Over the last 12 months, inflation has increased 5.4 percent in the US. Stoked by a leap for energy prices and a hefty 4.3 percent rise for core inflation. Throughout most of U.S. post-war history core goods price increases, on average rose at a much slower pace than services prices. Not so over the past […]

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 shortest recession ever, according to the NBER, which has a list of 34 recessions going back to 1857. But this recession made up for […]

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 wrote in the Washington Post: “CBO now projects growth will slow to 1.1 percent in 2023 and an average of 1.2 percent in 2024 and 2025 — […]

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 it was during comparable times in the past. The Conference Board, as part of its Consumer Confidence study, each month asks people what they think […]

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 are less worrisome than many conventional economists make them out to be. That said, we certainly accept that such risks are there. But the April […]

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 likely if President Biden is able to get a lot more spending through Congress? We don’t think so. Using orthodox analysis, it is easy to […]

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!

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.

Friday’s employment report indicates almost half of the jobs that vanished in the Pandemic have been recovered.. But there are some industries where there has been hardly any recovery – and those are mostly businesses that will not come back completely until there is a widespread belief that COVID-19 is no longer a threat to what used to be considered normal activities.