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unit labor costs

Like Repo, The Labor Lie

By |2020-03-05T19:23:17-05:00March 5th, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve has been trying to propagate two big lies about the economy. Actually, it’s three but the third is really a combination of the first two. To start with, monetary authorities have been claiming that growing liquidity problems were the result of either “too many” Treasuries (haven’t heard that one in a while) or the combination of otherwise [...]

Not Only No Labor Shortage, Latest Labor Market Data Is Closer to Rate Cuts

By |2019-05-02T16:22:02-04:00May 2nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Yesterday, the FOMC altered its view of household spending and business capex. It wasn’t a huge difference, they never are. Figuratively, these sorts of downgrades are little by little even though if things were ever to go the right way the language upgrades wouldn’t be subject to so much reservation. There isn’t much in the official statements anyway, just a [...]

No Surprise, Hysteria Wasn’t a Sound Basis For Interpretation

By |2019-02-27T17:11:06-05:00February 27th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What gets them into trouble is how they just can’t help themselves. Go back one year, to early 2018. Last February it was all-but-assured (in mainstream coverage) that the US economy was going to take off. The bond market, meaning UST’s, was about to be massacred because the overheating boom would force a double shot down its throat. Not only [...]

Unexpected?

By |2018-12-05T11:50:26-05:00December 5th, 2018|Markets|

Now that the slowdown is being absorbed and even talked about openly, it will require a period of heavy CYA. This part is, or at least it has been at each of the past downturns, quite easy for its practitioners. It was all so “unexpected”, you see. Nobody could have seen it coming, therefore it just showed up out of [...]

It’s A Dollar-based Boom Shortage More Than Anything

By |2018-09-06T17:33:38-04:00September 6th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Liquidity preferences are one of the least discussed economic concepts. There are several channels into which monetary instability can hamper the real economy. A “dollar” squeeze doesn’t just impact banks, they often pass it along further down the economic chain. In its most extreme form, we had something like 2009. Some of the best companies all over the world found [...]

The Wage Test

By |2018-08-17T15:32:34-04:00August 17th, 2018|Markets|

In August 2014, then-Federal Reserve Chairman Janet Yellen described the wage dilemma in some detail. She was still relatively new to the job at that time, and there was pressure on her from among the so-called hawks to more aggressively normalize monetary policy. Ben Bernanke had taken the more cautious approach having experienced what both he and Yellen would afterward [...]

Proving The ‘L’ In Labor

By |2018-06-06T12:15:56-04:00June 6th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Back in 2011 and 2012, apple growers in the state of Washington got the government there to declare an emergency. They were expecting a record or near-record crop of fruit but they just couldn’t find enough workers to harvest it all. Faced with a potentially devastating labor shortage, Washington’s governor turned to convicts. I wrote about it in 2013 and [...]

Someone Is On Drugs, Alright

By |2018-05-03T18:10:34-04:00May 3rd, 2018|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the second straight quarter, the Bureau of Labor Statistics (BLS) estimates US productivity growth was less than 1%. That’s not surprising given the weakening in output as measured by GDP, the data reported by the Bureau of Economic Analysis (BEA). Productivity is the bridge between the BLS’s labor numbers and the more general economic assessments of the BEA (Private [...]

Waiting For Godot’s Wages

By |2017-12-06T15:36:07-05:00December 6th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Though the BEA revised GDP slightly higher for Q3 2017, the government agency took hourly compensation out to the woodshed. On a quarterly basis, this metric of labor market wage pressures is often quite volatile. In Q4 last year, for instance, nominal hourly compensation was -4.5% Q/Q (annual rate), followed immediately by a 4.9% gain in Q1 2017. For Q3 [...]

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