New Investment Study Findings Recently Were Reported by Researchers at Federal Reserve Bank (Drivers of Wage and Employment Growth In Recent Years: a Supply and Demand Decomposition): Investment

2026 JUN 22 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Current study results on Investment have been published. According to news reporting originating from St. Louis, Missouri, by NewsRx correspondents, research stated, “Understanding whether labor market developments stem from supply or demand forces has fundamental implications for the conduct of monetary policy. This article develops a structural vector autoregression (VAR) methodology to decompose U.S. employment and wage growth into supply and demand components using sign restrictions.”

Our news editors obtained a quote from the research from Federal Reserve Bank, “Extending Shapiro 2026, we separately identify trend growth, current shocks, and past shocks across different industries. Results reveal that goods-producing sectors experienced strong demand-driven growth in 2022, which subsequently weakened as Federal Reserve tightening took effect. Service sectors showed robust demand through 2023, but by 2025, supply-side factors-likely due to immigration policy changes-became dominant. We validate our shock identification by linking estimated demand shocks to financial dependence measures during monetary tightening and supply shocks to immigration flows.”

According to the news editors, the research concluded: “These findings highlight the asymmetric nature of post-pandemic labor market rebalancing and underscore the importance of distinguishing supply from demand forces for appropriate monetary policy calibration.”

This research has been peer-reviewed.

For more information on this research see: Drivers of Wage and Employment Growth In Recent Years: a Supply and Demand Decomposition. Review, 2026;108(4):1-6. Review can be contacted at: Federal Reserve Bank St Louis, Box 442, St Louis, MO 63166, USA.

The news editors report that additional information may be obtained by contacting Maximiliano Dvorkin, Federal Reserve Bank, St. Louis, MO 63102, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.20955/r.2026.04. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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