change

Period History Blue Chip consensus FOMC central tendency 70 percent confidence interval
2010:Q1 2.38 ND ND ND
2010:Q2 1.99 ND ND ND
2010:Q3 1.48 ND ND ND
2010:Q4 1.28 ND ND ND
2011:Q1 1.78 ND ND ND
2011:Q2 2.53 ND ND ND
2011:Q3 2.87 ND ND ND
2011:Q4 2.67 ND ND ND
2012:Q1 ND 2.2 ND 1.53 to 2.25
2012:Q2 ND 1.9 ND 1.21 to 2.48
2012:Q3 ND 1.7 ND 0.91 to 2.63
2012:Q4 ND 1.9 1.4 to 1.8 0.64 to 2.76
2013:Q1 ND 1.9 ND 0.61 to 2.83
2013:Q2 ND 1.9 ND 0.57 to 2.87
2013:Q3 ND 2.0 ND 0.57 to 2.93
2013:Q4 ND 2.0 1.4 to 2.0 0.50 to 3.02
2014:Q1 ND 2.05 ND 0.52 to 3.06
2014:Q2 ND 2.1 ND 0.51 to 3.08
2014:Q3 ND 2.15 ND 0.47 to 3.12
2014:Q4 ND 2.2 1.6 to 2.0 0.46 to 3.11

Note: Blue Chip CPI projection adjusted to PCE basis.

Source: U.S. Department of Commerce, Bureau of Economic Analysis; Blue Chip survey; Federal Open Market Committee (FOMC) projections. Blue Chip survey projections are taken from Blue Chip Economic Indicators, a publication owned by Aspen Publishers. Copyright (c) 2012 by Aspen Publishers, Inc. (www.aspenpublishers.com). All rights reserved.


 

Figure 7--Optimal Control Simulations

Federal Funds Rate

Percent

Period Illustrative baseline Optimal control
2011:Q1 0.16 0.16
2011:Q2 0.09 0.09
2011:Q3 0.08 0.08
2011:Q4 0.07 0.07
2012:Q1 0.13 0.13
2012:Q2 0.13 0.13
2012:Q3 0.13 0.12
2012:Q4 0.13 0.10
2013:Q1 0.13 0.09
2013:Q2 0.13 0.08
2013:Q3 0.13 0.08
2013:Q4 0.13 0.09
2014:Q1 0.13 0.09
2014:Q2 0.13 0.11
2014:Q3 0.13 0.12
2014:Q4 0.13 0.14
2015:Q1 0.43 0.16
2015:Q2 0.73 0.18
2015:Q3 1.03 0.23
2015:Q4 1.33 0.34
2016:Q1 1.63 0.58
2016:Q2 1.93 0.92
2016:Q3 2.23 1.33
2016:Q4 2.53 1.78
2017:Q1 2.83 2.23
2017:Q2 3.13 2.67
2017:Q3 3.43 3.08
2017:Q4 3.73 3.44
2018:Q1 4.00 3.75
2018:Q2 4.00 4.01
2018:Q3 4.00 4.20
2018:Q4 4.00 4.33


 

Unemployment Rate

Percent

Period Illustrative baseline Optimal control
2011:Q1 8.99 8.99
2011:Q2 9.07 9.07
2011:Q3 9.06 9.06
2011:Q4 8.70 8.70
2012:Q1 8.65 8.65
2012:Q2 8.55 8.55
2012:Q3 8.45 8.43
2012:Q4 8.35 8.29
2013:Q1 8.20 8.09
2013:Q2 8.05 7.88
2013:Q3 7.90 7.67
2013:Q4 7.75 7.45
2014:Q1 7.60 7.24
2014:Q2 7.45 7.03
2014:Q3 7.30 6.82
2014:Q4 7.15 6.61
2015:Q1 7.00 6.41
2015:Q2 6.85 6.21
2015:Q3 6.70 6.02
2015:Q4 6.55 5.83
2016:Q1 6.41 5.65
2016:Q2 6.29 5.50
2016:Q3 6.18 5.38
2016:Q4 6.10 5.29
2017:Q1 6.02 5.23
2017:Q2 5.96 5.19
2017:Q3 5.90 5.18
2017:Q4 5.86 5.18
2018:Q1 5.82 5.19
2018:Q2 5.79 5.23
2018:Q3 5.76 5.27
2018:Q4 5.74 5.32


