New Deal democrats Weekly Indicators for July 10 – 14
Weekly Indicators for July 10 – 14 at Seeking Alpha
– by New Deal democrat
My Weekly Indicators post is up at Seeking Alpha.
Several indicators that had been stubbornly positive throughout the decline in leading metrics as of this past week finally turned either neutral or negative. Much as the dominant punditry at the moment is that the economy will actually stick a “soft landing,” these turns argue that instead consumers may finally be reining in purchases, and holdout metrics in the important construction sector may finally be turning down.
As usual, clicking over and reading will bring you thoroughly up to date, and bring me a little pocket change.
New Deal democrats Weekly Indicators for July 3 – 7, Angry Bear, New Deal democrat
Jerome Powell’s Prized Labor Market Is Back. Can He Keep It?
NY Times – Just In
The Federal Reserve chair spent the early pandemic bemoaning the loss of a strong job market. It roared back — and now its fate is in his hands.
Jerome H. Powell, the chair of the Federal Reserve, spent the early pandemic lamenting something America had lost: a job market so historically strong that it was boosting marginalized groups, extending opportunities to people and communities that had long lived without them.
“We’re so eager to get back to the economy, get back to a tight labor market with low unemployment, high labor-force participation, rising wages — all of the virtuous factors that we had as recently as last winter,” Mr. Powell said in an NPR interview in September 2020.
The Fed chair has gotten that wish. The labor market has recovered by nearly every major measure, and the employment rate for people in their most active working years has eclipsed its 2019 high, reaching a level last seen in April 2001.
Yet one of the biggest risks to that strong rebound has been Mr. Powell’s Fed itself. Economists have spent months predicting that workers will not be able to hang on to all their recent labor market gains because the Fed has been aggressively attacking rapid inflation. The central bank has raised interest rates sharply to cool off the economy and the job market, a campaign that many economists have predicted could push unemployment higher and even plunge America into a recession. …
But now a tantalizing possibility is emerging: Can America both tame inflation and keep its labor market gains?
Data last week showed that price increases are beginning to moderate in earnest, and that trend is expected to continue in the months ahead. The long-awaited cool-down has happened even as unemployment has remained at rock bottom and hiring has remained healthy. The combination is raising the prospect — still not guaranteed — that Mr. Powell’s central bank could pull off a soft landing, in which workers largely keep their jobs and growth chugs along slowly even as inflation returns to normal.
“There are meaningful reasons for why inflation is coming down, and why we should expect to see it come down further,” said Julia Pollak, chief economist at ZipRecruiter. “Many economists argue that the last mile of inflation reduction will be the hardest, but that isn’t necessarily the case.”
Inflation has plummeted to 3 percent, just a third of its 9.1 percent peak last summer. While an index that strips out volatile products to give a cleaner sense of the underlying trend in inflation remains more elevated at 4.8 percent, it, too, is showing notable signs of coming down — and the reasons for that moderation seem potentially sustainable.
Housing costs are slowing in inflation measures, something that economists have expected for months and that they widely predict will continue. New and used car prices are cooling as demand wanes and inventories on dealer lots improve, allowing goods prices to moderate. And even services inflation has cooled somewhat, though some of that owed to a slowdown in airfares that may look less significant in coming months. …
… The Fed may be able to walk that tightrope to a soft landing, retaining a labor market that has benefited a range of people — from those with disabilities to teenagers to Black and Hispanic adults.
Mr. Powell has regularly said that “without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all,” explaining why the Fed might need to harm his prized job market.
But at his June news conference, he sounded a bit more hopeful — and since then, there has been evidence to bolster that optimism.
“The labor market, I think, has surprised many, if not all, analysts over the last couple of years with its extraordinary resilience,” Mr. Powell said.
(A lot of interesting material has been left out of the postings above.)