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Economic research resources.

About This Column

Resource Center is about all types of helpful information resources for real estate analysts and valuers--books, articles, presentations, data sources, videos, and websites. (1) This edition of Resource Center discusses economic information and research available on the internet, especially from the Federal Reserve Banks, the US Census Bureau, and the US Bureau of Labor Statistics (BLS), with detailed focus on the BLS's resources related to inflation and the Consumer Price Index.

Federal Reserve Banks as Sources of Economic Information

The Federal Reserve is the central bank of the United States. The Federal Reserve System is often simply referred to as "The Fed." The Fed includes twelve regional Federal Reserve Banks, (2) one in each Federal Reserve district. The twelve branches, identified by number and location, are as follows:

Federal Reserve Districts and Main Bank Locations

District 1. Boston, MA

District 2. New York, NY

District 3. Philadelphia, PA

District 4. Cleveland, OH

District 5. Richmond, VA

District 6. Atlanta, GA

District 7. Chicago, IL

District 8. St. Louis, MO

District 9. Minneapolis, MN

District 10. Kansas City, MO

District 11. Dallas, TX

District 12. San Francisco, CA

The district locations are shown in the map in Exhibit 1.

Of interest to real estate analysts and valuers is the information each of the district banks has available on its website. All the district bank websites have extensive educational information, but there are some differences in research, publications, and information provided. While all the websites include national economic information, what makes each bank's website unique is its individualized state and regional economic information and data. On each district's site, you will find good, authoritative economic information, including data and research for the bank's region, state, and key metro areas. Many of the banks have email newsletter subscriptions at no charge; some also have tweets, RSS, and social media presence. The summary below highlights each district bank's website, with emphasis on content of particular interest to real estate analysts.

First District, Federal Reserve Bank of Boston

The Boston Fed's website, www.bostonfed.org, has good sections covering current events as well as trends and outlook reports. The homepage selections include Monetary Policy and Economic Research; Supervision and Credit; Payment Studies and Strategies; Community Development; and In the Region news. Each section has material in several categories encompassing Strategic Focus, Publications and Data, News and Events, and People.

In the News and Events and Publications sections, some 2017 topics of particular interest to real estate analysts include the following:

* Boston Fed President Discusses "Trends in Commercial Real Estate," http://bit.ly/BostonSpeech

* "Why Has the Rate of Young Adults Going Out on Their Own Been Trending Down ward?" http://bit.ly/HouseholdFormation

* "Monetary Policy and Regional House-Price Appreciation," http://bit.ly/RegionalHousePrice

Recent topics available in the Publications and Data section, http://bit.ly/BostonPublications, include the following:

* "Who Counts as Employed?"

* "The Time-Varying Price of Financial Intermediation in the Mortgage Market"

* "Regional Economic Conditions" and "Snapshot of the New England Economy"

* "Land Installment Contracts: The Newest Wave of Predatory Home Lending"

* "Do Community Benefits Agreements Benefit Communities?"

The search filter allows you to look back more than a decade in your queries.

Second District, Federal Reserve Bank of New York

The New York Fed website, www.newyorkfed.org, is divided into several major sections similar to the websites of other district banks. The section labeled About the New York Fed has information about what the bank does and the annual report; the Markets and Policy Implementation section has articles and data about current bank activities, news, and educational information.

The Economic Research section has information about a host of topics related to the current US economy, such as "Safety, Liquidity, and the Natural Rate of Interest." The Economic Research section also features the "Nowcasting Report," which tracks the evolution of the New York Fed Staff's "Nowcast" (i.e., forecast) of GDP growth and the impact of new data releases on this forecast.

On the social media side, the Fed's Liberty Street Economics blog, http://libertystreet economics.newyorkfed.org, includes commentary on "Measuring Trend Inflation with the Underlying Inflation Gauge," and on the New York Fed's 2017 SCE Housing Survey. This section also has tweets by @NYFedResearch with current information.

The sections Financial Institution Supervision, and Financial Services and Infrastructure have good current articles on regulation, supervision, and financial services to member banks, which does not have a great deal of interest for the real estate researcher. The Outreach and Education section provides some educational and classroom resources and outreach articles, but these are not of specific interest to the real estate researcher.

Third District, Federal Reserve Bank of Philadelphia

The Philadelphia Fed website, www.philadelphia fed.org, has several overview sections, including About the Fed and Newsroom, as well as a very good Education section; a section on Consumer Credit and Payments with a host of publications, statistics, publications, and tools for researchers; Bank Resources (primarily for member banks); and the Community Development section with information about individual subregions and communities.

Of particular interest to real estate researchers is the Research and Data section, www.philadelphiafed.org/research-and-data. This section has considerable regional economic data and analysis, including a real-time Data Research Center, Research Contacts, Research Events, Library, and Publications. The economic information ranges from national to regional to state-by-state situation, with sections on state Leading and Coincident Indexes, Manufacturing and NonManufacturing Business Outlook Survey results, and Regional Research.

Within the Research and Data section, the Real-Time Data Research Center contains several indices reporting on business conditions, inflation expectations, GDPplus (gross domestic product plus), Greenbook Data Sets, the Livingston Survey (based on economists' expectations), Partisan Conflict Index, the Philadelphia Research Intertemporal Stochastic Model (PRISM), Real-Time Data Set for Macroeconomists, and Survey of Professional Forecasters at http://bit.ly/forecasters.

