The Pandemic recession lasted two months, the National Bureau of Economic Research decided this week—more than a year after the supposed end of the recession in April 2020.  That is […]

The Congressional Budget Office has issued some dire forecasts about the U.S. economy, which is causing alarm in some quarters.  But do those forecasts make sense? As Andrew Van Dam […]

Americans are more enthusiastic about the job market than they have been at any time in the past half century. And yet the official unemployment rate is well above what […]

The prices of used cars and trucks are up almost 30% over the past 12 months, contributing a substantial part of the inflation increase – the CPI was up 5% […]

In a companion CFE blogpost, we acknowledge that the supersized fiscal stimulus enacted earlier this year invites serious angst about accelerating inflation. We make the case that the inflation risks […]

Was the recently enacted Biden stimulus package too large?  Is it likely to produce an economic boom so large that it does real damage?  And is that damage even more […]

Robert J. Barbera and Jonathan H. Wright We’ve written two pieces recently on Treasury yields amid the COVID recovery.  Wednesday’s  release of the Federal Reserve Open Market Committee’s Survey of […]

There is much excited talk in the press these days about the rise in ten-year yields to 1.5 percent and the rise to 2 percent for the breakeven inflation rates expressed when we comparing Treasury nominal and TIPS yields. The bond vigilantes are back! Another Great Inflation around the corner!

In December of 2019, the U.S. unemployment rate stood at 3.6% and prime age labor force participation, at 82.9%, was at an 11 year high. Today, December 2020 jobs figures were released, with unemployment at 6.7% and participation at 81%, both making it clear that today’s economic backdrop is bleak. These data also make clear that engineering an extended period of strong growth is highly justifiable.

How bad a year was 2020? During the year, the United States economy lost a net 9.4 million jobs — 6.2% of the jobs it had at the end of 2019. That is by far the largest annual decline since 1950. The years that included the financial crisis more than a decade ago had seen the largest losses of jobs, with a 3.7% decline in 2009 following a 2.6% fall in 2008. The year just ended was a little worse than the two of them combined.

In the spring of 2009, amid the darkest moments of the Great Recession, I published a book and a blogpost. The book, reviewed here, championed the notion that mainstream macroeconomic thinking failed to appreciate, for good and ill, the central role that finance plays in capitalist economies.

The United States, unlike many countries, releases its GDP figures as annual rates. That makes no sense now, when there are clearly forces at work that will not continue for quarters to come. It makes more sense to say the economy contracted 9.0% in the second quarter and expanded 7.1% in the third quarter.