201804.19
1
1

Hawkish

At their December 2017 policy meeting, the FOMC majority voted to increase the monetary policy targets (RRP & IOER) by an additional 25 bps. It was the fifth such move dating back to December 2015. It was not, however, a unanimous decision. Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari both opposed…

201804.16
3
6

The Retail Sales Shortage

Retail sales rose (seasonally adjusted) in March 2018 for the first time in four months. Related to last year’s big hurricanes and the distortions they produced, retail sales had surged in the three months following their immediate aftermath and now appear to be mean reverting toward what looks like the same weak pre-storm baseline. Exactly…

201804.13
4
8

There Aren’t Two Labor Markets

Allusions to a labor shortage continue to be ubiquitous. Two weeks ago, the Wall Street Journal published yet another such story under the headline Iowa’s Employment Problem: Too Many Jobs, Not Enough People. Ostensibly about the experiences of companies trying to hire in the one state, the implication was clear enough. If Iowa, IOWA, has…

201802.01
2
1

The Unemployment Rate Could Be Zero…

One more point on the hourly compensation estimates as they relate to this supposed labor shortage. As I wrote in examining the Beveridge Curve from a different, and ultimately more consistent, perspective: It just doesn’t work that way. In a real labor shortage, wage gains wouldn’t be modest because they couldn’t be modest. If they…

201801.17
1
3

The Dissonance Book

I’ve found the word “dissonance” has become more common in regular usage beyond just my own. Whether that’s a function of my limited observational capacities or something more meaningful than personal bias isn’t at all clear. Still, the word does seem to fit in economic terms more and more as we carry on uncorrected by…

201711.29
3
0

Progress, So To Speak, With Some Japanification Denial

Ever since Robert Solow and Paul Samuelson wrote of an exploitable Phillips Curve in 1960, economists have had dreams of being able to precisely control the economy through the exchange of inflation and unemployment. The original paper, the one sold to, and bought by, the Kennedy Administration, theorized it was possible to sort of “purchase”…

201709.12
2
5

The JOLTS of Drugs

Princeton University economist Alan Krueger recently published and presented his paper for Brookings on the opioid crisis and its genesis. Having been declared a national emergency, there are as many economic as well as health issues related to the tragedy. Economists especially those at the Federal Reserve are keen to see this drug abuse as socio-demographic…

201707.31
8
4

Hyping Lean

Activist hedge fund manager Bill Ackman succeeded in 2013 in ousting Procter & Gamble’s CEO Bob McDonald. It was noteworthy at the time because the company issued a strange memo repeating often verbatim answers to questions it posed to itself. Among them was if Mr. McDonald was fired or, as had been relayed publicly, he…

201707.17
3
3

Qualifying Shortage (Labor)

There isn’t a day that goes by in 2017 where some study is released or anecdote is published purporting a sinister labor market development. There is a shortage of workers, we are told, often a very big one. The idea is simple enough; the media has been writing for years that the US economy was…

201706.06
2
2

Forced Finally To A Binary Labor Interpretation

JOLTS figures for the month of April 2017, released today, highlight what is in the end likely to be a more positive outcome for them. It has very little to do with the economy itself, as what we are witnessing is the culmination of extreme positions that have been made and estimated going all the…