Further, under Research and Data is an extensive Regional Economy subsection with leading economic indexes, business surveys, data analysis and statistics, manufacturing and nonmanufacturing business outlook survey, and regional research. Here, you'll also find the Latest Research subsection, with updated tristate tracking covering Delaware, New Jersey, and Pennsylvania. The Research Publications page provides an extensive list of articles and papers with archives going back to 1996.

Recommendation: Take a look at what the Philadelphia Fed's website has to offer, especially if you are working in this tristate region.

Fourth District, Federal Reserve Bank of Cleveland

As with other Fed banks, the Cleveland Fed website, www.clevelandfed.org, is divided into sections; in this case these are Our Research, Community Development, Banking, Newsroom and Events, About Us, and Learning Center and Money Museum. The homepage has a convenient search section up front, with basic indicators on Median CPI, Inflation Nowcasting, Policy Rules, Systemic Risk, and Predicted GDP Growth.

The Our Research section has subsections on Monetary Policy, Financial Markets and Banking, Housing, Households and Consumers, Inflation Central, Our Region, Indicators and Data, and Publications.

The parts on National Economy, Monetary, and Financial Markets and Banking may hold less interest for valuers and market analysts. Further, the Housing and the Household and Consumers portions have information of particular interest to consumers and mortgage borrowers rather than market analysts. The Community Development Special Reports section includes a 2017 report on "Neighborhood Change in the Fourth Federal Reserve District."

Fifth District, Federal Reserve Bank of Richmond

The Richmond Fed's website, www.richmondfed .org, has a Research section focusing on "key areas of economic study":

* Consumer Finance

* Economic Growth and Business Cycles

* Financial Markets and Institutions

* Financial Regulation

* Inflation and Monetary Policy

* Labor Markets

* Monetary History

* Payments and Policy

* Regional Economics

Most of the Richmond Fed's research reports and publications involve general economic and banking topics, but there is information on inflation and regional economics that may be of interest to some Appraisal Journal readers. In the Research section, one article of interest is the 2016 Federal Reserve Bank of Richmond Annual Report, Understanding Urban Decline, available for reading and download at http://bit.ly/urbandecline. This report includes an excellent appendix of information and list of references.

Sixth District, Federal Reserve Bank of Atlanta

The Atlanta Fed's impressive website is https://frbatlanta.org/?panel=l. Most of the website components are similar to those of other Fed banks, with sections on Research and Data, Economy Matters, Banking and Payments, News and Events, Education, Community Development, and About the Fed. The Research and Data section has a plethora of information; more importantly, this is one of the few banking sites with a section devoted to real estate.

You will find the Atlanta Fed's real estate research at http://realestateresearch.frbatlanta.org. As stated on the website, the Real Estate Research section "provides analysis of topical research and current issues in the fields of housing and real estate economics." Recent articles have looked at such topics as the share of real estate sales to investors; trends in office renovations; commercial construction data and updates; construction lending and spending updates; the housing market; millennials and the city center; and the multifamily market.

Research archives go back several years, covering topics such as credit conditions, foreclosure contagion, foreclosure laws, house price indexes, household formations, housing demand and prices, mortgage supply, and multifamily housing. Users can subscribe by email at no cost to keep up-to-date with the site and its activities.

The Economy Matters section of the site may also be of interest to many real estate researchers. It includes subsections on Economic Research, Banking and Finance, Regional Economics, and Community/Economic Development.

Recommendation: For regional or national data and information, explore this site. This is one of the top Federal Reserve Bank websites for research, particularly if you are working in this region.

Seventh District, Federal Reserve Bank of Chicago

The Chicago Fed's website, www.chicagofed.org, has specific sections on Research, Markets, Region, and Publications that may be of interest to real estate researchers and analysts.

The Region portion of the site has eight Economic Indicators presented in very well done interactive graphs available at www.chicagofed .org/research/data/index. This page is worth exploring--take a look at the subsections on Current Data, Latest Release, Historical Data, and more. The Region segment information concerns the economies of Illinois, Indiana, Iowa, Michigan, and Wisconsin, and the Midwest Region, including the Midwest Economy Index.

The Publications segment of the site has over 450 publications available for download. Recent research looks at the medical industry (and thus influences on medical property demand), inflation, interest rates, and much more. Unfortunately real estate markets, commercial, special purpose, industrial, residential, or other have not been of primary interest to researchers and publishers.

Recommendation: Investigate this website, particularly if your interests are in this district and the Midwest.

Eighth District, Federal Reserve Bank of St. Louis

The St. Louis Fed's website, www.stlouisfed.org, has departments on Research and Data, News from the [St. Louis Fed] President, Blogs, Publications, Economic Education, Community Development, and Bank Supervision.

Of particular interest to Appraisal Journal readers is the Research and Data section, https://research .stlouisfed.org, which includes links to the website's sections on FREDEconomic Data, Information Services, Publications, and Working Papers.

FRED is the acronym for Federal Reserve Economic Database. Maintained and operated by the Federal Reserve Bank of St. Louis, it has almost 500,000 data series from various sources (e.g., the Federal Housing Finance Agency, US Bureau of Labor Statistics, Census Bureau, and Bureau of Economic Analysis).