 

PCE Inflation

4-quarter percent change

Period Illustrative baseline Optimal control
2011:Q1 1.78 1.78
2011:Q2 2.53 2.53
2011:Q3 2.87 2.87
2011:Q4 2.67 2.67
2012:Q1 1.90 1.90
2012:Q2 1.80 1.90
2012:Q3 1.70 1.88
2012:Q4 1.60 1.87
2013:Q1 1.63 1.99
2013:Q2 1.65 2.02
2013:Q3 1.68 2.07
2013:Q4 1.70 2.11
2014:Q1 1.73 2.14
2014:Q2 1.75 2.16
2014:Q3 1.78 2.19
2014:Q4 1.80 2.21
2015:Q1 1.84 2.24
2015:Q2 1.87 2.27
2015:Q3 1.90 2.28
2015:Q4 1.92 2.29
2016:Q1 1.93 2.30
2016:Q2 1.95 2.30
2016:Q3 1.96 2.30
2016:Q4 1.97 2.30
2017:Q1 1.97 2.29
2017:Q2 1.98 2.28
2017:Q3 1.98 2.27
2017:Q4 1.99 2.25
2018:Q1 1.99 2.23
2018:Q2 1.99 2.20
2018:Q3 1.99 2.18
2018:Q4 1.99 2.14



 

Figure 8--Simple Policy Rules

Federal Funds Rate

Percent

Period Optimal control Taylor 1999 Taylor 1993
2011:Q1 0.16 0.16 0.16
2011:Q2 0.09 0.09 0.09
2011:Q3 0.08 0.08 0.08
2011:Q4 0.07 0.07 0.07
2012:Q1 0.13 0.13 0.13
2012:Q2 0.13 0.13 0.24
2012:Q3 0.12 0.13 0.14
2012:Q4 0.10 0.13 0.13
2013:Q1 0.09 0.13 0.13
2013:Q2 0.08 0.13 0.30
2013:Q3 0.08 0.13 0.44
2013:Q4 0.09 0.13 0.58
2014:Q1 0.09 0.13 0.73
2014:Q2 0.11 0.13 0.88
2014:Q3 0.12 0.13 1.04
2014:Q4 0.14 0.13 1.20
2015:Q1 0.16 0.52 1.38
2015:Q2 0.18 0.91 1.57
2015:Q3 0.23 1.29 1.76
2015:Q4 0.34 1.65 1.96
2016:Q1 0.58 2.00 2.15
2016:Q2 0.92 2.29 2.33
2016:Q3 1.33 2.53 2.50
2016:Q4 1.78 2.75 2.67
2017:Q1 2.23 2.94 2.83
2017:Q2 2.67 3.11 2.98
2017:Q3 3.08 3.26 3.13
2017:Q4 3.44 3.40 3.28
2018:Q1 3.75 3.53 3.43
2018:Q2 4.01 3.65 3.57
2018:Q3 4.20 3.76 3.70
2018:Q4 4.33 3.85 3.82


 

