Economics Roundtable

May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

Click on the image to get a bigger version.


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.

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.

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.


The Economics Roundtable is sponsored by EconModel.

The Classic Economic Models cover micro, macro, and financial markets.

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- Recent Entries

November 26, 2015, 2:44 am, 1582317
Some scholars view capital inflows as contractionary, but many policymakers view them as expansionary. Evidence supports the policymakers. This column introduces an analytic framework that knits together the two views. For a given policy rate, bond inflows lead to currency appreciation and are contractionary, while non-bond inflows lead to an ...

November 26, 2015, 2:44 am, 1582315
Seven years after its crisis, Iceland has staged an economic recovery. This column suggests that despite its overall success, the current economic situation in Iceland is not devoid of problems. Insufficient competition in certain areas keeps real wages lower in Iceland compared to other Nordic countries. The current government in ...

November 26, 2015, 2:44 am, 1582316
Not much is known about the drivers of gender diversity in monetary policy committees. This column presents new research suggesting that gender preferences may be endogenous with respect to the overall structural and institutional settings. Higher female representation is associated with higher levels of central bank independence and lower involvement ...

November 26, 2015, 2:44 am, 1582314
Interest rates have been extremely low since the Global Crisis. This column surveys the recent debate over whether they will remain low, or return to normal. While an unequivocal answer is not possible, the evidence suggests a significant decline in average real rates – perhaps to as low as 1%.

November 26, 2015, 2:04 am, 1582313

1.Shahab Ahmed, What is Islam?: The Importance of Being Islamic.  Too much hermeneutics for my taste, but intelligent and interesting throughout.  The authors downplays the prescriptive side of Islam and plays up the experiential and polyvalent aspects of the religion.  If you are reading books in this area, ...

November 25, 2015, 11:03 pm, 1582286

Food for thought over the long weekend.

Why Tighten?

I hear a lot about why, despite (by some accounts) a measurable output gap, and low inflation, we need to tighten because of e.g., an incipient housing bubble (or some other unidentified asset bubble). Reuven Glick and Kevin J. Lansing ...

November 25, 2015, 10:04 pm, 1582284

I can’t say I understand this FT article so well, but I suppose that is the point.  Which are two groups/persons implicated in buying oil from ISIS, or otherwise enabling such trades to take place?

First, Syria.  Or is that “Syria.”

Second, the head of the world chess federation, namely ...

November 25, 2015, 9:03 pm, 1582263

Early thanks giving to Jill Schlesinger:

Recognizing those who have improved our financial lives: ... I am often asked about which financial blogs that I use to augment the multitude of publications that I need to do my job. I am thankful for the terrific work of Bill McBride of ...

November 25, 2015, 9:03 pm, 1582262
Towards the end of each year I collect some housing forecasts for the following year, and it looks like analysts are optimistic for 2016 (many more forecasts will be added).

First a review of the previous three years ...

Here is a summary of forecasts for 2015. ...

November 25, 2015, 6:04 pm, 1582237
(November 25, 2015 04:40 PM, by Scott Sumner) Benny Lava sent me an article discussing the German opposition to Mario Draghi's proposed monetary stimulus: But on Monday, Lautenschlaeger broke with normal etiquette to publicly criticize this stance, saying that ever looser monetary policy had its limits and that... (0 COMMENTS)

November 25, 2015, 6:04 pm, 1582236
(Don Boudreaux)

Here’s a letter to a Facebook commenter:

Mr. Craig Bolton

Mr. Bolton:

If I read you correctly you ...

November 25, 2015, 5:23 pm, 1582235

Readers Question: Why are there government spending cuts at a time of rising government spending?

One of the confusing elements of ‘austerity’ and government spending cuts is that from one perspective, we can have a rise in total government spending – but some areas of government spending see cuts.

November 25, 2015, 5:23 pm, 1582234

Since 2010, the UK economy has been dominated by spending cuts and a the desire to run a budget surplus as soon as possible. In the political world, the government deficit is often portrayed as the source of many economic ills, and eliminating the deficit one of the highest macro ...

November 25, 2015, 5:03 pm, 1582173
From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for October 2015. In the past month, the indexes increased in 43 states, decreased in six, and remained stable in one, for a one-month diffusion index of 74. Over ...

November 25, 2015, 3:33 pm, 1582168
Today's Personal Income and Outlays shows consumer spending once again on the "soft side" despite solid income growth.

Income was in-line with expectations of a 0.4% gain. However, spending came in with an anemic 0.1% gain month-over-month. The Econoday Consensus Estimate for consumer spending was 0.3%, in ...

November 25, 2015, 3:33 pm, 1582167
Fourth Quarter GDPNow Forecast Sinks to 1.8%

Following today's personal income report in which consumer spending rose only 0.1% month-over-month, the Atlanta Fed GDPNow Forecast for fourth quarter declined by 0.5 percent to 1.8 percent.

