The U.S. labor market is showing signs of optimism that might best be described as hedging its bets—confident that the vaccination program will eventually allow for the reemergence of the normal workplace, but recognizing that it may not take just a snap of the fingers to get there. The surge in job openings—which hit a two-year high—and the elevated ... READ MORE >
Joe Brusuelas
CHART OF THE DAY: Estimating unemployment during the pandemic
Friday’s headline U3 unemployment rate of 6.0% for February is likely an undercount of out-of-work people in the United States, not by design, but by the peculiar circumstances of the pandemic. While the topline change in net employment after adding in back revisions was 1.072 million, it will likely be later in 2022 before the economy returns to full ... READ MORE >
March jobs report blows past expectations with best still to come
An American economy about to regain its swagger after a year of pandemic-induced crisis was on full display in the March jobs report. The labor market added 916,000 new jobs and the unemployment rate declined to 6% from 6.2%. After adding in the 156,000-job upward revision to the January and February reports, the net change was an increase of 1.072 million ... READ MORE >
Government transfers fuel robust income and spending: Incomes ex-transfers illustrate need for additional stimulus
Government transfers from the end-of-year $908 billion fiscal aid package were the primary catalyst for the 10% increase in income and the 2.4% jump in spending, a robust kickoff to what is going to be one of the more memorable years in economic activity in decades. The personal savings rate increased to 20% in January from 13.7% in December. The amount of ... READ MORE >
CHART OF THE DAY: The rising cost of eating at home and the lower cost of driving
The overall cost of living remains subdued, with the Consumer Price Index rising 1.4% in January. Over the past six months, the headline inflation rate has remained muted and stands below the Federal Reserve’s 2% implicit target necessary for increased demand and sustainable growth. With an economy still operating at 20% capacity and 9.8 million jobs short ... READ MORE >
CHART OF THE DAY: Official unemployment number doesn’t tell full pandemic story
Friday’s headline January U3 (official) unemployment rate of 6.3% almost certainly undercounts the number of out-of-work people in the United States, not by design, but by the peculiar circumstances of the pandemic. Our estimate implies a real unemployment rate of 7.5%, which we acknowledge could be much higher -- closer to 8.5%. An analysis of the ... READ MORE >
Bank of England policy rate decision: reduced economic outlook, negative interest rate policy not imminent
Reduced growth amid a more optimistic outlook later this year is the primary takeaway from the February rate decision by the Bank of England Monetary Policy Committee. This implies a slower pace of growth near 5% in 2021 followed by a rapid rebound closer to 7% in 2022. Moreover, the central bank does not intend to tighten policy until there is significant ... READ MORE >
Chart of the Day: A stagnant minimum wage for society’s essential working people
Although some cities and states have imposed higher minimum wages, the federal minimum wage has not kept up with the times. Fifty years ago, people working at the minimum wage were receiving a salary that was 50% of average hourly earnings. Today, the $7.25 per hour minimum wage is 29% of the $25 average hourly earnings of hourly workers. It is highly likely ... READ MORE >
The pandemic, health care access and the economy
The outbreak of the novel coronavirus has highlighted the massive health care access inequalities that continue to plague the richest country in the world. The coronavirus is attacking both rich and poor, but it is most destructive among the poor who lack access to a healthy living environment. It’s difficult to think that the current health care status quo ... READ MORE >
US June personal income and spending: Difficult days for the American household
The American household finds itself under extreme duress as loss of income and jobs caused by the pandemic is on vivid display inside the June U.S. Personal Income and Spending Report. Despite a robust increase in spending, based on income dynamics that are in play during the pandemic, it is quite clear that this is not sustainable and represents the zenith ... READ MORE >