Discover and read the best of Twitter Threads about #FloorGLI
Most recents (4)
Up now on the @employamerica blog:
Framework Update: Strong Enough Income Growth To Justify Hikes, But Slowing Enough For The Fed To Plan Off-Ramps
Q3 ECI and CPS suggest strong (above "floor") but decelerating gross labor income growth (jobs & wages)
employamerica.org/blog/framework…
Framework Update: Strong Enough Income Growth To Justify Hikes, But Slowing Enough For The Fed To Plan Off-Ramps
Q3 ECI and CPS suggest strong (above "floor") but decelerating gross labor income growth (jobs & wages)
employamerica.org/blog/framework…
Full 🧵 forthcoming tomorrow morning.
The necessary and sufficient conditions for Fed tightening within our 2019 #FloorGLI framework remain satisfied, but the goals shouldn’t be to increase unemployment and the case for rapid 75bp rate hikes is diminishing…
The necessary and sufficient conditions for Fed tightening within our 2019 #FloorGLI framework remain satisfied, but the goals shouldn’t be to increase unemployment and the case for rapid 75bp rate hikes is diminishing…
In May 2019, we released our Fed framework. Prioritizes a robust trajectory for gross labor income (GLI) (job growth & wage growth).
If expecting GLI to fall short of "floor" growth trajectory. ease.
If expecting above floor & inflation > target, tighten
employamerica.org/researchreport…
If expecting GLI to fall short of "floor" growth trajectory. ease.
If expecting above floor & inflation > target, tighten
employamerica.org/researchreport…
We didn't learn a whole lot about the Fed's forward guidance strategy aside from the fact that it will be related to the conclusion of the Fed's framework review. If the Fed needs some suggestions for how to proceed with state-contingent forward guidance
medium.com/@skanda_97974/…
medium.com/@skanda_97974/…
For those wondering, yes, these suggestions overlap with @employamerica's proposed #FloorGLI framework in that the goal is to achieve a baseline rate of employment and wage growth: medium.com/@skanda_97974/…
The Evans Rule had a number of flaws from which Sudiksha Joshi and I hope the Fed learns the right lessons...
To start with, the Fed really should look beyond consumer price inflation if they want to escape the asymmetric costs posed by the zero lower bound...
To start with, the Fed really should look beyond consumer price inflation if they want to escape the asymmetric costs posed by the zero lower bound...
Highlights:
Chair Powell is recognizing that the Fed can shape labor market outcomes over the longer-run. That is a big deal.
This is a serious departure from the orthodox view of his predecessors: that the Fed can't affect the labor market over the longer-run, only inflation
Chair Powell is recognizing that the Fed can shape labor market outcomes over the longer-run. That is a big deal.
This is a serious departure from the orthodox view of his predecessors: that the Fed can't affect the labor market over the longer-run, only inflation
Chair Bernanke is seen as an ambitious dove but even he state to Congress that:
“Monetary policy — as a general rule — cannot influence the long-run level of employment or unemployment. And that’s certainly correct. What we are trying to address is the short run cyclical gap.”
“Monetary policy — as a general rule — cannot influence the long-run level of employment or unemployment. And that’s certainly correct. What we are trying to address is the short run cyclical gap.”
A sustained expansion & a tighter labor mkt can broaden employment gains and help lower-income communities overcome persistent economic barriers.
Powell: "With this tight labor market, employers are waving issues that might have prevented people from being in the work force.”
Powell: "With this tight labor market, employers are waving issues that might have prevented people from being in the work force.”
#FloorGLI Update! Full disclosure: my preferred method for measuring GLI does get revised but retains most of its usefulness even when evaluating growth in real-time.
April Income growth on BBG ECO screen looked good. The details and the revisions were not; GLI growth downshifted
April Income growth on BBG ECO screen looked good. The details and the revisions were not; GLI growth downshifted
You don't have to convince me of the importance of looking at data that isn't vulnerable to revision. It's why the household survey is better than the establishment survey on Jobs Friday (NFP/AHE are overrated)
Luckily, GLI reflects much of the real-time info from the HH survey
Luckily, GLI reflects much of the real-time info from the HH survey
Our framework sees value in fwd-looking policy, instead of purely reacting to realized data (the optimal mix is an art, not science).
But the last 2 quarters of GLI growth now look to be running well below the floor. YoY readings are likely to stay below the floor for some time
But the last 2 quarters of GLI growth now look to be running well below the floor. YoY readings are likely to stay below the floor for some time
