The US monthly employment data has been the single most important high frequency economic report. It was a key in the recession of the Great Financial Crisis, and it was an important metric of the recovery. Recent reports have been distorted by the storms in late Q3 and early Q4. September jobs growth fell to …
Low unemployment rates in the US, UK, and Japan have not fueled much wage pressure, and this is vexing policymakers. They are unable to normalize monetary policy because inflation remains subdued, and it is difficult to envision a sustained and durable increase in price pressures without higher wages. There may not have been any other …
Labor, Inflation, Aggregate Demand, and French Reforms Read More »
Charles Wilson, former CEO of General Motors before becoming Defense Secretary under President Eisenhower, once famously quipped that “what is good for the country is good for GM and vice versa.” While the veracity of that claim has been challenged, the fact of the matter is that since the Great Financial Crisis, the auto sector …
US Auto Sector and Broader Thoughts on the US Labor Market Read More »
A little while back I was part of a small exchange of views on twitter. It was about Italy. I was arguing against a claim that Italy’s woes are all about its past fiscal excesses. It is not just about about Italy’s legacy. It is true that Italy runs a primary budget surplus. The primary …
Great Graphic: Italy–It is Not Just about Legacy Read More »
There are many puzzles that befuddle economists. One is why productivity is so low. Another is the return of the old Greenspan conundrum of why long-term interest rates do not increase as the Fed raises short-term rates. As the monthly non-farm payroll report approaches, it may be useful to consider another conundrum. Why is wage …
We have suggested the risk of disappointment with the US December jobs data. There is not a tight fit on a monthly basis between the ADP estimate, and the first estimate of the BLS, the disappointment with the ADP estimate (153k vs. median estimate of 175k and an upwardly revised 215k in November) lends a …
This Great Graphic caught my eye. It was tweeted by Ninja Economics. Her point was about immigration. German had much higher immigration than the UK, but also saw real wage increase of nearly 14% in the 2007-2015 period, while real wages in the UK fell nearly 10.5%. She noted that Greece is the only developed …
This Great Graphic comes from the Wall Street Journal. It shows what is happening to the pay of the least compensated in the US. Their pay is going up at a pace that is exceeding the averages and inflation. The data is from Q2 16. Weekly wages for full-time employees in the 25th percentile, earning …
All that is solid is melting. After Copernicus, we know that earth is not the center of Creation. Darwin showed us that humans are part of the animal kingdom. Freud told us we are not even masters of our own house. Even the speed of light is not a constant. It has been slowed under certain …
The Need for Higher Wages: Lots of Thunder, No Rain Read More »