The FRED Economic Data section, https:// fred.stlouisfed.org, is a treasure trove of economic information with links to research and data within the database. (3) The material covers all levels of possible interest, with national, regional, state, county, and even metro data. Visit FRED to see some of the wide variety of authoritative material available--facts and figures range from the Consumer Price Index (CPI) and inflation to real gross domestic product (GDP) to Treasury rates to the industrial production index and unemployment rates, payroll employment, and jobless claims. There are also links to the latest FRED news, FRED Blog, and Research News on this site.

FRED is constantly adding material and improving, so take a look at FRED Announcements, http://bit.ly/FREDannouncements, to keep up to date. To help you stay current, you also can subscribe to a free email economic research newsletter at https://research .stlouisfed.org/newsletter-subscribe.html.

To get the most out of FRED, be sure to check out the Help and the Tips and Tutorials pages. To start, take a look at the Help page, http://bit.ly/FREDhelp. There you will learn how to find and download data and use FRED data lists; be sure to take advantage of the section on "Understanding the Data." A link for Graphs shows how to customize and share FRED graphs. Under Help there are also subsections on using ALFRED, https://alfred.stlouisfed.org, which is the FRED data archive; GeoFRED, https://geofred.stlouisfed.org, which uses maps to display economic data by county, state, and nation; and FRED API, https://research .stlouisfed.org/docs/api/fred, which allows enhanced research queries through an application programming interface. The Tips and Tutorial page, https://research.stlouisfed.org/tips, gives specific "how-to" advice, such as how to copy and save FRED graphs.

A helpful tool on the website is the FRED Add-In, https://research.stlouisfed.org/fred-addin. This free downloadable Microsoft Excel add-in "will significantly reduce the amount of time spent collecting and organizing macroeconomic data. The FRED add-in provides free access to over 490,000 data series ... directly through Microsoft Excel."

Use the mid-page tabs at https://fred.stlouisfed .org for quick access to items in Popular Series, Latest Releases, and Tools.

The Popular Series tab will give you interactive graphs on Consumer Price Index for All Urban Consumers, Effective Federal Funds Rate, Real Gross Domestic Product, BofA Merrill Lynch US High-Yield Option-Adjusted Spread, 10-Year Treasury Rate information, and much more. Use the Latest Releases tab to see information on selected interest rates, spot prices, house price index, new residential construction, existing home sales, and more. Under the Tools tab you will find provision for your own Data Lists, FRED mobile, as well as the previously mentioned FRED add-on for Excel, FREDcast, GeoFRED, ALFRED, and Developer API. For quick assistance, open the Need Help tab on this page.

The Information Services subsection, http://bit.ly/FREDinformationservices, provides access to GeoFRED, https://geofred.stlouisfed.org, which includes color-coded interactive maps (i.e., data mapping), frequently down to the state and county level and with roll-over capabilities for more information. Explore the demographic data such as personal income, unemployment, labor force, or education level at the county or metropolitan statistical areas level. Again, explore; drill down; try this click and that. While at Information Services you will also find the Federal Reserve Archival System for Economic Research, called FRASER (https://fraser.stlouisfed.org), which provides access to US economic history. Other items available through the Information Services page are the Digital Library, and RePEc IDEAS, https://ideas.repec.org, which is the largest free bibliographic database for research papers in economics.

The Publications section of the FRED Research Division, https://research.stlouisfed .org/publications, has publication search capability and lists a number of recent publications. Another list of publications can be found by clicking the Publications tab of the main website, www.stlouisfed.org/publications.

One publication of interest is Housing Market Conditions, a quarterly overview of housing market conditions in each of the seven states in the Fed's Eighth District as well as the metropolitan statistical areas of Little Rock, Louisville, Memphis, and St. Louis, http://bit.ly/eighthdistricthousing. This page also has a link to Housing Market Perspectives, a separate publication with a similar name, available at http://bit.ly/housingmarketperspectives. Some recent Housing Market Perspectives articles (all downloadable PDFs)include the following:

* "Could Housing Markets Face Another 'Taper Tantrum' Moment?" (Issue 4, 2017)

* "The End Is in Sight for the U.S. Foreclosure Crisis" (Issue 3, 2016)

* "Recent Rise in Housing Costs Belies Long-Term Affordability" (Issue 2, 2016)

* "If Housing Markets Are Recovering, Why Is the Homeownership Rate Still Falling?" (Issue 1, 2016)

Recommendation: The Federal Reserve Bank of St. Louis is a leading, respected resource for economic and financial information. Take some time to explore it and find out about its contents. The summary above gives an idea of the breadth and depth of the information available, but these items are just a sampling of what can be found there.

Ninth District, Federal Reserve Bank of Minneapolis

The Minneapolis Fed's website, www .minneapolisfed.org, has sections similar to those of the other district banks. Sections of primary interest to real estate analysts are Economic Research, Regional Economy, and Publications. The homepage provides current events information and information about this Federal Reserve Bank.

In the Economic Research section, most of the subsections (specifically Latest Research, Staff Reports, Working Papers, and Quarterly Review) cover general economic topics, national and even international, with a paucity of information on real estate matters specifically. The Regional Economy section is similar, but with fewer academic-type articles and more current papers and general research. Again, there is little coverage of any type of specific real estate matters.

