First, there’s this WaPo piece on an important benefit of full employment: the closure of racial unemployment gaps. The piece links to a new Fed study that’s worth a close look. Nothing OTE’ers wouldn’t know given my emphasis on the disproportionate benefits of tight labor markets to less advantaged groups, but the Fed study provides… Read more
Archive for the ‘Federal Reserve’ Category
Here’s an idea: let’s have Congress micromanage the Fed…what could go wrong?
Over at WaPo. In preparing for something, I was reading the text of the Choice Act–that’s the financial deregulation bill the House recently passed (there’s a link in the piece). I knew the Act included some pretty invasive Fed oversight but when I actually read the legislation (Title X), the old jaw dropped. It writes… Read more
Is the Fed fighting an old war?
As expected, as their meeting concluded yesterday, Federal Reserve Chair Janet Yellen and company decided to raise the benchmark interest rate they control by one-quarter of a percentage point. The question is: why? She was, of course, asked about this in lots of different ways in her press conference. [Pause here for a moment and… Read more
Jobs report: Some softening in May. Should the Fed hold off on next rate hike? I say…[read on]
Employers added only 138,000 jobs last month, well below expectations for 175,000. Revisions to payrolls for the prior two months reduced employment gains by 66,000. The unemployment rate fell to 4.3 percent, its lowest level since 2001, but for the wrong reason: labor force participation fell by two-tenths of a percent. In other words, this… Read more
Inflation, earnings, and spending: a review of recent trends
I need a serious break from the ugliness of DC health-care politics, so let’s talk about three interesting and related economic questions: inflation, labor demand, and consumer spending. First, why does inflation continue to respond so weakly, if at all, to the tightening job market? The traditional response is “because the Phillips curve (the relationship… Read more