Go to Top

Tag Archives

Tag Archives: labor market

Harvey & Irma: Pushing the Economy to the Tipping Point

Hurricane Harvey devastated the Houston area (and economy), and, while Irma could have been much worse, it still left significant destruction in Florida and the southeast.  What we can say for sure is that the monetary impact of Harvey alone would have been the largest natural disaster in U.S. history, and now we must add on the monetary impact of Irma.  And the hurricane season still has another month and …Read More

Waiting for Market Rationality

Equity markets have yet to recognize the fragility and softness of the underlying economy, although they do appear to be somewhat sensitive to geopolitical issues (North Korea). The incoming data continue to confirm: that the consumer has little spending capacity remaining; that inflation’s roar is nowhere to be found (except, perhaps, in hot dogs); that the detail underlying the headline employment number (209,000) show labor market deterioration; that the equity …Read More

Deflation’s Persistence Implies Yields Will Be Lower for Longer

Despite what you hear from the TV pundits, the U.S.’s second quarter ended on weakness, and there is little evidence that economic acceleration occurred.  In previous years, slow GDP growth in Q1 was followed by 3%+ in Q2.  Not this time!  The Atlanta Fed GDPNow model, which uses a lot of sentiment indicators, is all the way down to 2.4% for Q2.  I suspect that the Commerce Department’s initial GDP …Read More

On a Recession Watch

For the first time since the industrial revolution, the U.S. faces two significant growth issues: 1) a declining labor force; and 2) a job skills mismatch.  The declining labor force is demographic in nature and is occurring in every industrial economy; likely a function of the long-term success of capitalism.   The skills mismatch is a function of technological change that is so rapid that the skills of the existing labor …Read More

“Normal,” It’s Not What You Think!

Most readers remember the pre-recession days of 4% GDP growth, interest rates at levels where savers had return choices worth pursuing (e.g., the 10 year T-Note at 4%), and workers could count on annual real wage growth.  Today, many refer to this as “normal,” and there is a desire, if not a movement, to return the economy back to such a state. You can see this in the political arena.  …Read More

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