The Week Ahead: Congress is Back in Session

After taking the month of August off, Congress is back in session this week with a hearing in a House Financial Services Committee subcommittee to examine the economic health of Federal Reserve Districts.

A hearing titled “Federal Reserve Districts: Governance, Monetary Policy, and Economic Performance” in the Monetary Policy and Trade Subcommittee will kick off on Wednesday, September 7, at 10 a.m. Eastern. Witnesses at the hearing will be Esther L. George, President and Chief Executive Officer, Federal Reserve Bank of Kansas City; Robert G. Jones, Chairman and Chief Executive Officer, Old National BanCorp; Dr. Jeffrey M. Lacker, President and Chief Executive Officer, Federal Reserve Bank of Richmond; and The Honorable William Spriggs, Chief Economist, AFL-CIO and Professor, Department of Economics, Howard University.

According to the Committee Memorandum, “The hearing will examine the governance of the Federal Reserve Banks, and how it relates to the conduct of monetary policy and ultimately economic performance. The Federal Reserve System consists of a Board of Governors and twelve regional Federal Reserve Banks.  Each Reserve Bank is responsible for a particular geographic area of the United States, and each one has its own board of nine directors.  The Reserve Banks are responsible for a variety of functions, including operating a nationwide payments system, distributing the nation’s currency and coins, and, with authorization from the Board of Governors, provide financial assistance to solvent borrowers that could not secure adequate credit accommodations from other banking institutions.”

Labor Market Conditions for August 2016, Federal Reserve—Wednesday, September 7, 10 a.m. EST

The Fed is scheduled to release its labor market conditions index because of a dual mandate from Congress. This index is reported to go beyond looking at the unemployment rate and payroll jobs gains to provide a broad view of the labor market that the Fed watches for one of the two mandates, healthy job growth and low and stable inflation. This index at times can affect Fed policy, according to Bloomberg.

The labor market conditions index summarizes a wide range of labor market indicators and Bloomberg notes that The Fed not only creates this index but also watches it for interpreting the health of the labor market.

The labor market conditions index is by definition an index, meaning higher index numbers are positives and vice versa. The report focuses on the change in the index how strong a plus change or a negative change. A plus indicates improving labor market conditions. But there is extreme detail with 19 components. Subcomponent detail can be important says Bloomberg, depending on how many components are positive versus those that are negative. A key feature of this report is that it pulls together many labor market indicators into one place.

The Fed will release this month’s index on Tuesday, September 6, at 10 a.m. Eastern.

This week’s schedule

Monday, September 5, 2016
Labor Day

Tuesday, September 6
Black Knight Financial Services Mortgage Monitor for July 2016
Labor Market Conditions for August 2016, Federal Reserve, 10 a.m. EST

Wednesday, September 7
Hearing entitled “Federal Reserve Districts: Governance, Monetary Policy, and Economic Performance,” House Monetary Policy and Trade Subcommittee, 10 a.m. EST

Sunday, September 11 through Tuesday, September 13
13^th Annual Five Star Conference and Expo, Dallas, Texas