Is It Too Early To Declare “Mission Accomplished” on Inflation?
Personal income and consumer spending both rose at a rate of 0.7% in December, well above the expected 0.5% pace. Incomes were boosted by robust wage growth and rising asset returns, which have expanded Americans’ real disposable personal income—that is, income after taxes and inflation—4.2% over the past year.
Reaction: The Job Market Slowed But Dodged a Recession in 2023
Friday’s Jobs Report was mixed, with solid job gains (+216K) and wage growth (4.1% over the year) in the establishment survey, but weak employment growth (just +72K) and participation-related figures in the household survey. Factoring in downward revisions to the prior months’ figures, the 3-month average job gain was 165K, right in line with the 2019 average, suggesting that the labor market has come back to pre-pandemic normal.
Latest JOLTS Report Shows Slower Hiring and Turnover
Hires and quits slowed meaningfully in November, a sign of weaker employer and employee confidence.
Why 2024 Will Unlock the Second “Roaring Twenties”
The 2020s got off to a rocky start. In 2020, the U.S. suffered job losses of unprecedented magnitude as a result of the Covid-19 pandemic. In 2021, thanks to the end of the stay-at-home mandates, and a population flush with stimulus money, the economy recovered so rapidly that it overheated, creating an acute shortage of labor and rapid inflation. In 2022, the Fed responded to 40-year high inflation with a steady diet of interest rate increases, the fastest interest-rate increase cycle on record. In 2023, both the labor market and inflation have cooled, setting us up for what many economists believed was a low-probability scenario, “the soft landing.”
Inflation Continues to Cool, Ever So Gradually
In November, the CPI rose 0.1% over the month, or 3.1% over the year, and core CPI rose .3% over the month, or 4.0% over the year. Both came in line with expectations.
The Jobs Market is Solid, but Continues to Show Signs of Gradual Deceleration
The November Jobs Report was largely consistent with what economists were expecting.
JOLTS Confirms the Labor Market is Slackening
Signs of the labor market slackening raise the odds that no further interest rate increases will be needed.
Americans Continue to Enjoy Real Wage Gains as Inflation Slows
The consumer price index came in better than expected this morning, showing continued progress in the fight against inflation.
The Post-Pandemic Labor Market Rollercoaster is Over
After the labor market rollercoaster of 2020 to 2022, the labor market has eased back into its usual rhythms—so much so that the JOLTS report is no longer a headline-grabber and has once again become a snooze fest.
The Pandemic-Related Public-Private Sector Pay Gap is Finally Narrowing
According to today’s Employment Cost Index report, wage disinflation slowed, and so did real wage growth. Private sector wages and salaries rose 4.5% over the year, down only 0.1 percentage points from last quarter, and over-the-year real wage growth fell from 1.7% to 0.8% in Q3. Wage growth for public sector workers surged, however, after lagging behind since early in the pandemic.
Gradual Disinflation Continues, Despite a Recent Surge in Gas Prices
Topline year-over-year inflation held steady in September at 3.7%, with month-over-month inflation slowing to 0.4% from 0.6% in August, despite the recent surge in gas prices. Core inflation (which excludes energy and food) fell to 4.1% from 4.3% over the year, holding steady at 0.3% over the month.
A Blowout Jobs Report Shows Strong Job Gains Across the Board
It is hard to find any bad news in today’s jobs report. With an acceleration in job growth to 336K payrolls in September and upward revisions for the prior months, the jobs data is finally consistent with real-time estimates of third-quarter GDP growth. Together, they suggest a summertime boom.
State Employment Trends Continue to Diverge
States where employment has grown rapidly over the past year continue to outperform, and those where employment has been sluggish continue to lag behind. Three of the states with the largest employment gains since the pandemic continued to experience the fastest job growth rates.
A Solid August Jobs Report Shows the Labor Market in a Sweet Spot
According to today’s Jobs Report, the labor market overall is continuing to soar at an ideal cruising altitude—high enough to keep the unemployment rate below 4% while creating more opportunities for workers to come in off the sidelines, but low enough so as not to cause a resurgence of inflation.
The Labor Market is Back to Normal
Today’s JOLTS report largely resolves the puzzling gap between job openings and online job postings
1 in 4 States Still Haven’t Recovered the Jobs Lost in the Pandemic
Nationally, U.S. employment recovered to its pre-pandemic level last June. More than a year later, however, one in four states have yet to recover.
Inflation is Falling Across a Broadening Set of Categories
Don’t be fooled by the uptick in year-over-year inflation from 3.0% in June to 3.2% in July. Inflation is slowing, and doing so across a broader range of goods and services.
Producer Prices Have Grown Just 0.85% Over the Year, Despite Accelerating in July
Producer prices shot up during the pandemic, peaking at a level 19.16% higher than before the pandemic. Over the past year, they have largely stabilized, growing only 0.85% over the year.