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Jared Bernstein: On the economy

January Jobs: Another upside surprise shows the benefits of closing in on full employment.

The US labor market just keeps on rolling along, turning in one good jobs report after another. Payroll gains continue to outpace expectations, wages are handily beating inflation while not pushing it up much, participation continues to suggest more room-to-run than most economists expected, and even the slight uptick in the unemployment rate last month, to 4 percent, was likely a temporary blip caused by the government shutdown (more detail on that below). The underemployment rate, which...

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No correlation between top tax rates and growth rates

In a piece in WaPo today, I note in passing that there’s no persistent correlation between top tax rates and growth rates across the US time series, nor in oft-cited international data from Saez et al. This is widely understood among empirical public finance folks, but just in case, here are a few figures. As Krugman did the other day, I’m using top marginal income tax rates and 10-year, annualized growth rates of real GDP per capita. First, as Paul’s figure suggests, here’s a scatterplot...

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There’s heightened nervousness about the next recession and there are signs pointing in both directions.

I can’t turn around without seeing or hearing people worrying more about the next recession. Google Trends: Web search for “next recession” Source: Google Trends My peeps at the Indicator have a nice podcast on the topic. The WSJ points out that more than half of economists they surveyed expect a downturn by 2020, which, in case you live under a rock, the article helpfully notes is an election year. The reasons for the heightened anxiety are:–Slower global growth, particularly in China (also...

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Blanchard on public debt and interest rates; also: thanks, MMTers!

There’s a deservedly nice bit of buzz about a new paper by tony economist Olivier Blanchard. My WaPo piece today takes you through the argument, along with a heavy dose of my own interpretation, one familiar to OTE readers. “The key points are disarmingly simple, and they’re ones I have written about before in this column. Part one is this: When a country’s growth rate is higher than the interest rate on its debt, the fiscal costs of sustaining its debt levels are somewhere between zero and...

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Links referenced in a recent talk

I recently spoke to members of Congress and referenced a number of pieces. Here are the links to those pieces. What are some ideas for lowering the growth of health costs? See the section starting on pg. 11 of this testimony. On our lack of investment in quality, affordable pre-K, and how we’re an international outlier in that regard. Look carefully at the 2nd figure–it tells this story well. On some ideas for progressively raising revenues. Also, see this on a financial transaction tax. On...

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Payrolls up big as a strong jobs report caps a strong year for the US labor market

Well, it appears that the US jobs market didn’t get the memo that a recession is just around the corner. Payrolls rose a very strong 312,000 in December, bringing the full count of jobs added for 2018 up to 2.6 million, the strongest year for job gains since 2015. Unemployment ticked up to 3.9 percent, but largely because more people were drawn into the labor market, as the participation rate ticked up two-tenths to 63.1 percent, its highest level since early 2014, and yet another reminder...

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Testify! Diving into the weeds on debt, the spending vs. revenue problem, and “revealed preferences.”

I testified today before the House Financial Services Committee at a hearing the Republicans called “The perils of ignoring the national debt.” As I tweeted earlier today, the hearing was delayed a hour because the R’s went off to vote on a tax cut adding another $100 billion to the 10-year debt. That bill is unlikely to get very far in the Senate, but it does raise a somewhat existential question about the urgency of all this hand-wringing about the debt. Here’s my testimony; see the intro...

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Blog repair…and a request for questions.

I’ve been remiss in keeping up with this blog. While I still post here–especially stuff that’s too technical to go elsewhere and my write-up of the monthly jobs numbers–I’ve taken to posting most weekly takes on this or that to my PostEverything WaPo column. In the old days, however, I used to post a link here to those posts, often with an extra comment or two. Here’s a brief attempt to update: —This one’s more political than usual: I pushback on Frank Bruni’s NYT oped arguing that my former...

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Nick Hanauer’s Progressive Labor Standards: A bold idea to do more than just repair the damage.

According to Wikipedia, Nick Hanauer is “an American entrepreneur and venture capitalist.” True, but very incomplete. Hanauer is also a prominent progressive thinker, advocate, funder, and writer. I’ll get to the purpose of this post in a moment (to amplify a new piece out today in the journal Democracy) but I’ve long appreciated Hanauer’s ability to frame economic problems and solutions in ways that both make common sense and point the way forward toward bolder policies than many of us tend...

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Another solid jobs report, even with a slightly slower trend in payrolls

Payrolls were up 155,000 last month, and the unemployment rate held steady at 3.7 percent, close to a 50-year low. Hourly wages were up by 3.1 percent over the past year, the same rate as last month and tied for a cyclical high. Though another in a string of solid job reports, the pace of job gains downshifted a bit compared to last month’s report, average weekly hours ticked down slightly, and both the job and wage numbers came in below market expectations. That said, monthly noise, weather...

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