Calculated Risk
Read the Bill McBride interview.
Jobs
The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .
Click on the image to get a bigger version.
June Payroll Employment
The slowndown in employment growth over the past few months is starting to become more apparent in the graph below.
Click on the image to get a bigger version.
Focus on the Problem
U.S. payroll employment peaked at 132.5 million jobs in February 2001. For April 2012, U.S. payroll employment had reached 133.0 million jobs, marking the third month in a row above the February 2001 level.
Click on the image to get a bigger version.
Graph-of-the-Year Candidates
Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?
Brad DeLong favors the U.S. gdp gap.
Finally, it's hard to argue against the payroll employment graph below (straight from FRED) and the comparison across recessions (courtesy of Calculated Risk).
Looking Up At 2001
In February 2001, U.S. payroll employment peaked at 132.5 million. The November 2011 figure of 131.7 million still falls 800,000 jobs short of the earlier peak.
Click on the chart for a larger version.
Remember M1?
Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?
Click on the chart for a larger version.
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Macro and Other Market Musings
David Beckworth.
May 17, 2013, 7:25 pm, 1095114
Narayana Kocherlakota, President of the Minneapolis Fed, recently
participated in a panel where he discussed the key challenges facing central banks. He viewed the safe asset shortage and the related inability of the Fed to push the actual market rate down to its natural interest rate level ...
May 16, 2013, 11:25 pm, 1094573
One of the big challenges facing the global economy is the shortage of safe assets. These are the highly liquid, information-insensitive assets that function as money. The financial crisis raised the demand for these safe assets just as many of them were disappearing. This cyclically-driven safe asset shortage ...
May 14, 2013, 3:25 pm, 1092963
It almost seems unfair, as if the evidenced is biased toward Market Monetarist's views. First it was the better-than-expected
employment report last week and now it is the forecast-beating
retail sales report. These developments should not be happening, especially now with sequestration, if the fiscal multiplier ...
May 12, 2013, 7:25 pm, 1091838
Lars Christensen
nails it on the confusion surrounding Abenomics:
There has been a lot of focus on the fact that USD/JPY has now broken
above 100 and that the slide in ...
May 10, 2013, 5:24 pm, 1091318
I recently lamented the Fed's
ongoing dereliction of duty as seen in the sustained declined of households' expected nominal income growth:
In that post, I noted this observed ...
May 5, 2013, 11:25 pm, 1087810
On Friday I
discussed the cyclically-adjusted U.S. budget deficit and asked any Keynesian to reconcile its decline with the steady growth of aggregate demand. Robert Waldman graciously
replied, but he really didn't answer my question. His response focused on the pace of the recovery and changes ...
May 3, 2013, 9:25 pm, 1087331
Despite my
enthusiasm about what today's employment report means, Josh Barro
says it does not vindicate the Market Monetarist's view. Moreover, he believes we probably should not expect our view to ever be fully vindicated for political economy reasons:
Market monetarism, as advanced
by ...
May 3, 2013, 5:25 pm, 1087214
The April employment report came out today and is
better than expected.
The number of new jobs exceeded the median forecast, the previous two
months job numbers were revised upward, and the unemployment rate fell
to 7.5%. This report is not what one would expect if fiscal ...
April 30, 2013, 5:24 pm, 1084927
As much I criticize the Fed for its shortcomings, it pales in comparison to the failures of the ECB.
Under its watch, aggregate nominal income and broad money growth has faltered in the Eurozone. This, in turn, has created an economic crisis. Note that causality runs from ...
April 29, 2013, 3:24 am, 1083804
Mike Konczal has a new
article where he claims there is now a great natural experiment unfolding in the U.S. economy, allegedly one that Ramesh Ponnuru and I
proposed back in 2011:
We rarely get to see a major, nationwide economic experiment at work, ...
