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Labor Force

Will the Fed Cause Another Recession?

The Fed raised the Federal Funds Rate by 25 basis points (a quarter of a percentage point) to 1.0%.  This is the anchor rate on the yield curve, and, most other rates respond to it, with shorter rates today responding more than longer rates.  It appears from their communications that they intend to hike rates several more times over the next 12-18 months. While I don’t see a recession over …Read More

Why Helicopter Money and Unconventional Monetary Policies Won’t Help the Economy

The equity markets continue to flirt with record highs while the yields on fixed income instruments are at or near all-time historic lows.  Generally, those two market movements are not compatible.  Everyone feels a high level of anxiety about the economic future.  Ben Bernanke visited the Bank of Japan in early July to help them set up a new experimental monetary policy dubbed “helicopter money.”  And we are living in …Read More

Rising wages: Is Wal-Mart a precursor?

Originally published on Reno Gazette Journal’s website, http://www.rgj.com/story/money/business/2015/03/06/rising-wages-wal-mart-precursor/24537471/ For the past 18 months, the labor markets have been telling us to be bullish on the U.S. economy as the healing in that market precipitated economic strength. Those who could read those signals had a significant time advantage in the markets, as those signs emerged months ahead of the now-official view of the Fed that the labor markets are healing. In …Read More

Outlook for 2015: First Half U.S. Growth Accelerates

            In 2013’s end of year missive, we commented that 2014 would be an up-beat year for the U.S. economy, and it looked like that could last through 2015. Now, as we near the last days of 2014, we see an even stronger underlying economy for 2015 and believe that it will last through 2016 barring any exogenous shocks. We have included a table of economic indicators which we will …Read More

Why “Average” Wage Rates May Be Misleading

Much has been made of Fed Chair Janet Yellen’s stance that the labor market still has a lot of slack. That message remained in the Fed’s September communique. As part of her justification, the Chairwoman points to the fact that the average hourly wage rate has remained at or near the “official” rate of inflation, and, therefore, real wage rates have been stagnant. The September jobs report, while showing considerable …Read More