"The GDPNow model ...

November 25, 2015, 3:03 pm, 1582106
Just under 66% of recent high-school grads were enrolled in two- or four-year college programs in 2013, down from 68.6% in 2008, according to new research. DAVID ...

November 25, 2015, 3:03 pm, 1582105
It has become an annual Thanksgiving ritual for news organizations to post Facebook-friendly explainers, aimed at millennials, on how to deal with ignorant uncles and the things they say about politics and Mexico and the economy. To help level the playing field, here are some key facts those aunts and ...

November 25, 2015, 3:03 pm, 1582104

John Cassidy (this was in today's links):

The Pfizer–Allergan Merger Is a Disgrace: Inan announcement on Monday morning, Pfizer, the big drug company, whose headquarters are on East 42nd Street, in Manhattan, said that it is merging with one of its competitors, Allergan PLC....

It is widely acknowledged that the ...

November 25, 2015, 3:03 pm, 1582103

Jonathan Rothwell at Brookings:

Drug offenders in American prisons: The critical distinction between stock and flow: There is now widespread, bipartisan agreement that mass incarceration is a huge problem in the United States. The rates and levels of imprisonment are destroying families and communities, and widening opportunity gaps—especially in ...

November 25, 2015, 3:03 pm, 1582102
The new home sales report for October was slightly below expectations, however sales for July, August and September were revised down. Sales were up 4.9% year-over-year in October (SA).

Earlier: New Home Sales increased to 495,000 Annual Rate in October.

Even though the October report was somewhat ...

November 25, 2015, 2:34 pm, 1582101

On Sunday’sLast Week Tonight, John Oliver hit on an issue that I’ve talked about before, getting rid of the penny:

Why is the penny still a thing?

As John Oliver pointed out on his HBO show “Last ...

November 25, 2015, 2:04 pm, 1582096

1. Book hotel in Japan.  That is book used as a noun, not a verb.  And good photos of Porto, Portugal.  Zach Lowe: how small can the NBA go?

2. The world’s largest cloning factory, guess where?  Yesterday my paper copy of the ...

November 25, 2015, 1:34 pm, 1582094
Obamacare/ ACA was in the news last week. Some relevant summaries, and comment below.

United Health pulling out of the Obamacare exchange market

UnitedHealth reported one problem after another: An expensive risk pool that lacks the younger and healthier consumers who are supposed to buy overpriced plans ...

November 25, 2015, 12:04 pm, 1582033

The latest issue of the American Journal of Transplantation has an excellent and comprehensive cost-benefit analysis of paying kidney donors by Held, McCormick, Ojo, and Roberts. Earlier, Becker and Elias estimated that a payment of $15,000 per living donor would be sufficient to ...

November 25, 2015, 12:04 pm, 1582032
(November 25, 2015 12:58 PM, by David Henderson) The Fed does set the federal-funds rate--the overnight interest banks charge to lend to each other--and surely affects the timing of rate changes, but not the longer-run level. This is the second sentence of an op/ed in this morning's Wall... (2 COMMENTS)

November 25, 2015, 12:04 pm, 1582031
(Don Boudreaux)

Several people have asked me to weigh in on Noah Smith’s recent essay entitled ...

November 25, 2015, 11:33 am, 1582028
I have been following the debate at my alma mater about Woodrow Wilson. Here are two good pieces for and against removing his name from its current place of prominence.

November 25, 2015, 11:33 am, 1582027
Starting on November 30th, negotiation teams from all over the world will go to Paris. Many academics will be there but you won't see me. I"ll be at sunny USC. The final treaty won't have a hard carbon cap with enforcement nor will there be a global carbon tax. ...

November 25, 2015, 11:03 am, 1581963
House Financial Services Committee Chairman Jeb Hensarling (R, Texas), shown at a November hearing, sponsored the bill that would require the Fed to set interest rates according to a ...

November 25, 2015, 11:03 am, 1581962
The Census Bureau reports New Home Sales in October were at a seasonally adjusted annual rate (SAAR) of 495 thousand.

The previous three months were revised down by a total of 40 thousand (SAAR).

"SSales of new single-family houses in October 2015 were at a seasonally adjusted ...

November 25, 2015, 10:34 am, 1581961
Consumer spending in the US continued to rise at a snail’s pace, rising 0.1% in October, according to this morning’s release from the Bureau of Economic Analysis. That’s the second month in a row for 0.1% growth, marking the weakest two-month period for consumption in eight months. Economists were expecting ...

November 25, 2015, 10:04 am, 1581952
There are always surprises in budgets, autumn statements and spending reviews and this one was no exception. There will be much more to uncover in the coming days but three initials things - all of them to a greater or...