Within the Publications section, www .minneapolisfed.org/publications, there are some articles that may be of interest to Appraisal Journal readers, real estate researchers, analysts, and valuers, including the paper "Real Interest Rates over the Long Run," available at http://bit.ly/longrunrates, and the article "Working through Demographic Change," available at http://bit.ly/fedgazettechange. The Minneapolis Fed publishes a number of nonacademic periodicals, which are available in the Publications section. These include the fedgazette, The Region, and Community Dividend; they occasionally touch on real estate issues. The Research Digest Index of articles is also under Publications at http://bit.ly/researchdigest. Again, most research and articles generally have to do with economics and banking rather than topics of specific interest to real estate research, analysts, and valuers directly.

Tenth District, Federal Reserve Bank of Kansas City

The Kansas City Fed's website, www.kansascity fed.org, includes sections on Banking, Research and Data, Community Development, Newsroom, Publications, and Education. The homepage has headlines, current events, and economic development graphs, such as a recent Manufacturing Survey graph and Economic Conditions/GDP graph.

The Research and Data section, www .kansascityfed.org/research, includes segments on Recent Research and Economic Review. Some of the recent topics of possible interest to real estate valuers and analysts include the following:

* "Crowdedness, Centralized Employment, and Multifamily Home Construction"

* "Residential Rent Affordability across U.S. Metropolitan Areas"

* "The Large Unmet Demand for Housing"

* "The Weak Outlook for Residential Investment"

* "The Dispersion of Farmland Values in the Tenth District"

Eleventh District, Federal Reserve Bank of Dallas

The Dallas Fed's website, www.dallasfed.org, has links to its branches in El Paso, Houston, and San Antonio and to articles on the branch banks' economic indicators and recent additions to the website. The website's major topic sections include Research, Banking, Community Development, Education and Outreach, Publications, and News and Events.

The Research webpage, www.dallasfed.org /research, is where real estate analysts will find the most relevant information. Here, you'll find links to publications such as the Economic Updates series, the quarterly Southwest Economy (covering Texas, New Mexico, and Louisiana), Special Reports, and Working Papers. The Research section also features links to subsections on the Texas Economy, US Economy, the International Economy, and Energy Research. The Dallas Fed Economic Letter is available by free email subscription at www.dallasfed.org/research/eclett. Some past issues are available on the website.

The Energy Research subsection, www .dallasfed.org/en/research/energy.aspx, is a unique feature among all the Fed websites. Here you'll find articles, research, data, and analysis on energy topics. There is also information specific to the energy resources located within the Eleventh Fed District: Barnett Shale, Eagle Ford Shale, Haynesville Shale, and the Permian Basin.

The Texas Economy subsection, www .dallasfed.org/research/texas, offers information from various outlook surveys, including the Texas Manufacturing Outlook Survey, Texas Service Sector Outlook Survey, Texas Retail Outlook Survey, and the Eleventh District Surveys on Energy and Agriculture. Each survey has a current report (narrative with analysis) and historical data (free, downloadable to Excel). Within the Texas research subsection you'll find economic indicators according to cities and regions in Texas and New Mexico, regional data, Texas employment and unemployment data, metro retail sales data, metro area wages data, value of the dollar by state, and employment by Fed districts. Economic information for the additional states in the district is available within the Regional Economic Data subsection, www.dallasfed.org/research/econdata.

The Publications section, www.dallasfed.org /en/pubs.aspx, is extensive--both broad and in-depth, both regional and national. A sampling of publication, video, and webcast titles of potential interest to real estate analysts and valuers includes the following:

* At the Heart of Texas: Cities' Industry Clusters Drive Growth

* The Border Economy

* Business Frontier

* DataBasics (4)

* Everyday Economics Series

* Mexico Economic Update

* Neighborhood Stabilization Program

* Science and Cents

* Staff Papers

* Working Papers--Economic Research

The Federal Reserve Bank of Dallas has an outstanding website for research; take a look, particularly if you are working in District Eleven.

Twelfth District, Federal Reserve Bank of San Francisco

The San Francisco Fed's website, www.frbsf.org, includes sections on Research, Banking, Education, Community Development, Cash, Our Districts, and The Fed System. The homepage has direct links to SF Fed Blog at http://bit.ly /twelfthblog, current topics, and the San Francisco Fed's Economic Letter. Recent topics in the Economic Letter of possible interest to real estate analysts include the following:

* "Constructing the Home Purchase Sentiment Index" (May 2017)

* "Measuring Interest Rate Risk in the Very Long Term" (April 2017)

* "What's on the News? A New Economic Indicator" [tracking sentiment from news articles] (April 2017)

* "Why Are Long-Term Interest Rates So Low?" (December 2016)

* "TIPS Liquidity and the Outlook for Inflation" (November 2016)

* "Projecting the Long-Run Natural Rate of Interest" (Aug. 2016)

The Research section of the website also has a number of interesting research papers:

* "PCE Inflation Dispersion," which discusses the personal consumption expenditure index (PCEPI), a measure of inflation that includes the broadest set of goods and services, available at http://bit.ly/inflationpcepi

* "A New Normal for Interest Rates? Evidence from Inflation-Indexed Debt," available at http://bit.ly/inflationindexed

* "Mortgage Choice: Interactive Effects of House Price Appreciation and Mortgage Pricing Components," available at http ://bit.ly/mortgagechoice

The Education section has outstanding information on the economy and includes the Fed's offering of teacher resources and information.

Additional Sources of Economic Information

Although the Federal Reserve Banks are good sources of national, regional, state, and local economic information, other resources are available. Be sure to check out the below resources for information beyond the headline news.

