Economy

The latest report on weekly claims for unemployment insurance was released today showing 221,000 new claims. That takes the 4-week average to 222,250, which compares favourably to the year ago figure of 241,250. Some comments below I…

Note: This post first appeared on Patreon on 30 May 2018 After I wrote the last post, Kent Willard made a really good comment about service sector jobs versus goods-producing jobs that I want to expand upon. He said "there's a growing…

The lower the headline unemployment rate number goes, the more likely the Fed is to guide to two rate hikes in 2018.

In December 2017 the US federal corporate tax rate on profits over $10 million was reduced from 35% to 21%. This column examines the plausibility of the Council of Economic Advisers’ estimates of how a cut in the corporate profit tax rate…

I want to make the case for thinking about the next recession now. And I lot of this goes back to what I wrote last November about now being the most dangerous period in the business cycle. Here's the basic framing.

There are two ways to explain persistently high corporate profit margins. One interpretation is about inequity, and implicitly about corporatism masquerading as liberty. And the other is about network effects creating an age of winner take…

Noah Smith notes that wages aren’t the only way Americans make money. Increasingly, income comes via nonwage compensation and government transfers.

As good as the headline unemployment rate appears to be, we should worry that wage growth for the majority of Americans remains weak. The Federal Reserve, acting on the headline rate, will likely make a significant policy error and raise…

Job growth has now begun a slight re-acceleration. If this trend holds, the unemployment rate will drop into the mid 3% range and the Fed will move to a fourth rate hike. The mix of continued job growth, tightening monetary policy, and late…

At least initially, rate increases can be procyclical. Moreover, in this particular cycle, fiscal and regulatory policy are acting procyclically too. That means you need a lot of rate hikes to get a big anti-cyclical effect.