Unemployment Rate

Percent

Period Optimal control Taylor 1999 Taylor 1993
2011:Q1 8.99 8.99 8.99
2011:Q2 9.07 9.07 9.07
2011:Q3 9.06 9.06 9.06
2011:Q4 8.70 8.70 8.70
2012:Q1 8.65 8.65 8.65
2012:Q2 8.55 8.55 8.55
2012:Q3 8.43 8.45 8.47
2012:Q4 8.29 8.35 8.40
2013:Q1 8.09 8.21 8.29
2013:Q2 7.88 8.06 8.19
2013:Q3 7.67 7.91 8.09
2013:Q4 7.45 7.76 8.00
2014:Q1 7.24 7.62 7.90
2014:Q2 7.03 7.47 7.80
2014:Q3 6.82 7.32 7.70
2014:Q4 6.61 7.18 7.59
2015:Q1 6.41 7.03 7.48
2015:Q2 6.21 6.88 7.35
2015:Q3 6.02 6.74 7.22
2015:Q4 5.83 6.59 7.07
2016:Q1 5.65 6.45 6.92
2016:Q2 5.50 6.33 6.79
2016:Q3 5.38 6.23 6.66
2016:Q4 5.29 6.14 6.53
2017:Q1 5.23 6.06 6.42
2017:Q2 5.19 5.99 6.31
2017:Q3 5.18 5.92 6.20
2017:Q4 5.18 5.86 6.10
2018:Q1 5.19 5.81 6.01
2018:Q2 5.23 5.76 5.92
2018:Q3 5.27 5.71 5.84
2018:Q4 5.32 5.68 5.78


 

PCE Inflation

4-quarter percent change

Period Optimal control Taylor 1999 Taylor 1993
2011:Q1 1.78 1.78 1.78
2011:Q2 2.53 2.53 2.53
2011:Q3 2.87 2.87 2.87
2011:Q4 2.67 2.67 2.67
2012:Q1 1.90 1.90 1.90
2012:Q2 1.90 1.80 1.76
2012:Q3 1.88 1.71 1.63
2012:Q4 1.87 1.61 1.49
2013:Q1 1.99 1.65 1.48
2013:Q2 2.02 1.67 1.52
2013:Q3 2.07 1.70 1.54
2013:Q4 2.11 1.73 1.56
2014:Q1 2.14 1.75 1.58
2014:Q2 2.16 1.78 1.61
2014:Q3 2.19 1.81 1.63
2014:Q4 2.21 1.83 1.66
2015:Q1 2.24 1.88 1.70
2015:Q2 2.27 1.91 1.72
2015:Q3 2.28 1.93 1.75
2015:Q4 2.29 1.96 1.77
2016:Q1 2.30 1.97 1.78
2016:Q2 2.30 1.98 1.80
2016:Q3 2.30 1.99 1.81
2016:Q4 2.30 2.00 1.83
2017:Q1 2.29 2.00 1.85
2017:Q2 2.28 2.00 1.86
2017:Q3 2.27 2.00 1.88
2017:Q4 2.25 2.00 1.91
2018:Q1 2.23 2.01 1.93
2018:Q2 2.20 2.01 1.96
2018:Q3 2.18 2.01 1.99
2018:Q4 2.14 2.02 2.01



 

Figure 9--Uncertainty and Policy Conditionality

Federal Funds Rate

Percent

Period Baseline using Taylor 1999 Stronger recovery Weaker recovery
2011:Q1 0.16 0.16 0.16
2011:Q2 0.09 0.09 0.09
2011:Q3 0.08 0.08 0.08
2011:Q4 0.07 0.07 0.07
2012:Q1 0.13 0.13 0.13
2012:Q2 0.13 0.13 0.13
2012:Q3 0.13 0.13 0.13
2012:Q4 0.13 0.13 0.13
2013:Q1 0.13 0.13 0.13
2013:Q2 0.13 0.13 0.13
2013:Q3 0.13 0.13 0.13
2013:Q4 0.13 0.13 0.13
2014:Q1 0.13 0.61 0.13
2014:Q2 0.13 1.36 0.13
2014:Q3 0.13 2.06 0.13
2014:Q4 0.13 2.66 0.13
2015:Q1 0.52 3.16 0.13
2015:Q2 0.91 3.56 0.13
2015:Q3 1.29 3.88 0.13
2015:Q4 1.65 4.13 0.13
2016:Q1 2.00 4.33 0.33
2016:Q2 2.29 4.44 0.83
2016:Q3 2.53 4.50 1.31
2016:Q4 2.75 4.53 1.75
2017:Q1 2.94 4.54 2.14
2017:Q2 3.11 4.54 2.47
2017:Q3 3.26 4.55 2.76
2017:Q4 3.40 4.57 3.00
2018:Q1 3.53 4.61 3.20
2018:Q2 3.65 4.66 3.37
2018:Q3 3.76 4.72 3.50
2018:Q4 3.85 4.78 3.60