The US Census Bureau--More than Just Demographics

The US Census Bureau website often is referred to by its URL, "Census.gov." This massive website, www.census.gov, offers loads of economic information, including some helpful information that many real estate analysts and valuers may not be familiar with. Major sections and subsections of the website that are likely to be of interest to Appraisal Journal readers include the following:

* Topics--This section offers data on population/demographics, housing, the economy, employment, income, business, families and living arrangements, and more.

* Geography--This section addresses the geographic distribution of characteristics of the population down to the metropolitan level. The data is displayed in maps (including interactive maps, GSS interactive). Explanations of terms and data are provided.

* Library--This section is the repository for publications, working papers, and infographics.

* Data--This section offers links to tools and apps, related data sites, and combined data. The website's most popular sections include the American Fact Finder, http://bit.ly/censusfactfinder, and Quick Facts, http://bit.ly/censusquickfacts; links to both of these can be found under the homepage's Data tab.

The Census Bureau's website has much more information than generally realized. It is easy to use and you can drill down to the local level.

Users will benefit from exploring what's available behind the different tabs. Some information on Census.gov is linked to information on the Bureau of Labor Statistics (BLS) website, which is discussed later in this column.

State and Local Economic Information and Forecasts

Current, local economic status, and local and state economic forecasts and projections5 are important to real estate analysts and valuers--remember "value is the present worth of anticipated benefits"--so be sure to check your state and local sources for conditions and outlook. Many of these sources have some good economic projections, forecasts, and outlooks for economic components of importance to the real estate market. Such future looks may be helpful to you as a researcher, analyst, and valuer as you make judgments and forecasts of necessity in value opinion decisions, market outlook decisions, and client recommendations. The names of sources vary widely, but most states and metro areas have economic development websites. Also, many universities and commercial banks have economic research information, often with valuable specific information for regions, states, and metro areas. Look for breakdowns not just geographically, but by type, age, price range, and so on.

Private Sector Economic Research Data

In the private sector, many organizations and entities conduct their own research and produce reports with economic data, indexes, and forecasts specific to their interests. Because their focus is narrow and distinct, the information produced by private organizations and entities can be quite helpful to real estate analysts and valuers. Keep the following websites in mind when an assignment requires specialized data.

* Conference Board, Business Cycle Indicators

www.conference-board.org/data/bci.cfm

* Economic Cycle Research Institute (ECRI), All Indexes

www.businesscycle.com/ecri-reports-indexes /all-indexes

* Institute for Supply Management (ISM), Report on Business

www.instituteforsupplymanagement.org/ISMReport

* JLL Research, Office Demand Forecast

www.us.jll.com/united-states/en-us/research/office

* NAIOP Research Foundation, Office Space Demand Forecast (6)

www.naiop.org/en/Research/Our-Research/Reports /Office-Space-Demand-Forecast.aspx

* NAIOP Research Foundation, Industrial Space Demand Forecast

www.naiop.org/en/Research/Our-Research/Reports /Industrial-Space-Demand-Forecast.aspx

* National Association of Home Builders (NAHB), Housing Indexes

www.nahb.org/en/research/housing-economics /housing-indexes.aspx

* National Association of Realtors, Research and Statistics

www.nar.realtor/research-and-statistics

* National Council of Real Estate Investment Fiduciaries (NCREIF), Data Products

www.ncreif.org/data-products

* National Federation of Independent Business (NFIB), Small Business Economic Trends

www.nfib.com/surveys/small-business-economic -trends

* University of Michigan, Surveys of Consumers

www.sca.isr.umich.edu

Information Resources for Inflation Metrics and the Consumer Price Index

Real estate market analysts, advisors, and valuers often need inflation or Consumer Price Index (CPI) information. For example, lease escalations may be tied to inflation, mean or median price changes may need to be adjusted for inflation, and the rate of market price or rent change may be compared to inflation or a change in the purchasing power of the dollar. For these and other reasons real estate analysts may need inflation and CPI information. (7) The following discusses sources of data related to inflation and the CPI. Consult the Additional Reading Appendix at the end of this article for a list of suggested reading material on these topics.

Bureau of Labor Statistics

The Bureau of Labor Statistics (BLS) maintains data for measuring and calculating inflation through Consumer Price Index data. The BLS website, www.bls.gov, explains the various different levels of reports it produces:
   BLS publishes indexes monthly for the U.S., 4 regions
   (Northeast, Midwest (formerly North Central), South,
   and West), 3 population size-classes (A, B/C, and D) and
   10 region-by-size groups (Northeast-Size Class A,
   South-Size Class D, etc.). The A population size class
   represents all metropolitan areas over 1.5 million; B/C
   represents mid-sized and small metropolitan areas
   (fewer than 1.5 million); and D, all nonmetropolitan
   urban areas. Due to insufficient sample sizes, region-by-size
   indexes are not published for Northeast and West
   Size Class D. ... In addition, BLS publishes CPI information
   for 26 metropolitan areas. Some of these metropolitan
   areas, as defined by the Bureau of the Census,
   include suburbs or counties that extend across State
   boundaries. (8)


Reports for the largest metropolitan areas (New York, Los Angeles, Chicago) are published monthly. Reports for the next tier of metropolitan areas in terms of size (e.g., Atlanta, Boston, Dallas, Seattle) are published bimonthly, while reports for the third tier of metro areas (e.g., Denver, Pittsburgh, San Diego, Tampa) are published semiannually.

