12:00 AM, Nov 7, 2015 • By IRWIN M. STELZER
Lift-off. That’s the conclusion to which observers jumped when the government announced on Friday that the economy added 271,000 jobs in October. And that the August and September figures have been revised upward by 12,000. And that the unemployment rate fell to 5 percent. And that discouraged workers and those looking for fuller-time jobs fell to 9.8 percent of the work force, the lowest level since May 2008. And that average hourly earnings in the private sector were up by 2.5 percent from October of last year, the strongest reading since July 2009.
Federal Reserve Board chairwoman Janet Yellen said only a few days ago that the monetary policy committee would likely raise rates if the economy seemed strong enough “to generate further improvements in the labor market.” This jobs report certainly is an early Christmas gift to Yellen, who had been hoping that she would be able to turn her hints about raising rates into actual increases.
It is fashionable for economists to say that a single month is not a trend, which Charles Evans, president of the Chicago Federal Reserve Bank, hastened to point out. But 271,000 is undoubtedly – all right, most probably – the number Yellen has been hoping to see so that she could raise interest rates in December, putting monetary policy on the path to normality before champagne corks popped in the halls of the Fed on New Year’s eve. More than fashionable, it is mandatory for economists to have an “on the other hand,” this one provided by the Lindsey Group. More than all of the increase in jobs was provided by workers over 55 years of age (other groups lost workers) with no college education, meaning younger, better educated workers remain on the side-lines. Bad news for future productivity. We worry so much about the demand for workers that we forget that the economy cannot grow more rapidly if the supply of younger, properly skilled workers is not forthcoming.
Still, markets will be surprised if rates do not go up 0.25 percent when the Fed’s monetary policy committee meets in mid-December. Never mind that the annual rate of increase in inflation has not yet reached the Fed’s 2 percent target – that can be papered over with a vague statement that if the jobs market improves, inflation cannot be far behind, a theory many economists less than plausible. And never mind that it was only a month ago that the Fed was refusing to raise rates because of slower growth and perhaps worse in China; it has since rather regretted tying its decisions to what might be happening in the People’s Republic.
So much for what the Fed is likely to do. Here are some guesses as to the impact of what would be a long-awaited reversal of the monetary policy adopted by the Fed to prevent a major recession from descending into something far worse. The two major drivers of the rather weak recovery have been the auto and housing sectors. Vehicles are moving off showroom floors in record numbers, in part because dealers and manufacturers have been able to offer 72-month loans at very low interest rates – below 3 percent for qualified customers. They might have to tighten those terms a bit, but can easily offset any discouraging effect that might have on potential buyers by increasing what are called “incentives,” price cuts in ordinary English. My guess is that the industry will march into 2016 in good order, scandal-ridden VW excepted.
12:00 AM, Oct 10, 2015 • By IRWIN M. STELZER
Strange as it may seem, Barack Obama has much in common with the storied matchmaker of Jewish legend. This Polish entrepreneur announced to the poverty-stricken rabbi of a poverty-stricken Polish town that she had found a match for his even more poverty stricken, unattractive son – no less than the queen of England. The Rabbi refused to consent to the match on the grounds that the queen was not Jewish.
The left blames economic woes on everything except its hero president.Sep 14, 2015, Vol. 21, No. 01 • By STEPHEN MOORE
Two weekends ago, the Federal Reserve Bank of Kansas City held its annual monetary conference in Jackson Hole, Wyoming. The left flew in hundreds of protesters donning green T-shirts that demanded “Higher Wages for America” and chanting, “We’re Fed Up.” The crowd was an assortment of college kids on their summer break, disgruntled middle-aged teachers, senior citizens, and blue-collar union members. Think Occupy Wall Street.
9:46 PM, Jul 13, 2015 • By STEPHEN F. HAYES
Wisconsin governor Scott Walker entered the Republican presidential race Monday in a forward-looking announcement speech that touched upon conservative principles that have guided his work in the state.
10:14 AM, Jul 9, 2015 • By GEOFFREY NORMAN
First time claims for unemployment spiked last week. As Bloomberg reports:
Jobless claims climbed by 15,000 to 297,000 in the week ended July 4, a Labor Department report showed today in Washington. The median forecast of economists surveyed by Bloomberg projected claims of 275,000.
12:01 AM, Jul 4, 2015 • By IRWIN M. STELZER
Parades, fireworks, patriotic songs, 150 million hot dogs consumed, 41 million car trips of more than 50 miles -- and heightened security in reaction to Islamist terrorist threats to disrupt our celebration with murder and mayhem as part of their celebration of their holy month of Ramadan. That’s all part of the celebration of our independence from Britain, which at that time specialized in governing us by executive fiat.
4:28 PM, Jun 17, 2015 • By GEOFFREY NORMAN
The subject of debt – how much and how tolerable – slipped into the shadows for a time. But yesterday, it reappeared. As Rebecca Shabad of the Hill reports:
8:42 AM, Jun 5, 2015 • By DANIEL HALPER
The latest jobs report from the Bureau of Labor Statistics shows the unemployment rate ticking up to 5.5 percent and that the economy added 280,000 jobs:
Total nonfarm payroll employment increased by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, leisure and hospitality, and health care. Mining employment continued to decline.
10:37 AM, Jun 2, 2015 • By GEOFFREY NORMAN
That negative 1st quarter GDP has been widely passed off as the effect of a particularly severe winter. Things, we were assured, were not that bad and would be getting better as the weather warmed. Well, not so fast. The Commerce Department came out this morning with a report on factory orders that was supposed to be in positive territory.