 

Unemployment Rate

Percent

Period Baseline using Taylor 1999 Stronger recovery Weaker recovery
2011:Q1 8.99 8.99 8.99
2011:Q2 9.07 9.07 9.07
2011:Q3 9.06 9.06 9.06
2011:Q4 8.70 8.70 8.70
2012:Q1 8.65 8.65 8.65
2012:Q2 8.55 8.54 8.56
2012:Q3 8.45 8.41 8.47
2012:Q4 8.35 8.26 8.41
2013:Q1 8.21 8.04 8.30
2013:Q2 8.06 7.80 8.21
2013:Q3 7.91 7.54 8.13
2013:Q4 7.76 7.27 8.06
2014:Q1 7.62 6.97 7.99
2014:Q2 7.47 6.68 7.92
2014:Q3 7.32 6.41 7.85
2014:Q4 7.18 6.18 7.76
2015:Q1 7.03 5.99 7.67
2015:Q2 6.88 5.85 7.55
2015:Q3 6.74 5.75 7.41
2015:Q4 6.59 5.67 7.23
2016:Q1 6.45 5.61 7.03
2016:Q2 6.33 5.58 6.82
2016:Q3 6.23 5.57 6.62
2016:Q4 6.14 5.56 6.43
2017:Q1 6.06 5.56 6.27
2017:Q2 5.99 5.56 6.12
2017:Q3 5.92 5.55 6.01
2017:Q4 5.86 5.54 5.91
2018:Q1 5.81 5.52 5.83
2018:Q2 5.76 5.49 5.77
2018:Q3 5.71 5.46 5.73
2018:Q4 5.68 5.43 5.70


 

PCE Inflation

4-quarter percent change

Period Baseline using Taylor 1999 Stronger recovery Weaker recovery
2011:Q1 1.78 1.78 1.78
2011:Q2 2.53 2.53 2.53
2011:Q3 2.87 2.87 2.87
2011:Q4 2.67 2.67 2.67
2012:Q1 1.90 1.90 1.90
2012:Q2 1.80 1.80 1.80
2012:Q3 1.71 1.71 1.71
2012:Q4 1.61 1.62 1.61
2013:Q1 1.65 1.65 1.64
2013:Q2 1.67 1.69 1.66
2013:Q3 1.70 1.74 1.68
2013:Q4 1.73 1.79 1.69
2014:Q1 1.75 1.85 1.69
2014:Q2 1.78 1.90 1.70
2014:Q3 1.81 1.95 1.69
2014:Q4 1.83 1.99 1.69
2015:Q1 1.88 2.05 1.70
2015:Q2 1.91 2.10 1.71
2015:Q3 1.93 2.15 1.72
2015:Q4 1.96 2.20 1.74
2016:Q1 1.97 2.23 1.75
2016:Q2 1.98 2.26 1.76
2016:Q3 1.99 2.28 1.77
2016:Q4 2.00 2.30 1.78
2017:Q1 2.00 2.30 1.78
2017:Q2 2.00 2.30 1.79
2017:Q3 2.00 2.30 1.80
2017:Q4 2.00 2.29 1.81
2018:Q1 2.01 2.29 1.83
2018:Q2 2.01 2.28 1.84
2018:Q3 2.01 2.27 1.86
2018:Q4 2.02 2.27 1.88


 

Last update: August 2, 2013