by Robert Barbera & Jonathan Wright Labor force growth determines the steady-state monthly change in payrolls. Recently, payrolls have expanded at a fast clip notwithstanding a slight uptick in the unemployment rate. The reason why the economy, despite aging baby boomers leaving the work force, can sustainably expand payrolls by about 200,000 per month is...
Bridge the Gaps
The Center for Financial Economics advances knowledge of the economic forces driving the financial system through research and teaching. Our work explores the fundamental economics of our current system and the dynamic tensions that will spur change.
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Star Power
By Jon Faust and Robert Barbera Given the focus on the neutral real interest rate, r*, at the last several FOMC press conferences, one might be forgiven for thinking that estimates of r* play an important role in policymaker judgments about the restrictiveness of monetary policy. We think this gets things backwards. In much conventional...
A Great Job Market, or a Poor One?
By Floyd Norris “We should spend less time talking about race and more time talking about how to get people to work.” Sen. Josh Hawley, R-Missouri, reacting to Donald Trump’s statements on Kamala Harris’s heritage. The Democrats think jobs should be their issue this year. The flood of new jobs created during the Biden administration...
Soon: More Old Than Young
By Floyd Norris The aging of America continues, and it seems likely that this year there will be more people over 60 than people under 20 in this country, the first time that has ever happened. As recently as 1980, there were twice as many people under 20 – most of whom were yet to...
Numbers Don’t Lie?
By Floyd Norris The labor market is booming. The average unemployment rate in 2023 was 3.64%, down a smidgen from the previous year and the lowest for any total year since 1969. But is that just because fewer people are looking for work, and therefore are not counted as unemployed? A way to seek that...
Why Don’t Americans Believe Inflation Is Coming Down? Because (Most) Prices Aren’t
To an economist looking at the government CPI report that came out Tuesday, it is clear that inflation is receding. Over the past 12 months, the overall CPI is up 3.2%, far below the peak annual rate of 9.1% seen in the summer of 2022. The co-called “core” rate, which excludes volatile food and energy...