Unemployment

By Frances Coppola This, my third post on Latvia, looks at its recovery from the 2008-9 recession. Latvia is often held up as the "poster child" for harsh austerity measures as the means of returning to strong economic growth. In…

Growth estimates for the full year are now diving to under 3% due to weakness in early Q2 data. Meanwhile the Federal Reserve is having difficulty deciphering what this means for interest rate policy. For now, however, policy divergence,…

Yesterday, the big news for US data was poor post-winter retail sales. I believe US consumption growth still supports a 2 or even 3%ish level of GDP growth. It is actually elsewhere where the US economy has shifted down: inventories,…

The US economy’s upswing over the last six years has been predicated on credit like the cycle before it because wage growth has been lacklustre. I want to describe where credit activity has created a lift in consumer spending and in capital…

Two notable events regarding stock and bond markets have occurred in the last twenty-four hours. One is comments from Fed Chair Janet Yellen that suggest she sees U.S. equity prices as elevated. The second is a wide-spread backup in yields…

I have mentioned 1994 as a benign comparison for the US economy of 2015 as opposed to the 1937 comparison Ray Dalio made recently. Having looked at reasonable worst case scenarios with 1997 Japan as a model, I want to look at upside…

As I indicated yesterday, if the Fed is narrowly focused on the long-term path of inflation and arriving at a NAIRU-style full employment threshold, the data are relatively categorical that liftoff must begin this summer. However, I believe…

The biggest question facing the Federal reserve is whether their data dependency means looking through weak Q1 data and raising rates this summer anyway. Given the key elements of the Fed’s reaction function as I laid them out yesterday,…

The title of this post is what the Fed wants us to believe. It wants us to believe that it is prepared to raise interest rates this year but that it will increase them slowly by assessing the data, hiking once and re-assessing, and then…

The biggest takeaway from the latest Federal Reserve Open Market Committee meeting was the reduction in the ‘normal’ rate of unemployment from the 5.2-5.5% range to a 5.0-5.2% range. While the Fed did remove its ‘patient’ language regarding…