Just how bad is the economic outlook? These days the answer seems to depend on the politics of the person being asked. The Bloomberg Consumer Comfort Index is released weekly, based on a poll that asks only three questions. Consumers are asked to rate the overall economy, the buying climate and their personal finances as […]
Category: Macro
Beware of Seasonal Adjustment
By Kevin Heerdt and Jonathan H. Wright Economic data released by the government and other entities are being distorted by normally acceptable statistical methods. The extreme economic data that are coming out raise important issues of seasonal adjustment. Of course, there is no questioning the fact that the economic data are bad in an unprecedented […]
Votes, deaths and layoffs
There are 50 states, but only 13 where the 2016 presidential election was decided by a margin of less than eight percentage points. Six of them went for Hillary Clinton and seven for Donald Trump. It is likely that this year’s election will be largely decided in those states. So how are they faring in […]
The best kind of stimulus
No sooner was the ink dry on the March 27 $2 trillion stimulus package than Washington began work on the next stimulus. This is the right thing to do. Deficit hawks who worry about the debt-GDP ratio should want it, because without further stimulus, the debt-GDP ratio will soar because of crumbling GDP. Both President […]
Embracing Distancing and Cushioning the Blow to the Economy
The global COVID-19 outbreak now sports exponential growth rates for cases and deaths on every continent save Antarctica. Students of the economy must add that we are also in the midst of an unprecedented blow to global output, income, and employment. In financial markets, the pace of decline for equity and corporate bond prices exceeds […]
Trump stocks
President Trump has frequently pointed to the performance of the stock market in praising his own performance, although not in the past week when markets worldwide came down with (fears of) the coronavirus. Even at the end of the market’s worst week since 2008, the S&P 500 has still risen at a compound rate of […]
A Surprising – And Ominous? — Boom
There has been much talk about the death of bricks-and-mortar retail, which traditionally hires hundreds of thousands of temporary workers in November and December for the Christmas rush. With more and more business being conducted online, it stood to reason that general merchandise stores — the Macy’s and Targets of the world — would be […]
Zero Bound
The outlook for growth in employment and corporate earnings over the next few years is headed down. The problem is not what the Federal Reserve will do, or what a Democratic (or Republican) Congress is likely to do, or the possibility of a mushrooming trade war. It is the unsustainable nature of what has caused […]
Lord make me pure, but not until 2020
In a recent post, we complained that Congress had muzzled the CBO, forbidding them from reporting budget projections until the forecasts could “reflect the tax legislation and any major decisions about spending that the Congress makes in the next few weeks.”[1] We conjectured that the spending cuts offered up would be slated for the out […]
CBO: The dog that didn’t bark, for now
Each January the Congressional Budget Office provides a 10-year budget forecast, driven by the interplay of tax laws, spending commitments, and a 10-year economic projection. Not so in 2018. CBO received a directive from the Senate and House Budget Committee Chairs, instructing them to hold off on supplying a report until they can produce a […]
Jobs and Inflation, Dec. 2017
Eighteen months ago, in “Six Degrees of Separation between jobs and inflation,” we argued that job gains of 200,000 per month could easily continue for the next 18 to 24 months without providing significant upward pressure on inflation. Eighteen months are up, and as of today’s job report we’ve seen solid job growth of 187,00 […]
Budget Projections, Interest Rate Assumptions, and Preposterous Assertions
Since early 2014, we’ve been lamenting the fact that CBO has persisted in telling the same Armageddon budget story as it was telling 2009-2012, despite the fact that the deficit picture had dramatically improved. We mused aloud that if real debt problems did reappear, they might regret having spent several years crying wolf. If we […]