non-linearities in the Phillips Curve, payrolls, and bond-market inflation expectations; the New Deal and Neoliberal Orders; the New York Times in the tank for Theranos grifter Elizabeth Holmes, &...
Thinking About Non-Linearities in The Phillips Curve: And a natural market solution is to let the labor market participation rate take its course. While the overall participation rate was unchanged in the April jobs report, the one for prime age people (25-54) grew 0.2 percentage points from 83.1% to 83.3%. We want more of this to narrow the labor market gap. Job openings = about 9.5 million. Available supply = Unemployed (5.6 million) + Marginally attached to labor market (but not counted in the labor force (about 1.4 million) + Those who report they want a job but are not yet in the labor force (5.3 million) = 12.3 million potential workers. An increase in the participation rate may raise the unemployment rate, but the job creation has been so strong (as you point out) that the unemployment rate has fallen. More of this could still happen and policy ought to encourage it. Lift the employment/population ratio. There are people out there looking for work. The median duration of unemployment has fallen from about 20 weeks a year or so ago to 8.4 weeks. A major friction in the matching of people to jobs could be that the job openings are in, say, CA, and the available people are in TN and they do not want to move (or vice versa). Nonetheless, policy should try and the Fed should let this happen. Fingers crossed.
Thinking about: what I’ve always thought but it’s nice to have a model. So now the only problem is to get the Fed to solve the model for the instrument settings needed to return inflation to target without recession And El Erian et al tell it to do so 😀
Thinking About Non-Linearities in The Phillips Curve: And a natural market solution is to let the labor market participation rate take its course. While the overall participation rate was unchanged in the April jobs report, the one for prime age people (25-54) grew 0.2 percentage points from 83.1% to 83.3%. We want more of this to narrow the labor market gap. Job openings = about 9.5 million. Available supply = Unemployed (5.6 million) + Marginally attached to labor market (but not counted in the labor force (about 1.4 million) + Those who report they want a job but are not yet in the labor force (5.3 million) = 12.3 million potential workers. An increase in the participation rate may raise the unemployment rate, but the job creation has been so strong (as you point out) that the unemployment rate has fallen. More of this could still happen and policy ought to encourage it. Lift the employment/population ratio. There are people out there looking for work. The median duration of unemployment has fallen from about 20 weeks a year or so ago to 8.4 weeks. A major friction in the matching of people to jobs could be that the job openings are in, say, CA, and the available people are in TN and they do not want to move (or vice versa). Nonetheless, policy should try and the Fed should let this happen. Fingers crossed.
Thinking about: what I’ve always thought but it’s nice to have a model. So now the only problem is to get the Fed to solve the model for the instrument settings needed to return inflation to target without recession And El Erian et al tell it to do so 😀