The unemployment rate in the United States, taken out to three decimal points, now stands at 3.458%, the lowest in 50 years and one that many of us will most likely not observe again in our career arcs. Perhaps more important, the labor market has reached a milestone: a general return to pre-pandemic ... READ MORE >
Joseph Brusuelas
U.S. July employment report: A recession is not yet at hand
Economies in recession do not produce 528,000 jobs in a given month and have 3.5% unemployment rates. Since January, total employment has increased by 3.3 million jobs and the unemployment rate has declined from 4% to 3.5%. With such a robust labor market, claims that the economy is in recession fall ... READ MORE >
Labor force dynamics: 60,000 jobs per month are needed to keep the jobless rate near 4.4%
Long-run changes in the labor force have slowed its growth and are likely to result in a shortage of workers even if the economy falls into recession. Between 2008 and 2020, the labor force grew at an average rate of 0.06%. Assuming that does not slow further—it very well could because of ... READ MORE >
Can a price cap on Russian oil work?
The United States is urging its trade partners to adopt a novel proposal that would put a cap on the price of Russian oil during a time of shortcomings in global production. It’s a creative idea, but it carries risks and could result in another surge in oil prices. Middle market firms need to ... READ MORE >
U.S. June CPI: Persistent top-line inflation hits 9.1%
The past few years have been characterized by a series of economic shocks that have wreaked havoc with just about every area of the American economy. The most recent set of energy shocks has sent the top-line consumer price index to 9.1%, a four decade high, on the back of an 11.2% increase in ... READ MORE >
U.S. employment report for June indicates no recession now
An American economy in free fall does not tend to produce 372,000 jobs in any given month, as the June employment report showed on Friday. The data released by the Labor Department strongly implied that the economy is not in recession, which is in line with our base case that the economy will ... READ MORE >
U.S. June jobs preview: Slower hiring in rate-sensitive industries
We expect the June U.S. employment report to show a total gain of 225,000 jobs, with risk of a stronger pace of hiring and an increase in the unemployment rate to 3.7%. Given the Federal Reserve’s campaign to increase the policy rate that has reshaped economic expectations, we expect a reduced pace of ... READ MORE >
Preparing for a tsunami of imported goods
The recent reopening of China’s factory floors and the easing of its supply chain bottlenecks have prompted discussion about the ability of the U.S. supply chain to absorb what will be a tsunami of imported goods. With the value of the dollar rising, which lowers the cost of imported goods, demand for ... READ MORE >
The American housing deficit and what it takes to close it
Over the past 15 years, the United States has not built enough houses to keep up with growing demand. The problem intensified during the pandemic as demand skyrocketed because of the shift to working from home and historically low mortgage rates encouraged this move. We estimate that at the end of ... READ MORE >
Fuel oil prices reach a tipping point
American households are consuming less gasoline compared to this time last year as fuel costs continue their relentless rise. Now, with the traditional summer driving season underway, these costs have reached a tipping point, forcing many households to reduce their spending on necessities and ... READ MORE >