If current nowcasts are accurate, we see erosion in some real wages, but not even those for hospitality and leisure. That’s not true for total private NFP using the PCE deflator. [italics denote correction 12/5]
Monthly GDP grows 1.5% m/m, pushed by exports. Along with current expectations for this Friday’s employment release, we have the following picture.
consider the velocity of M2…
Five year inflation breakeven (unadjusted) down, 10yr-3mo term spread down, VIX and EPU up, and S&P 500 down.
There’s a lot of discussion regarding the negative impact of inflation on consumer sentiment. That’s definitely there – but unemployment also has a negative impact. And there is a (at least short run) tradeoff between the two. Relevantly, what would unemployment be in the absence of the American Recovery Plan, the CARES Act, and expansionary monetary policies of the Fed?
I’m teaching unconventional monetary policy in Financial Systems course. Here’s some interesting graphs (not altogether new), relating to forward guidance effectiveness.
Usually, the Friday after Thanksgiving holiday is a quiet trading day. Today, there was lots of news to react to.
Expectations and forecasts from economists continue to diverge from consumer based expectations.