GLOSSARY OF TERMS

Beige Book

A compilation of economic conditions from each of the 12 Federal Reserve districts. Data are anecdotal and qualitative, rather than quantitative, in nature. This book is produced before the monetary policy meetings of the Federal Open Market Committee.

Chair's News Conference

The Fed announced on March 24, 2011 that then Fed Chair Ben Bernanke would hold press briefings four times a year to explain the FOMC's latest quarterly economic projections. Additionally, the purpose of the briefings is to provide additional context for the FOMC's policy decisions and to allow for Q&A with the press.  According to the Fed, the "introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve's monetary policy communication."   As of March 20, 2013, the press briefing is held at 2:30 p.m. ET on the days of FOMC statements in which quarterly projections are released. These FOMC statement dates are designated as the ones released in the final month of each quarter—March, June, September, and December.  The policy statement is released at 2:00 p.m. ET after the conclusion of every FOMC meeting regardless of whether there are forecasts or not.  This schedule started March 20, 2013.  Fed Chair Janet Yellen continues this practice of holding the quarterly chair press conference.

Consumer Price Index

The Consumer Price Index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation.

Employment Cost Index

A measure of total employee compensation costs, including wages and salaries and the costs of benefits. The employment cost index (ECI) is the broadest measure of labor costs.

FOMC Meeting

The Federal Open Market Committee consists of the seven Governors of the Federal Reserve Board and five Federal Reserve Bank presidents. The FOMC meets eight times a year in order to determine the near-term direction of monetary policy. Changes in monetary policy are announced immediately after FOMC meetings.

Humphrey-Hawkins

In the 1980s and 1990s, legislation required that the Federal Reserve Board would provide a semi-annual report to Congress on the state of the economy and targets for growth, inflation, unemployment rate and monetary aggregates. The Federal Reserve chairman would then testify to House and Senate Banking Committees in February and July. While this legislation expired, the Fed still provides semi-annual reports to Congress and the Fed chairman continues to testify before Senate and House Committees, not just in February and July, but throughout the year.

PCE Price Index

The PCE (personal consumption expenditure) price index draws data extensively from the consumer price index. However, it reflects changes in the composition of spending as well as changes in prices of goods and services. As a result, this is a variable-weight, rather than a fixed-weight basket of goods, and is less prone to upward bias. It is included in the "Personal Income and Outlays" report which is issued monthly by the Bureau of Economic Analysis.

Pool of Available Workers

This is equal to the number of unemployed workers plus those not in the labor force who report that they want a job now. Both figures are now seasonally adjusted; the total number is calculated by Haver Analytics.

Productivity and Costs

Productivity measures the growth of labor efficiency in producing the economy's goods and services. Unit labor costs reflect the labor costs of producing each unit of output. Both are followed as indicators of future inflationary trends.

Unemployment Rate

The unemployment rate measures the number of unemployed as a percentage of the labor force.