For each CPI data series, two separate indexes are available: the All Urban Consumers CPI (CPI-U) and the Urban Wage Earners and Clerical Workers CPI (CPI-W). Both the CPI-U and the CPI-W reflect only the buying habits of urban consumers. The CPI-U is the most comprehensive of the two and represents the expenditures by all urban consumers, about 89% of the total US population. (9)

The CPI is based on the so-called "market basket" or collection of goods and services considered and surveyed. The goods and services are priced, item by item, periodically to track change over time. The items are collected for over 180 categories divided into eight groups as shown below (examples of specific items in parenthesis): (10)

* Food and beverages (ham, eggs, carbonated drinks, coffee, meals and snacks)

* Housing (rent of primary residence, fuel oil, bedroom furniture)

* Apparel (men's shirts and sweaters, women's dresses, jewelry)

* Transportation (new vehicles, gasoline, tires, airline fares)

* Medical care (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)

* Recreation (television sets, cable TV, pets and pet products, sports equipment, admissions)

* Education and communication (college tuition, postage, telephone services, computer software and accessories)

* Other goods and services (tobacco and smoking products, haircuts and other personal care services, funeral expenses)

Exhibit 2 shows a FRED graph of CPI data.

CPI Databases

The BLS website includes a number of individual CPI databases, which are accessible at www .bls.gov/cpi/data.htm. Visit the website to take a look at the types of information available. The primary databases cover the following areas:

* All Urban Consumers (Current Series) [CPI-U]

* Urban Wage Earners and Clerical Workers (Current Series) [CPI-W]

* All Urban Consumers (Chained CPI) (11)

* Average Price Data

The BLS CPI database page includes tools and considerable additional information. You can choose how to view the data, as shown in Exhibit 3. To supplement this, the BLS site's Publications and Reports section, www.bls.gov/cpi/publications.htm, has information on the CPI methodology, research papers, seasonal adjustments, and other topics including the following:

* "Misconceptions about the Consumer Price Index"

* "Comparing US and European inflation: the CPI and HICP"

* "Understanding the Consumer Price Index: Answers to Some Questions"

* "How to Use the Consumer Price Index for Escalation"

* "Math Calculations to Better Utilize CPI Data"

* "Rent and Rental Equivalence"

BLS Inflation Calculator (12) and Additional Tools

The BLS website offers a CPI inflation calculator, https://data.bls.gov/cgi-bin/cpicalc.pl, designed to easily calculate inflation using the CPI-U. The below shows an example of this simple data entry calculator; it adjusts buying power with the entry of a dollar amount and two dates.

This CPI inflation calculator uses the CPI-A11 Urban Consumers (CPI-U) US City Average series for all items, which is the most commonly used measure of inflation; it is not seasonally adjusted. This data represents changes in the prices of all goods and services purchased for consumption by urban households. The data (downloadable) and a graph is available at http://bit.ly/CPIallurban.

To query specific data, including at the state and county level, use the Advanced Search option on the BLS data finder at http://bit.ly /BLSadvanced. To investigate Producer Price Indexes, explore the options at www.bls.gov/ppi. For employment projections go to www.bls.gov /emp, and for local area unemployment statistics check out www.bls.gov/lau/home.htm.

Interest Rates and Inflation

Real estate analysts and valuers are also sometimes concerned with the real interest rate, and the natural or neutral interest rate. (13) A related term, real rate of return, is computed by finding the sum of one plus the nominal rate divided by the sum of one plus the inflation rate, which then is subtracted by one. This can be used to determine the effective return on an investment after adjusting for inflation. (14) Here are some good resources regarding the natural or neutral interest rate and real interest rate:

* "The Hutchins Center Explains: The Natural Rate of Interest," http://brook.gs/2rz4qD8

* "The Natural Rate of Interest," http://bit.ly/naturalrate

* "Calculating the Natural Rate of Interest: A Comparison of Two Alternative Approaches," http://bit.ly/calculatingrate

* "Think You Know the Natural Rate of Interest? Think Again," http://on.wsj.com/2r3MrRz

* "Measuring the Natural Rate of Interest," http://bit.ly/measuringrates

* "Liftoff and the Natural Rate of Interest," http://bit.ly/liftoffnaturalrate

Conclusion

The internet has made access to economic and financial information much easier. You will find information and data that drills down to local levels, which may be more useful in an assignment than broad national data. Explore the websites mentioned in this column to become familiar with these amazing critical resources.

Dan L. Swango, PhD, MAI, SRA, is president of Swango Real Estate Counseling and Valuation International in Tucson, Arizona. He is experienced in valuation and consulting involving equity investment, debt security, risk reduction, profit optimization, estate planning and settlement, buy/sell opportunities, and eminent domain. Swango is an instructor and communicator with domestic and international experience. He is namesake of The Appraisal Journal's Swango Award, past Editorial Board chair and editor-in-chief of The Appraisal Journal, and a current member of the Journal's Review Panel. Contact: danswango@yahoo.com

If you know of additional resources of interest to real estate analysts and valuers--or would like to suggest topics for this column--please contact the author.

Appendix Additional Reading on Inflation and CPI

Because measures of inflation and CPI play a critical part in the economy, the internet material addressing them is virtually limitless. Below is some suggested additional reading, grouped by type of coverage.

