Labor Markets
In the coming weeks, we hope to discuss in greater detail what kinds of labor market and inflation outcomes the Fed should be aiming for. Here is an initial layout of how some of our macroeconomic views tend to differ from senior Fed officials. The Fed has increasingly gone back
New data from December shows a labor market that remains strong all-around even as wages have begun to decelerate. The unemployment rate ticked down from 3.6% to 3.5%, while prime-age employment increased from 79.7% to 80.1%. The establishment survey continued to show growing employment, but at
The Fed says that the labor market needs to cool in order to bring inflation down. A key part of the case for maintaining the current pace of rate hikes is built on high measures of wage growth. Jay Powell cited the last average hourly earnings figure as one sign
What to Expect: 1. The Fed will step down from their breakneck pace of 75 basis point hikes to a still very brisk 50 basis point pace of hikes. 2. FOMC members are likely to signal that the peak Fed Funds Rate will be above 5%, likely in the target
As Congress considers a year-end spending bill, it faces a decision that will have a meaningful effect on inflation: whether or not to extend across-the-board Medicare reimbursement rates.
Overall the labor market data from November show a mixed picture, with the establishment survey showing resilience even as the household survey signaling a slowdown.
A Labor Supply Shock? Much ado has been made about the shortfall in the headline employment-to-population ratio and the headline labor force participation rate of late. Many have claimed that recent wage and price pressures trace back to a “labor supply shock”. Some have even tried to make the more
Summary 1. Friday's Q3 ECI release showed a modest slowdown in the pace of wage growth. Coupled with what we already knew about Q3 employment growth, we are continuing to see a slower—though still highly respectable and resilient—pace of gross labor income growth (~6.1% annualized
This is the second piece of our vacancies series. In this piece, we refute specific vacancy-backed arguments that the Federal Reserve will need to engineer a recession in order to bring inflation under control.