The Federal minimum wage was established in 1938.

It was in effect for about 85 years.

It has now, for better or worse, been effectively abolished. The last three legislated increases in the minimum wage were bipartisan:

1989: President Bush (41) and a Democratic Congress
1996: President Clinton and a Republican Congress
2007: President Bush (43) and a Democratic Congress

The government made the reasonable decision to release CPI data because needed to calculate Social Security COLAs.

Quick summary, core CPI annual rate:
1 month: 2.8%
3 months: 3.6%
6 months: 3.0%
12 months: 3.0% Here are the full set of numbers.

A big upward revision for GDP, was a 3.8% annual rate (up from 3.0% in the advance estimate). For H1 GDP up at a 1.6% annual rate.

The biggest change was consumption which was 2.5% annual rate (up from 1.4% in the advance). Business fixed investment strong, residential weak. Here is quarterly consumer spending. It looked like it was really slowing but with this upward revision and the July and August indications it's looking much more healthy.

The core inflation rate increased for the fourth straight month. Annual rates:

1 month: 4.2%
3 months: 3.6%
6 months: 2.7%
12 months: 3.1% Here are the full set of numbers.

A market slowdown in the pace of job gains, with 22K added in August, bringing the three month average to 29K.

On a percentage basis have not seen job growth this slow outside of recessionary periods in more than sixty years. The unemployment rate rose from 4.2% to 4.3% (unrounded was a smaller increase).

Wage growth was strong and average hours steady.

The core PCE inflation rate increased for the fourth month in a row. Annual rates:

1 month: 3.3%
3 months: 3.0%
6 months: 3.0%
12 months: 2.9%

But two reasons to be less worried than headline: (1) transitory tariffs & (2) some of this is imputed from rising stock market. Here are the full set of numbers I'll talk about.

Particularly notable is how much lower market core has been than overall core at every horizon. Note regular core includes imputed items, notably portfolio management fees where the price goes up when the stock market goes up.

Inflation numbers a little better than expected. But inflation numbers also showing signs of re-inflation, both tariff and possibly otherwise.

Core annual rate:

1 month: 3.9%
3 months: 2.8%
6 months: 2.4%
12 months: 3.1% Here are all the numbers. All of them highly elevated except headline--which benefited from a 2.2% decline in gasoline prices (seasonally adjusted).

The jobs slowdown is here with 73K jobs in July & large downward revisions to May & June bringing the average to 35K/month.

Not quite as bad as you might think because steady-state job growth is much lower in a low net immigration world but unemployment still gradually rising. A small portion of the weaker jobs numbers in recent months are Federal cuts.

My latest @nytopinion attempts to answer the question, "The Tariffs Kicked In. The Sky Didn’t Fall. Were the Economists Wrong?"

Part of my argument is the economy actually has slowed & inflation has picked up, as you would expect.

Plus Trump called off some tariffs and lags. But there are two broader lessons here:

1. U.S. economy is mostly domestic services. Trade matters but it doesn't matter as much as some of the hype might make you think. (And I confess, I do suffer from TDS, tariff derangement syndrome.)

A big pop in core PCE inflation in June. Annual rates:

1 month: 3.1%
3 months: 2.6%
6 months: 3.2%
12 months: 2.8%

No matter what horizon you're looking at this is too high. (Although there is a case that it is transitory due to tariffs.) Here are the full set of numbers.

Q2 GDP came in at a 3.0% annual rate.

There were massive timing shifts that shifted reported growth from Q1 to Q2. The much better way to look at the data is averaging the two which is a 1.2% annual rate. That is well below the pace in 2024 or the Nov 2024 forecast for 2025-H1. Here are the GDP numbers. In Q1 inventories added 2.6pp but imports subtracted 4.6pp. In Q2 it was the reverse, with inventories subtracting 3.2pp and imports adding 5.0pp. These are volatile categories and inventories, in particular, have large measurement error.

