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21 Oct, 4 tweets, 1 min read
Initial unemployment claims continued to tick down to 290k in week ending Oct 16, after modest upward revisions to previous week. Strikers are not allowed unemployment insurance but could cause some downstream layoffs that do qualify depending on how long persist.
The data covers the week of the employment survey for October, which is shaping up to look much better than September. Much of loss due to Delta wave fading, including the number of workers who missed work and were not paid due to illness.
Fear of contagion also abating while more reliable hours in school for kids is enabling some to rejoin the labor market. Strikes could temper gains but only those that covered the entire week of the survey week. Anyone working an hour that week on payrolls is counted in Oct #s.
Those receiving special pandemic assistance have plummeted with lapse in program on Sept 6. Only a few states have extended UI. The h bc mom

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More from @DianeSwonk

Diane Swonk Profile picture
22 Oct
Some thoughts on the labor shortages and some gaps emerging btwn employer & workers.

Research done during the pandemic shows that subsidies & stimulus checks were a modest hurdle to searching for a job. Other factors - illness, care of others, fear were much larger.
But, hard to say this behavior is linear. Over time, loss of supplements & UI much more costly. Long-term unemployed are typically the hardest to reemploy but is encouraging that employment data reveals a drop in the long-term unemployed. We are tapping some of that pool.
Also, notable @aaronsojourner analysis of the household pulse survey, which is shows a major shift between September and peak Delta wave and October. One thing holding workers back in Sept large # of people caring for sick or ill themselves. Dissipated in early Oct.
Read 17 tweets
Diane Swonk Profile picture
20 Oct
Yep. And @federalreserve poised to taper in November and complete by mid 2022. Markets have been warned. A quick liftoff in rates is not off table in 2022, depending on how much inflation cools - there is a big difference between 2% and 3% inflation within Fed.
Composition also matters. Shelter costs are accelerating as other costs are hitting a plateau or decelerating. Could see somewhat lower but more broad based inflation in 2022. That would test the patience of the Fed on rate hikes. Remember momentum =/= level prices.
Momentum should be helping us to lower overall inflation measures next year but may not get where the Fed wants to be, where inflation is not an issue or not noticeable until 2023. That is a blip in context of history but an eternity for those dealing with it in the moment.
Read 4 tweets
Diane Swonk Profile picture
16 Jul
Boom. Consumers stepped it up and out in June with retail sales surprising many on the upside. Sales moved 0.6% higher instead of further in the red, despite shortages of vehicles which pushed vehicle sales down in June. Sales ex vehicles surged 1.3% in June.
Consumers rushed to traditional department stores, clothing retailers, health & beauty stores & restaurants & bars. They bought luggage, clothing, shoes to fill it & makeup to adorn newly unmasked faces. Online spending bounced back as we will search online to find what we want.
Spending at gas stations surged on higher prices at the pump & the return of us all to the roads to commute & go on vacation. Sadly, the surge in gas prices are upping the wages that low wage workers need to keep take home pay steady or rising. Another hurdle for small biz.
Read 6 tweets
Diane Swonk Profile picture
16 Jul
Opening up is hard to do. Been taking to a lot of business that have opened doors on offices to bring people back. Some have reported uptick in office infections because people are not honest about vaccines. Prompted reset on vaccines. Debating proof of vax to shed mask indoors.
Some debating full vax requirements to return to offices. This is more rare. Others reporting surge in stress among those who return. This is to be expected and many companies are trying to be as flex as possible - others are not.
Another issue is lack of support services in city centers. Hard to find a place to get a lunch, fast or slow. Some offices catering in because of surge of closings in the areas where their offices were. This seems to be a very big city issue.
Read 5 tweets
Diane Swonk Profile picture
15 Jul
I have to admit. I think much of the inflation we are seeing is transitory. Also think some could linger. Shelter will show up w/ a lag. Y/Y comparisons get much easier - inf measures get much lower - as we move into 2022. BUT, I remember high inflation & what it did to rates.
It was a nightmare. There are a lot of Fed presidents who worried ab inflation returning w a vengeance in 2010s. They were wrong. Not clear the lessons of 2010s apply today as much as Doves believe given how different post pandemic economy is turning out to be.
But, this is really important. It does look like a step up on price levels rather than the start of a vicious cycle. Hard for workers to maintain the moment in the🌞the pandemic has delivered many after the storm. Key is to watch where the 🔥 is concentrated.
Read 8 tweets
Diane Swonk Profile picture
14 Jul
@federalreserve Powell’s testimony today sticks to his script on patience in policy, arguing that the current surge in inflation & labor market friction are likely transitory. BUT, the door is left open to changes in policy if the 🔥 we are fails to dissipate.
He cites the July Monetary Policy Report, which has provide an in-depth perspective on how the Fed is thinking about inflation and the labor market. It is available here federalreserve.gov/monetarypolicy…

The Fed is sees bottlenecks abating & labor supply to ⬆️ w/school openings
The uncertainty is greatest around inflation expectations & whether they can remain anchored enough to allow inflation to abate or whether they will move even higher. This is where the Fed would pivot and hit the brakes more aggressively if their analysis is wrong.
Read 6 tweets

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