November 25, 2015, 10:04 am, 1581951

November 25, 2015, 9:33 am, 1581948

November 25, 2015, 9:03 am, 1581887

Each year, the Tax Foundation honors state legislators, executives, and other individuals with its Outstanding Achievement in State Tax Reform award. As the name suggests, the honoree's accomplishments must be (1) outstanding, (2) an achievement (not merely a proposal) during 2015, and (3) reform taxes to make them more simple, more neutral, more transparent, more stable, and ...

November 25, 2015, 9:03 am, 1581886
Comics characters Snoopy, left, and Charlie Brown are displayed in a holiday window at Macy’s in New York this week. Department stores including Nordstrom Inc. and Macy’s Inc. warned this month of an ...

November 25, 2015, 9:03 am, 1581885

Here at Political Calculations, we sometimes live up to the "political" part of our name by taking on, shall we say, delicate topics, where by delicate we occationally mean "really personal".

And what can be more personal than addressing the proverbial turkey on the ...

November 25, 2015, 9:03 am, 1581884
The DOL reported:

In the week ending November 21, the advance figure for seasonally adjusted initial claims was 260,000, a decrease of 12,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 271,000 to 272,000. The 4-week moving average was 271,000, unchanged ...

November 25, 2015, 9:03 am, 1581883
The BEA released the Personal Income and Outlays report for October:

Personal income increased $68.1 billion, or 0.4 percent ... in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $15.2 billion, or 0.1 percent.
Real PCE -- PCE adjusted to remove ...

November 25, 2015, 8:34 am, 1581882
Momentum has received a lot of attention in the asset-pricing literature over the past several decades, and for good reason. Trending behavior is a staple in markets. In contrast with other pricing “anomalies”, short-term return persistence—positive and negative—is a robust factor across asset classes. The fact that momentum is deployed ...

November 25, 2015, 8:04 am, 1581881
(Don Boudreaux)

… is from page 492 of Armen Alchian‘s 1975 essay “An Introduction to Confusion,” as reprinted in The Collected ...

November 25, 2015, 7:34 am, 1581878

A bunch of great-looking but probably not too good for you recipes. Example: "Bacon Fried Mozzarella Sticks".

November 25, 2015, 7:34 am, 1581877

Long Vanity Fair piece especially interesting for fans of the Man in the White Suit.

November 25, 2015, 7:34 am, 1581876

"If history is the gauge, then we should be preparing for a record hurricane season in the summerand fall of 2016 . . ."

November 25, 2015, 7:03 am, 1581851
From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Surve

Mortgage applications decreased 3.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 20, 2015. The previous week’s results included an adjustment for ...

November 25, 2015, 6:35 am, 1581850
● US Q3 GDP growth revised up to 2.1% | Reuters ● Consumer confidence falls to 14-mo low in Nov | MarketWatch ● Richmond Fed: “manufacturing activity slowed” in November | Richmond Fed ● US Q3 corporate profits fall at steepest rate since recession | WSJ ● US home prices ...

November 25, 2015, 5:34 am, 1581847

Something the world has needed.

November 25, 2015, 5:03 am, 1581798

November 25, 2015, 4:05 am, 1581797

Greg Ip presented his new book Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe at Mercatus/GMU, with an emphasis on financial crises and a bit on forest fires too.  I was the moderator, and the commentators were Alex J. Pollock and Jared Bernstein.

The video ...

November 25, 2015, 3:34 am, 1581794
Tomorrow is Thanksgiving. Black and Blue Friday will follow, putting U.S. Consumers and Stores in Face Off Over Discounts.

A Reuters/Ipsos survey found more people planned to cut holiday spending than increase in every category surveyed: clothing, jewelry, electronics, food and toys, and that 46 percent felt ...

November 25, 2015, 12:44 am, 1581702
The British government has placed productivity at the centre of its economic growth agenda. Yet, despite the economy recovering to pre-Crisis levels, productivity has slowed. This column argues that we mustn’t lose sight of investing in productivity as a sure-fire and long-term guard against slow growth, outlining a range of ...

November 25, 2015, 12:44 am, 1581701
Central banks around the world have been shouldering ever-increasing policy burdens beyond their core mandate of stabilising prices. This column considers the social welfare implications when central banks take on additional mandates that are usually the domain of other policymakers. Additional mandates are shown to worsen trade-offs faced by the ...

November 25, 2015, 12:34 am, 1581700

“Freedom, ...

November 25, 2015, 12:04 am, 1581699

My thoughts on this topic are extremely tentative, hypothetical I would say, but I’ve seen so much other bad commentary I thought I would lay out a possible “model” for what is going on.  I offer this with what I consider to be more than just caveats and qualifications, if ...