We have an economy with a positive first derivative and negative second derivative—everything is continuing to improve but it improving at a slower pace than before.
Normally 661,000 jobs would be something to celebrate. But when you’re 11 million jobs short of where you were in February the slowing pace of recovery is a worry.
Three reasons for it:
1. Easy recovery already happened. Has been people being called back from temporary layoff, permanent unemployment rising.
2. CARES Act expired.
3. Virus resurgence.
Notably in September there were 661,000 jobs added (payroll survey) while 1.5m reduction in temporary layoff (household survey). That is worrying because the fuel of labor market recovery is going away.
Also notable, the labor force participation rate has not moved since July. Normally we would expect a strengthening economy to have an increase in participation rates. Moreover, if the $600 was having a large disincentive effect that should have raised participation.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
Broadly speaking what has happened is core services inflation as only slowed a little (less than people were hoping on lagged shelter) while goods prices have started rising--with unusually large auto price increases in November that could still be hurricane-related.
I believe it is useful to make small contributions to big things (many engaged in doing that now) & also bigger contributions to small things.
On the later, in @BostonGlobe I argue for zoning reform to enable Cambridge to help build more than 1,000 additional housing units.
A🧵
States and localities can resist the likely regressive thrust of federal policymaking while doing what they can to build a more progressive, inclusive and upwardly mobile society.
To do that we need cheaper housing.
And to do that we need more housing.
VP Harris was right to set a goal of building 3 million housing units. On a proportional basis that would require 1,050 from Cambridge. Unfortunately on current course we'll get 100. But with reforms proposed by the City Council that could be raised to more than 1,000.
I know many skeptics of prediction markets. I don't have an ideological faith in them (OK, maybe quasi ideological). But the empirical evidence is they have worked really, really, really well. And did again on Tuesday night.
A short 🧵 about this remarkable picture.
Markets gave Trump a 60% chance. How does that prove they know what they're doing? If Harris won could say, "but she had a 40% chance" so wasn't wrong.
That's correct. Can only judge when you've seen them many, many times. Do 60% chance things happen 60% of the time?
In Ec10 we should them 15 million data points from sports betting from @andrewlilley_au comparing the prediction market probability to the outcomes.
And guess what: if you collect 100 markets with a 6% chance of a team winning and look at the results you'll see them win 6 times.
The macroeconomy is strong--high growth, low unemployment, falling inflation--the best of any advanced economy.
But there was a reluctance to present/understand how families were still not out of the deep inflation hole. And too much masked by cherrypicking/misleading stats.
IF Donald Trump had been President for the last 4 yrs here are some stats you would have heard more from progressives. Relative to 2019:
--Real median household income down 0.7%
--3m more people in poverty (poverty rate up 0.6pp)
--Unemp rate up 0.6pp
--Mortgage rate up 3pp
To be clear: Not claiming these were or weren't Biden-Harris's fault (e.g., if Congress had passed their child tax credit maybe poverty down). Also not saying that they are the only objective perspective on economy (I omit positive data). But under appreciated by progressives.
I was asked to recommend 5 books on economic policy by @nytimesbooks--ostensibly to help people make up their minds for this election but even if you don't have time to read them before voting the issues will still be relevant in 2028, 2032, etc.
One tweet for each.
1. The Little Book of Economics by @greg_ip
I was looking for a primer on deficits, inflation & other macro issues. I had this on my shelf unread but a colleague suggested it for this purpose--and it fit the bill perfectly.
Except is really The Little Book of MACROeconomics...
2. Career and Family by @PikaGoldin
Microeconomics centers around scarcity and there may be nothing more scarce than our time. And no more difficult tradeoff for many than career and family.
This book is the culmination of the work that earned Goldin the Nobel Prize.