unit labor costs

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

By |2018-09-06T17:33:38+00:00September 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 [...]

The Wage Test

By |2018-08-17T15:32:34+00:00August 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 [...]

Proving The ‘L’ In Labor

By |2018-06-06T12:15:56+00:00June 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 [...]

Someone Is On Drugs, Alright

By |2018-05-03T18:10:34+00:00May 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 [...]

Waiting For Godot’s Wages

By |2017-12-06T15:36:07+00:00December 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 [...]

Aligning Politics To economics

By |2017-11-06T17:29:03+00:00November 6th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is no argument that the New Deal of the 1930’s completely changed the political situation in America, including the fundamental relationship of the government to its people. The way it came about was entirely familiar, a sense from among a large (enough) portion of the general population that the paradigm of the time no [...]

Enough With The Labor Shortage Already, It Doesn’t/Can’t Exist

By |2017-09-07T18:39:00+00:00September 7th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Can we finally put to rest all notions that the US economy is at full employment and doing well, and therefore wage inflation is right around the corner? I suspect not. This dance has been ongoing for years now, continuing through what was nearly a recession, so there is little reason to believe that economists [...]

Why Unemployment Is High

By |2012-05-03T21:37:12+00:00May 3rd, 2012|Economy, Investing|

One graph tells the story:   Think about that for just a minute. Unemployment is over 8% and yet unit labor costs are almost back to their all time high. If the goal is to reduce unemployment the obvious way to do that is to reduce the cost of employment. For whatever reason, that isn't [...]

Weekly Economic & Market Review

By |2012-03-11T16:12:23+00:00March 11th, 2012|Economy, Markets|

Is the Greek debt crisis over? Based on the stock market reaction last week one is tempted to say, yes, finally the Greek problem has been solved. Stocks sold off early in the week when it looked as if the deal might not be fully subscribed but recovered as European leaders managed to twist enough [...]

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