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Jared Bernstein: On the economy

A Multitude of Lynx

Various posts at WaPo for those interested: Trump’s creating all sorts of waves in the oceans of international trade, and that’s led some analysts to worry that the reserve status of the US dollar could be under threat (63% of global reserve holdings are in dollars). While this isn’t the path I’d take to get there, of course–I’m solidly against Trumpian chaos–at this point, the costs of printing the premier reserve currency outweigh the benefits. This one generated a fair bit of interest....

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Republicans’ “Jobs Gap” is a misleading measure that means nothing.

The Republicans’ “Jobs Gap” is a meaningless measure that reveals nothing about the job market. It can, and is, easily manipulated to show any outcome you like. On the other hand, the facts about the current labor market are as follows. –The long-term trend of job growth remains solid, unemployment is low, and, contrary to claims related to the “jobs gap,” employment among working-age people is growing relative to their population. –Anecdotes suggest that some particularly hot labor markets...

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Three musical interludes to start the weekend on the good foot: Soul/funk edition

I’ve once again been remiss in sharing what I’m listening to, but here are three jams that will make you smile. The second two will also make you get up and dance, whether you want to or not. First, I loved this carpool karaoke with Stevie Wonder. Even when he’s screwing around, his genius can’t help but flow out. And it’s a reminder of the so many masterpieces he’s penned! Second, I was walking by a store the other day and they were blaring this great, old Curtis Mayfield hit–put me in a...

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April Jobs: More moderate than strong, with no wage acceleration.

Today’s employment report revealed labor market gains that were more moderate than strong. The unemployment rate fell to 3.9%, an 18-year low, but this was mostly due to a tick down in the labor force. Employment gains, at 164,000, came in slightly below expectations for 190,000, though the prior two months’ gains were revised up by a cumulative 30,000. Wages grew 2.6% for the third month in a row; this continued lack of acceleration is one indicator that some labor market slack remains. That...

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Four lessons about contemporary monetary policy.

Yes, we live in chaotic, uncertain times, with nationalism, populism, and protectionism on the rise. Also, hush money to porn stars. But amidst the noise, the Federal Reserve is quietly going about its business, hitting its dual mandate of full employment at stable prices. That is, the job market is close to full employment, with caveats, and inflation is at their 2% target, also with caveats. Like almost every economist who’s not at the Fed (and some inside), I’ve got issues with some of...

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Deficit, schmeficit…[try saying that 3 times fast]

In my not-at-all-humble opinion, we need many more articles like this one by the WaPo’s Jeff Stein on the so-called deficit owls. They’re the opposite of deficit hawks, the first to ask “so what?” when the typical DC pundit bemoans the trillion dollar deficits we’re now looking at in coming years. (Why that makes them deficit ‘owls,’ as opposed to deficit ‘doves,’ I don’t know, and no, I’m not going to Google it.) “So what?” is, in fact, a very useful, important question in this space. While...

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Employment Breakeven Levels: They’re higher than most of us thought

Recent writings underscore an important hole in economists’ knowledge base: we know neither the natural rate of unemployment nor the potential level of GDP. I mean, we’ve got estimates for days, but an honest confidence interval around them renders them useless as policy guidelines. As Alan Blinder recently put it: “For [the natural rate] to be useful you have to have at least a little confidence you know the number. You don’t need to know it to two decimal places, but within a reasonable...

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Three pieces on why work requirements won’t work

The Trump admin and their allies in Congress are trying to add work requirements to anti-poverty programs. A number of excellent sources explain why this won’t work, where “work” means help poor adults move closer to self-sufficiency. Of course, if the goal is to simply kick people of the rolls, which for some legislators, I’m certain is the case…well, then I guess it could work. First, this efficient WaPo editorial gives you the facts and the numbers behind why this pursuit of work...

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Real wages for mid-wage workers actually haven’t grown much over the past couple of years.

We always talk a lot about wage growth on jobs day because, you know, it’s jobs day. But later in the month, when the inflation numbers for the previous month are released, we should really say something about real, as in inflation-adjusted, wage growth. After all, what matters most to people is the buying power of their paychecks, right? When the BLS real earnings report came out yesterday, I saw that Trump’s economic advisers tweeted out this pat-on-the-back: But their claims should not be...

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Some lynx: Unions, CBO’s new baseline, the Bernstein Rule…

The teachers provide us with a teaching moment, over at WaPo. Their actions pose a stark reminder of the essential need for a strong, organized movement to push back on the forces promoting inequality, non-representative government, trickle down tax policy, and more. CBO released their updated “baseline,” or estimate of the US gov’t’s fiscal outlook. If you like red ink, you’re in biz. Instead of deficits between 3 and 4% of GDP over the next few years, we’re looking at deficits of 4-5%. As...

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