Inflation rose in June, with core CPI at an annual rate of:

1 month: 2.8%
3 months: 2.4%
6 months: 2.7%
12 months: 2.9%

You can see signs of tariffs in these numbers and that is only likely to grow. Here are core goods and core services. The service increase is relatively normal (even muted as shelter was low this month). Goods was unusually high including increases in tariffs sensitive items like appliances and apparel.

Senator's Cassidy and Kaine outline a plan to "rescue" Social Security. Both Senators are very thoughtful, bipartisanship on this issue is essential, but unfortunately I'm mostly skeptical on this proposal.

This 🧵 outlines some of the major considerations: They propose the government borrowing $1.5 trillion to invest in stocks..

Simultaneously general revenue would cover full Social Security full benefits.

After 75 years, they argue, the premium on stock investments could repay that initial borrowing. washingtonpost.com/opinions/2025/…

The extraordinary U.S. economy continues to be extraordinary. 147K jobs added in June with upward revisions to April and May. Unemployment rate ticks down to 4.1%. Some contrary signs: participation rate down and hours down + weak wage growth. Note all of this while the Federal government continues to shed jobs--although the job reductions (averaging 11k per month this year) are still small compared to underlying private sector job trends. (And in June state and local education increases overwhelmed federal cuts.)

Core PCE inflation came in just as expected. It has been very tame for the last three months--but shouldn't think of them in isolation but as part of a noisy process where inflation was much higher before.

Annual rates:
1 month: 2.2%
3 months: 1.7%
6 months: 2.9%
12 months: 2.7% Here are the full set of numbers. Most of the measures lined up at this point.

And in big inflation news, the CPI-based Ecumenical Underlying Inflation measure was exactly 2.0% in May, consistent with the Fed's target. This is the first time it has been there since I started this concept during the inflationary episode. The ecumenical measure takes the median of 21 different measures: 7 different concepts (e.g., with and without housing) over 3, 6 and 12 months--all re-meaned to match the PCE inflation that the Fed targets.

In practice it is very similar to 6-month core CPI (re-meaned).

A boring jobs report, in a good way. 139K jobs added (140K private). Unemployment rate unchanged at 4.2%. Hours unchanged. Only notable deviations from steady state were participation down and unusual wage growth up. Note, Federal employment continued to decline. But state and local added almost as much.

Strong jobs report. 177K jobs added. Unemployment rate steady at 4.2% but participation rate up and U-6 down. Hours steady. A slowdown in hourly wage growth. Federal employment was down a bit but state and local more than made up for it. The trend in private jobs is basically the same as total.

Real GDP fell at a 0.3% annual rate in Q1.

The underlying numbers are very extreme--with an enormous increase in imports and inventories.

My preferred measure of "core GDP" a better signal, up at a 3.0% annual rate (see next) Final Sales to Private Domestic Purchasers is usually a better predictor of future GDP growth.

It includes:
Personal consumption: +1.8%
Business fixed investment: +9.8%
Residential investment: +1.3%

ft.com/content/58576a…

Wednesday's Q1 GDP # will have a lot of economic noise, a lot of measurement noise, and could generate even more political noise.

A technical🧵on one aspect: what period does it reflect?

The answer is a combo of pre- and post- 1/20 because of the weirdness of quarterly averages When I (and most people) look at things like CPI or jobs, we look at something like a three month average. That would be growth from Dec 2024 to Mar 2025. Which is also the (geometric) average of the growth rates in Jan, Feb and Mar. It tells you what happened in those 3 months.

Four roughly true and important propositions about trade. Asserting not explaining here, will explain sometime:

1. The volume of trade depends, inter alia, on the magnitude of domestic and foreign tariffs:

X + M = f (US tariffs , foreign tariffs) 2. The balance of trade depends mostly on U.S. macroeconomic balances, like the budget deficit and level of business investment:

X - M = f(US macro balances)