What’s interesting about this WSJ survey is the size of the margins. By 56-16 forecasters say inflation would be higher under Trump; for interest rates it’s 59-16 www.wsj.com/economy/econ...
Two years ago the yield curve inverted, leading to many predictions of imminent recession based on this “sure-fire” indicator. We’re still waiting. Worth remembering if the next employment report breaches the Sahm Rule.
Fun fact: Back in 2022, the FOMC was widely derided for predicting only a small rise in unemployment with core inflation rapidly falling. Those projections turn out to have been almost exactly right. www.federalreserve.gov/monetarypoli...
Way back in 2021 White House economists argued that the inflation surge resembled the spike after WWII and could be ended without major pain. They were right! www.whitehouse.gov/cea/written-...
Jason Furman, 2022 (singled out only because he was admirably explicit): if unemployment stays low, inflation “will still be about 4% at the end of 2025.” www.hks.harvard.edu/centers/mrcb...
Not a perfect comparison, and I’ve deliberately omitted the period when pandemic composition effects distorted the numbers. But 14 years of Conservative rule have been associated with stagnant real wages and severe deterioration of public services. This was a well-earned rout
I haven’t been paying as much attention as usual to inflation indicators. But we’ve been getting a string of good news.
One source of inflation pessimism was the high ratio of job openings to unemployed workers. That issue has now gone away, with unemployment still very low 1/
Underlying inflation is also low. I like the New York Fed’s measure, in large part because it’s an algorithm that doesn’t involve judgement calls and hence possible motivated reasoning. It’s within spitting distance of the 2 percent target 2/
Finally, for those concerned inflation might get entrenched in expectations, the Atlanta Fed’s measure of business expectations is also within spitting distance of 2 percent. Hard to see anything here that justifies concerns about “sticky” inflation or a difficult “last mile” 3/
It seems certain that Trump will try to make crime an issue in the debate, even though Biden has ended the Trump crime wave — homicides in 2024 will be far lower than 2020, and probably below 2019. But anyway, I was struck by this by Maria Bartiromo 1/
As someone who walks around NYC all the time, and also tracks the crime #s, I know how ridiculous this is. But it’s not just me. Weekend foot traffic in Midtown, where Fox has its offices, is higher than prepandemic; strangely, people don’t seem too terrified to go out 2/
Is there really a last mile in inflation? Using Cleveland Fed nowcasts, here’s the picture for core PCE; bear in mind that lagged shelter is still exaggerating the numbers. That bump early this year looks like an aberration.
I keep seeing a factoid to the effect that the euro area and the US economies were the same size in 2008, but America is now 44 percent bigger. Folks, that’s just the exchange rate. At purchasing power parity, nothing like that has happened
The BLS has finally updated its estimates of the Harmonized Index of Consumer Prices, which excludes owners’ equivalent rent, a price nobody pays that is also a lagging indicator. Dude, where’s my inflation problem?
Remember all those 2022 predictions that getting inflation down would require years of very high unemployment? Here’s where we are now (using the Cleveland Fed nowcast for May)
Still thinking about that survey in which 78 percent said that fast food has become an unaffordable luxury. Here are real sales at limited service restaurants: people seem to be buying an awful lot of something they can’t afford
A number I’ve been watching: the NY Fed asks people whether they expect to be better or worse off a year from now. By this indicator, optimism is surging
Nobody knows what political effect The Conviction will have. But there’s one argument I’m surprised I haven’t seen. Some low-information voters surely lean toward Trump because they think of him as a winner, an image he has cultivated all this life. Doesn’t this dent that image?
