We document heterogeneity in the evolution of income growth since the Great Recession. Using administrative data on the incomes of over 7 million households, we estimate the extent to which lower-income households began to catch-up with higher earners in two distinct phases: first, as the labor...

In this report, we study the mid-2013 taper tantrum—a market event comprised of a series of policy communications from the Federal Reserve that contributed to sharp volatility across global asset prices—as a case study to shed light on a widely-referenced monetary policy shock. Our research...

The rise in inflation since mid-2021 to multi-decade highs presents a worrying trend for households’ financial health, particularly if nominal incomes, or non-inflation adjusted income, of financially vulnerable families lag behind prices. Policymakers have noted that lower income households...

Income disparities by race are large and persistent in the U.S., and shifts in economic cycles often exacerbate these inequalities. Recent cycles, such as the pandemic-induced recession, offer a glimpse into how a tight labor market and targeted fiscal supports can boost broad-based economic...

We study the consumption response to typical labor income shocks and investigate how these vary by wealth and race. First, we estimate the elasticity of consumption with respect to income using an instrument based on firm-wide changes in monthly pay. While much of the consumption-smoothing...

We estimate the elasticity of consumption with respect to income using an instrument based on firm-wide changes in pay. While much of the consumption-smoothing literature uses variation in unusual windfall income, this instrument captures the temporary income variation that households typically...

Even amidst strong macroeconomic conditions, families experience high levels of income volatility that have important implications for well-being. Families with limited liquid assets are dramatically less likely to smooth consumption in the face of income fluctuations, and it stands to reason...

In this JPMorgan Chase Institute report, we document a high-frequency relationship between stock market returns and patterns observed in consumer spending and investing behavior. The analysis draws from a core sample of approximately 12 million active Chase credit card users since 2012, and we...

In this paper we estimate the magnitude of spillovers between bond markets in the U.S. and Germany following monetary policy communications by the FOMC and the ECB. The identification of policy-related co-movements following FOMC announcements, in particular, can be difficult because many...