Labor Markets
How do we evaluate model choice under uncertainty as data points are still coming in? If one model implies prescriptions with direct, catastrophic welfare costs that are empirically difficult to reverse, should the consequences affect how much weight we give the model?
Labor Market Recap January 2023: The data from the January labor market show an unequivocally strong labor market. Nearly every indicator from every data source is showing strong employment against a backdrop of slowing nominal price and wage growth. Although the consensus anticipated an uptick, the unemployment rate fell to
In our previous piece in our vacancies series, we took a deep dive into Ball, Leigh and Mishra (2022), “Understanding U.S. Inflation During the COVID Era,” a paper presented at the Brookings Papers on Economic Activity Conference in September 2022. The paper, which warned that the Fed’s...
What the data tells us to expect for Friday: * Interpreting nonfarm payroll employment numbers will be messy due to the benchmark revision: The BLS folds in more comprehensive data each February on job creation. That can be especially substantial at the sectoral level and recast what the true employment trajectory
Wage growth is slowing. Job openings are increasing, unemployment is holding, and wage growth is slowing. This was supposed to be impossible–so what does it mean that it’s happening?
Wage growth slowed in Q4 faster than consensus forecasts–-at an annualized rate just over 4%. We already noted in our preview that this would be very consistent with what the other Q4 macroeconomic & wage data was signaling. The scenario poised to trigger a hawkish overreaction did not materialize.
As we await the Q4 Employment Cost Index (ECI) release tomorrow (forecasting consensus: 1.2% QoQ, 4.9% CAGR; Q3: 1.2% QoQ, 4.8% CAGR), two key points to keep in mind. 1. The Q4 Data Showed Slowing Across Many Wage and Wage-Relevant Indicators, Potentially To 4.2% annualized.
While layoffs are painful to workers, more attention needs to be paid to the threat of a rise in unemployment arising from a slowdown in hiring. In this report, we examine the important role that a fall in hiring rates plays during unemployment increases.
The Fed is arguing that inflation is driven by the cost-push impacts of wage growth on service prices. This is a traditional view, but the pandemic recovery has been anything but textbook. In our view, the primary nexus is a demand-pull relationship. The core question for the Fed ought to