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Justin Wolfers Profile picture
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9 Nov, 5 tweets, 2 min read
To explain the inside joke: The more the coronavirus makes in-person interactions dangerous, the more valuable Zoom is.
So Zoom's stock crashing can signal that traders believe we're making progress in the war on the virus — like today's news about a potentially powerful vaccine.
A successful vaccine would be a huge boost for vast swathes of the (non-Zoom) economy. While the stock market is not the economy, the sharp rise in broad stock indices gives you a a sense of the tremendous optimism that this would be a huge boost.
Summarizing the early results from the trial.
And how quickly we can roll the new vaccine out.
An important and underappreciated point that should guide both our personal choices (mask up!) and policy decisions (the case to rush a reopening has never been weaker).

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More from @JustinWolfers

Justin Wolfers Profile picture
6 Nov
Payrolls +638k in October, and the unemployment rate has fallen by a full percentage point to 6.9% (even as participation rose).

A very strong household report, with a weaker (but pretty much as expected) payrolls report.

Sadly, the payrolls report is usually more informative.
That unemployment rate is worth digging into. It comes from a separate survey, in which employment was reported to have grown by a massive 2.2 million.

This decline in unemployment occurred even as the labor force grew 724k.

It's good news, but from the less reliable survey.
Usually payrolls growth of +638k would be fantastic news. But right now, much less so.

The economy lost 22 million jobs Feb-Apr, and had made half of that back by Sept.

If we crawl back the remaining 11 million jobs at this rate, it'll take ages. The recovery is worryingly slow
Read 9 tweets
Justin Wolfers Profile picture
3 Nov
Lemme tell you a little about why I'm not putting much weight on prediction markets this election. The short version is that the main US market, @PredictIt, is structured in a way that allows big mis-pricings to persist.
Right now, you can sell a share that pays $1 if Trump wins, for 40 cents. I would love to do that. But there are large transaction costs that get in the way, and they're so big that it would be wrong to infer that markets believe that Trump is anywhere near a 40% chance to win. Image
Let's say that I'm willing sell 1000 of these shares, effectively buying "Not Trump" shares for 60 cents. If so, I'll lose $600 if Trump wins. You might think that I stand to win $400 if Trump loses, but that's not quite the whole story, because transaction costs are a big deal.
Read 14 tweets
Justin Wolfers Profile picture
29 Oct
GDP rose by +7.4% in Q3 (pretty much exactly as expected), after falling by -9.0% in Q2 and -1.3% in Q1. All told, the economy is -3.5% smaller than it was at the end of 2019.

For context, the economy is roughly as far below its peak as in the darkest days of the last recession
When the economy rises by +7.4%, some will report this as being at an "annualized rate" of 33.1%.

Lemme be crystal clear: This does not mean that the economy is now one-third bigger. (Lemme explain...)
Reporting *quarterly* GDP growth at an *annualized* rate answers the question: If the economy also grew at this rate for the next 3 quarters, how much larger would the economy be?

But there's no chance that will happen, so the annualized rate answers a question no-one is asking.
Read 17 tweets
Justin Wolfers Profile picture
2 Oct
Payrolls rose +661k in September and unemployment fell half a point to 7.9%.

We are still 11 million jobs below the February level -- a larger gap than at the low point of the financial crisis.

The economy is a deep hole, and the rate at which we're digging out is slowing.
While unemployment fell sharply (down by -970k), it's mainly because participation plunged, and the labor force fell by -695k.
The easy work of ending furloughs is slowing (temporary layoffs were down by 1.5 million), but the harder work of repairing the more lasting damage is only growing, and permanent layoffs were up by 345,000.
Read 13 tweets
Justin Wolfers Profile picture
11 Sep
Hey look, my favorite economist is testifying at the @WaysMeansCmte in Washington-ish in the next few minutes (around 12:15pm). She's got a lot to say about our way out of our current mess.

You can watch here on twitter (link below), or on youtube here:
SHE'S ON. More can't miss TV from C-SPAN filled with meaty econo-goodness.
twitter.com/i/broadcasts/1…
Betsey urges Congress to focus not on the changes but on the levels. The economy's in a funk, and it needs help.

TELL 'EM BETSEY.
Read 6 tweets
Justin Wolfers Profile picture
27 Aug
The Fed's announces tweaks to its monetary policy strategy.
federalreserve.gov/newsevents/pre…
I suspect Fed watchers will see this as big. It seems more like a gradual evolution to me.

There are three big changes, which I'll take in turn.
First, the Fed promises to focus on "shortfalls of employment", rather than "deviations" is just clarifying what it always meant.

Shortfalls matter for the employment part of the dual mandate.
But deviations matter for inflation.

So it retains the right to respond to deviations
Read 11 tweets

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