Background and Foundational Information on Inflation and CPI

* Federal Reserve Bank of Atlanta Inflation Project. The Federal Reserve Bank of Atlanta Inflation Project, www.frbatlanta.org/research/inflationproject.aspx, has a wealth of inflation-related information. A very special site, it has quite a few interesting parts, including sections on Sticky-Price CPI, myCPI (customizable), Business Inflation Expectations, Inflation Dashboard (key inflation measures and other inflation-related data), and Deflation Probabilities.

* BLS CPI Brief. The Bureau of Labor Statistics offers a CPI snapshot page at http://bit.ly/blscpi.

* InflationData.com. InflationData.com offers historical information on the Consumer Price Index (CPI-U) and Understanding the CPI. This website has numerical inflation data, charts, inflation calculators, adjusted prices and cost of living information and includes some international information. Check out this resource at http://bit.ly/inflationdata.

* Trading Economics. Trading Economics offers a good discussion of the US Consumer Price Index (CPI) at www.tradingeconomics.com/united-states/consumer-price-index-cpi.

* Blackrock Blog. Blackrock Blog offers an interesting perspective on how the public views inflation in its article "Three Reasons Inflation Isn't What You Think"; check it out at www.blackrockblog.com /2015/06/16/reasons-inflation.

* Investopedia. Investopedia provides a good discussion of the basics of inflation in "Understand the Different Types of Inflation"; check it out at http://bit.ly/inflationtypes. Also be sure to read Investopedia's "All About Inflation" series at http://bit.ly/allinflation.

Inflation Forecasting Information

* "Simple Ways to Forecast Inflation: What Works Best?" [Federal Reserve Bank of Cleveland] http://bit.ly/forecastinflation

* "Inflation Expectations" [Federal Reserve Bank of Cleveland] http://bit.ly/expectinflation

* "Inflation Central" [Federal Reserve Bank of Cleveland] http://bit.ly/centralinflation

* "Real-Time Inflation Forecasting in a Changing World" [Federal Reserve Bank of New York] http://bit.ly/realtimeforecast

* "How Accurate Are Measures of Inflation Expectations?" [Federal Reserve Bank of St. Louis] http://bit.ly/accurateinflation

* "How Accurate Are Measures of Long-Term Inflation Expectations?" [Federal Reserve Bank of St. Louis] http://bit.ly/longterminflation

* "Can We Rely on Market-Based Inflation Forecasts?" [Federal Reserve Bank of San Francisco] http://bit.ly/marketbasedinflation

* "Forecasting Inflation" [Harvard University] http://bit.ly/forecastinginflationHarvard

* "Forecasting Inflation" [Johns Hopkins University] http://bit.ly/forecastinginflationHopkins

Serious Challenges in Considering and Measuring Inflation

* "If You Want to Know the Real Rate of Inflation, Don't Bother with the CPI" (an exceptionally insightful article and good thought stimulator) http://bit.ly/forbesrealrate

* "Inflation Measurement" www.federal reserve, gov/pubs/feds/2006/200643

* "Consumer Price Index Data Quality: How Accurate Is the U.S. CPI?" www.bls.gov/opub/btn/volume-1

* "Two Consumer Price Index Issues: Weighting and Homeownership" www.bls.gov/opub/mlr/1981/03/rpt1full.pdf

* "Asset Prices in the Measurement of Inflation" (addresses housing prices) http://bit.ly/housepriceBrandeis

* "The Measurement of Rent Inflation" http://bit.ly/rentinflationNYFED

* "Inflation Rates Are Very Different When Housing Rents Are Accurately Measured" http://bit.ly/rentmeasure

* "What Are Some Limitations of the Consumer Price Index (CPI)?" http://bit.ly/cpilimitations

* "Limitations of Using the Consumer Price Index (CPI) to Measure Inflation" http://bit.ly/limitationsblog

* "Problems in Measuring Inflation" www.economicshelp.org/macroeconomics/inflation/problems-measuring

(1.) For easy, direct access to the URL addresses noted throughout this article, read this column online. Go to http://bit.ly/TAJarticles and click on "View Current Issue." (Login required).

(2.) The concept of a central bank to help stabilize the US economy has an interesting and bumpy background. Secretary of the Treasury Alexander Hamilton proposed a central US Bank, which was created in 1791 and headquartered in Philadelphia; its charter expired after twenty years. After a significant period of inflation, James Madison authorized the Second Bank of the United States in 1816; it expired in 1833. After the financial Panic of 1907, the Federal Reserve System was created by the Federal Reserve Act of 1913. The twelve Federal Reserve banks opened in November 1914. All national banks are required to join the system; other banks may join it. For more background resources and information see www.stlouisfed.org/about-us/what-we-do.

(3.) A good overview of FRED is available at http://bit.ly/FREDwiki

(4.) DataBasics, at www.dallasfed.org/research/basics, "walks you through the essentials of economic data manipulations." This webpage is a good resource, explaining terms and concepts such as seasonally adjusting data, growth rates versus levels, deflating nominal to real values, and early benchmarking.

(5.) Keep in mind, a projection is a mechanical extension of the past trends into the future, while a forecast considers the past trends as well as current and likely future events, influences, and attitudes of influencing parties and entities.

(6.) This website has archives of past forecasts for comparison purposes.

