by Dr. Douglas Scarboro
An important part of my role as the regional executive for the Memphis Branch of the Federal Reserve Bank of St. Louis is the exchange of economic information. For instance, one of my top priorities is to gather information on the economy in the Memphis region and pass it on to those in our St. Louis office who are involved in monetary policymaking and related research, including St. Louis Fed President James Bullard.
With the Fed, the sharing of economic information isn’t a one-way street. What President Bullard and his staff of economists learn about the economy, we share whenever possible to business and civic leaders, and the general public across the Memphis region. This happens via a variety of channels — through one-on-one meetings and speeches open to all, and through the wide variety of resources we make available for free to the general public. One of our most popular online resources is called FRED (Federal Reserve Economic Data,) where you can track widely followed data-based economic indicators that reflect the state of the health of the economy. These include reports like the unemployment rate, inflation, housing starts, and crude oil prices, just to name a few.
While these reports and data contribute a great deal to the picture of the health of the economy, the Fed also gathers and shares valuable anecdotal information on current economic conditions via publications like the Beige Book, and in the St. Louis Fed’s region, the Burgundy Books, also available free online.
While official reports and data, along with the anecdotal information provided by sources like the Beige Book and the Burgundy Books, are extremely valuable, I have found that some of the best insights come from conversations with everyday people, from farmers in rural Arkansas to bankers in downtown Memphis.
One of my favorite things is hearing the unique anecdotal economic indicators used by people to gauge how things are going in their respective industries and regions. Some examples include:
A contact of mine was discussing the rural economy and noted that he can gauge how well things are going by how full the Wal-Mart parking lot is on Saturdays at 2 p.m.
Earlier this year, a popular restaurateur in New Orleans noticed that while people were still coming into his restaurants, they were not ordering higher ticket entrees. However, they still continued to order lower tickets items like dessert. This occurred during the recent downturn in this region’s employment rate due to lower oil prices.
A larger local manufacturer noted how much more cardboard box purchases rise when businesses are increasing their shipments of goods. Since most companies do not over-order supplies, it is easy to tell when orders are down since cardboard box purchases decline. He is in good company on this one: Former Fed Chairman Alan Greenspan was reportedly fond of tracking unconventional indicators like the corrugated box shipments and prices of liner board, the main component of cardboard boxes.
A large logistics company measures the weight of items and uses it as a determinant of shipping demand.
I’m interested in hearing about the types of economic indicators that you use to assess the health of the economy and invite you to email me at email@example.com.
Dr. Douglas Scarboro is regional executive/VP of the Memphis branch of the St. Louis Federal Reserve Bank.
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