Thursday , August 16 2018
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Jared Bernstein: On the economy

Lynx; Trump/Erdogan: compare and contrast

Recent links to WaPo pieces: Productivity and wages: They’re connected, of course, but the extent of the connection requires nuanced analysis of wages at different percentiles and movements in labor’s share of national income. There’s an interesting dichotomy here in how economists and people think about productivity and wages. For many economists, it’s the determinant of wage growth. For many people, it’s irrelevant, in that powerful forces divert productivity growth from paychecks to...

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Trump 2020 game plan: Fake Laffer, Go Keynes.

I’m genuinely sorry to intrude on your Sunday like this, but this new forecast (no link) from the highly-skilled Goldman Sachs economic research team (GS) has me completely on shpilkes. I’ll make it brief, but not painless. Back when the tax cut passed, this figure, also from GS, previewed an important fiscal fact about to unfold: outside of wartime, the Republican tax cuts and other deficit spending would add more fiscal juice to an economy already closing in on full employment than we’d...

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July’s Jobs Report: Solid jobs but little wage acceleration

Summary: Today’s jobs report shows the U.S. labor market remains in a strong groove, with payrolls up 157,000 last month as the unemployment rate ticked down to 3.9 percent. The broader underemployment rate (“U-6”)–a more comprehensive measure of labor market slack–fell to 7.5%, its lowest rate since 2001, thanks to more part-timers finding the full-time jobs they seek. Wage growth, however, remains a sore spot and despite further tightening, did not accelerate. Expectations were for a higher...

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Breaking News: Trump’s chief economist says some reasonable things! (And some other stuff, too.)

I was just on MSNBC with Ali Velshi talking about today’s GDP report (here’s my take). I came on right after Ali interviewed Kevin Hassett, the chair of Trump’s Council of Economic Advisers. Since Ali and I were so engrossed in GDP talk, I didn’t get a chance to note some of the things Kevin said that were on point, and since you don’t get a lot of that from this crew, and because I’ve been highly critical of this CEA’s work in other areas, let me agree with some of Kevin’s points but also...

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Prepping for Friday: What’s trend GDP growth?

This Friday morning at 8:30, we’ll see the first estimate of GDP for 2018Q2. Various trackers have it coming in at or above 4% (that’s the real, annualized quarterly growth rate). It’s that ballpark correct, as I expect it is—the trackers use much of the same incoming data as BEA—it will be a big political football, but that’s not the purpose of this post. Here, I’d like to think about the best way to pull out the underlying trend of real GDP growth. While team Trump will be going bananas for...

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Responding to questions re my wage oped.

I’ve got a piece in the NYT on the cyclical, and more importantly, structural factors, that have long suppressed real wage gains. I’ve gotten many interesting responses, some of which I’ll address here. Inflation: As I stressed in the piece, the ups and downs in price movements have been instrumental in recent years. A lot of this is energy prices, which crashed in 2015 and have picked up of late. If energy prices pull back, especially as unemployment falls further, real working-class pay...

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Team Trump’s phony poverty argument, GDP growth v. chaos, and a little e.g. of where an FTT would come in handy.

First, Trump’s Council of Economic Adviser abuses data and logic to conclude that work requirements would help poor people. Over at WaPo. Next, I will not stray from my lane and comment on what everybody’s thinking about today: the summit from Hel…sinki. I will share this Steven Colbert clip, to which I’ve nothing to add. I do, however, find it interesting that amidst all this madness–which feels too much like an existential threat to American democracy from within–the US macroeconomy is, if...

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Lynx, trade politics, a super swingin’ slice of Kelly Roll, and a bit of pop psychology re JOMO

Trade policy has been really interesting of late. I get into the economics of what I think is going on here and here. The first piece makes the argument that Trump is fruitlessly and fecklessly trying unscramble the globalization omelet. The second takes on–with help from a great, new Susan Houseman paper–the incorrect but pervasive notion that the increased pace of labor-saving technology is responsible for manufacturing job loss. I don’t get into the politics of trade in these pieces...

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Why I’m not paying too much attention to the flattening yield curve.

As Nick Timiraos ably describes, there’s a debate afoot about how seriously to take the flattening and possible future inversion of the yield curve. I got into this a bit last week, pointing out that the signal from the yield curve is a lot more ambiguous than usual (my conclusion was that we should worry a lot more about how we’re going to offset the next recession versus when it’s coming, which is not reliably knowable). One reason for this ambiguity is the very low term premium on...

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More solid job gains, but no real wage growth

In the latest solid report on the conditions in the US labor market, payrolls grew by 213,000 in June, and labor force participation ticked up two-tenths, as more people were pulled into the improving labor market. This led to a two-tenths tick-up in the unemployment rate to 4 percent (really, 30 basis points up, from 3.75% to 4.05%). Wage growth stayed at 2.7 percent, the same pace as last month, and the average since last December. It is also worth noting that inflation is now growing at...

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