(7.) As noted by the Bureau of Labor Statistics, the CPI is used "as a means for adjusting income payments. Over 2 million workers are covered by collective bargaining agreements which tie wages to the CPI. The index affects the income of almost 80 million people as a result of statutory action: 47.8 million Social Security beneficiaries, about 4.1 million military and Federal Civil Service retirees and survivors, and about 22.4 million food stamp recipients. Changes in the CPI also affect the cost of lunches for the 26.7 million children who eat lunch at school. Some private firms and individuals use the CPI to keep rents, royalties, alimony payments and child support payments in line with changing prices. Since 1985, the CPI has been used to adjust the Federal income tax structure to prevent inflation- induced increases in taxes" [emphasis added]; see http://bit.ly/blscpi.

(8.) http://bit.ly/CPIguide.

(9.) The CPI-W represents a subset of the CPI-U population, that is, the expenditures by urban households that derive more than one-half of their income from clerical or hourly wage occupations.

(10.) Some of the goods and services included in the CPI have seasonal variation; BLS factors out the seasonal trends so the data is seasonally adjusted. For further explanation see http://bit.ly/CPIguide.

(11.) C-CPI-U data can be found on the BLS website at http://bit.ly/chainedCPI with a discussion at http://bit.ly/introchainedcpi. The C-CPI-U index supplements existing indexes and employs a formula that reflects the effect of substitution that consumers make across item categories in response to changes in relative prices. The C-CPI-U is also distinguished from the CPI-U and CPI-W based on the expenditure weights and formula used to produce aggregate measures of price change; see http://bit.ly/faqcpi.

(12.) Other inflation calculators are available, such as http://bit.ly/statscalculator and www.usinflationcalculator.com (also look at the "Inflation FAQs" on this site at http://bit.ly/inflationfaq).

(13.) The real interest rate is commonly regarded as the rate of interest a saver or investor or lender receives (or expects to receive) after allowing for inflation. The Fisher equation provides that the real interest rate is approximately the nominal interest rate minus the inflation rate. Natural and neutral interest rates are contrasted in "Natural and Neutral Rates of Interest in Theory and Policy Formulation" by Roger W. Garrison at www.auburn.edu/~garriro/natneut.pdf. Some generally regard the two terms as virtually the same concept. The Fed may temporarily set the benchmark Fed funds rate (the rate at which banks borrow from each other) to stimulate or cool the economy but will ultimately rely on its estimates of the natural rate to decide the direction rates should go and the level rates should reach. Since households and businesses make investment and savings decisions based on what they think interest rates will be in the future, the Fed's views on the natural rate have immediate importance.

(14.) Financeformulas.net: www.financeformulas.net/ReaLRate_of_Return.html
Exhibit 3 BLS CPI Databases with View Options

Database Name                             Special   Top      Data
                                          Notice    Picks   Finder

All Urban Consumers (Current Series)                 TOP
(Consumer Price Index-CPI)                          PICKS

Urban Wage Earners and Clerical Workers              TOP
(Current Series)                                    PICKS
(Consumer Price Index-CPI)

All Urban Consumers (Chained CPI)         SPECIAL    TOP
(Consumer Price Index-CPI)                NOTICE    PICKS

Average Price Data                        SPECIAL    TOP
(Consumer Price Index-CPI)                NOTICE    PICKS

Database Name                                One          Multi-
                                            Screen        Screen

All Urban Consumers (Current Series)      ONE-SCREEN   MULTI-SCREEN
(Consumer Price Index-CPI)                DATA SEARCH   DATA SEARCH

Urban Wage Earners and Clerical Workers   ONE-SCREEN   MULTI-SCREEN
(Current Series)                          DATA SEARCH   DATA SEARCH
(Consumer Price Index-CPI)

All Urban Consumers (Chained CPI)         ONE-SCREEN   MULTI-SCREEN
(Consumer Price Index-CPI)                DATA SEARCH   DATA SEARCH

Average Price Data                        ONE-SCREEN   MULTI-SCREEN
(Consumer Price Index-CPI)                DATA SEARCH   DATA SEARCH

Database Name                             Tables   Text Files

All Urban Consumers (Current Series)      TABLES   TEXT FILES
(Consumer Price Index-CPI)

Urban Wage Earners and Clerical Workers   TABLES   TEXT FILES
(Current Series)
(Consumer Price Index-CPI)

All Urban Consumers (Chained CPI)         TABLES   TEXT FILES
(Consumer Price Index-CPI)

Average Price Data                        TABLES   TEXT FILES
(Consumer Price Index-CPI)

Source: Bureau of Labor Statistics, www.bls.gov/cpi/data.htm


Caption: Exhibit 1 Map of Federal Reserve Districts

The Federal Reserve officially identifies Districts by number and Reserve Bank city.

1 - Boston 2 - New York 3 - Philadelphia 4 - Cleveland 5 - Richmond 6 - Atlanta 7 - Chicago 8 - St. Louis 9 - Minneapolis 10 - Kansas City 11 - Dallas 12 - San Francisco * - Board

Source: www.federalreserve.gov/aboutthefed/federal-reserve-system.htm

Caption: Exhibit 2 FRED Graph--CPI for All Urban Consumers: All Items

Source: FRED, https://fred.stlouisfed.org/series/CPIAUCSL
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Author:Swango, Dan L.
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Date:Mar 22, 2017
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