Thursday , February 21 2019
Home / Jared Bernstein: On the economy (page 5)

Jared Bernstein: On the economy

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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Lnyx, potential auto tariffs, yield curves and recession

Happy 4th. Now, down to biz. Over at WaPo, I reflect on how to get back to WITT (we’re-in-this-together), away from YOYO, and note how the Democratic Socialists are plowing similar ground. Next, I see where the president is thinking about imposing 20% tariffs on imported cars and car parts. Oy. Once again, I don’t see how this helps anyone, including American car producers and especially American workers/consumers. Apparently, his motivation was seeing too many foreign cars on our streets....

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Musical interlude: Mozart at his best

I just stumbled on this performance of what may be my favorite Mozart concerto. It’s the one for violin and viola, overflowing with amazing melodies, counterpoint, and interplay between the soloists. And this performance is as good as it gets, not just the soloists* but the orchestra, which provides perfect accompaniment–note their dynamics, going from a whisper to a roar, while never stepping on the soloists toes–without, you’ll notice, a conductor. Plus, they’re standing up the whole time...

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A quick note on the rise of dollar il-liquidity. Worrisome? Not worrisome??

Between the fiscal stimulus, the Fed, and the tax cuts (which are, of course, a big source of the stimulus), the global supply of dollars is getting squeezed, which is, according to various reports, pressuring some emerging market economies (EMs). How seriously should we take this and what might its impact be on the US economy? To telegraph my conclusion, I suspect these developments will lead to higher US interest rates and a stronger dollar than would otherwise occur. The stronger dollar,...

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A few lynx

Over at WaPo, I provide the anatomy of a revealing moment from Federal Reserve Chair Jay Powell’s press conference last week. A tough question landed him in the cul-de-sac one finds oneself in when one tries to defend a specific unemployment rate as the “natural rate.” In fact, the question asked of Powell was, “how is the Fed going to get from 3.5% to 4.5% unemployment?” To which I add: “and why would they want to?!” In terms of estimating the “natural rate,” I’m still touting this figure...

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Q&A on that crazy G7 meeitng: Trump, Trade, Tariffs, and Trouble

Trump at the G7 meeting? What could go wrong? Apparently, his Orangeness gave the leaders of the free world a heavy dose of peak Trump this Saturday at the G7 meeting. Basically, nothing newsworthy is supposed to happen at these meetings. The leaders spend a day or two together discussing mutual interests, and at the end of the summit, they release an anodyne statement renewing their vows to work together to promote cooperation and trade. Not this time. The summit was quickly tagged the G-6...

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Catching up with the lynx

Over a WaPo today: As you’d expect, I’m not at all happy to see the rollbacks in financial market regulations. But, given our ability to willfully forget the last financial meltdown, they’re far from unexpected. One of my key points here is that the powerful, rich finance lobby faces little in terms of countervailing pushback. That is, this isn’t good D’s outnumbered by bad R’s. Note also recommendation for a small tax on financial transactions. I plan to amp that up in coming weeks. The...

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May Jobs: Another solid month; Lowest black unemployment rate on record; Wage growth ticks up for mid-wage workers.

Payrolls rose 223,000 last month, beating expectations of 190,000, and the unemployment rate ticked down to 3.8 percent, its lowest level since April 2000, and before that, a level much more commonly seen in the 1960s. (At 3.75 percent, the jobless rate just missed falling two-tenths). [Before the release, President Trump tweeted that he was looking forward to the jobs numbers. Since certain top officials, including the president, see the report on Thursday night, his tweet telegraphed the...

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The question of full employment and music from room 608

Over at WaPo, I revisit the argument that a) since economists can’t tell if we’re truly at full capacity in the job market, b) there’s not much in the way and price and wage pressures, and c) the prime-age employment rate is not apparently topping out, we should assume there’s still economic room-to-run. I’m on the road and in room 608, which is why I can’t get this old, uptempo jam by Horace Silver out of my head. If you let it run on YouTube, next thing you know, you’ll be hanging out with...

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