Implications for the dollar’s trajectory
It’s that time of year again when our graduate students present seminars based on their dissertations in preparation for flying around the country trying to get an academic job. So I thought as a public service I’d call attention to this instructional video from the faculty at the University of Wisconsin on what new Ph.D.’s can expect when they give their first job talk.
The October employment release was much in line with expectations. I will focus my observations on a few observations:
(1) Alternative indicators indicate better improvement than headline (estimated) nonfarm payroll employment; (2) estimated nonfarm payroll employment has been revised upward over the past couple months; (3) estimated employment compensation growth remains muted, especially after taking into account catch-up and estimated productivity gains.
Reader Tom argues that economic discourse should not include discussion of variables that are unobservable, to wit (or at least indicate that it’s an estimate):
You announce somebody’s estimations of a theoretical, unobservable phenomenon as “the output gap” or “the actual output gap” as if you and they actually know them to be the output gap.
If we used this criterion, what variables would be ruled out from polite conversation? A lot…let’s just take the real interest rate.
On progress in implementing the minimum wage.
Last week the U.S. Federal Reserve closed a chapter on the experiment with quantitative easing, just as the Bank of Japan opened a new one. Seems like a good time to comment on some of what we’ve learned so far.
Yesterday’s advance GDP release for 2014Q3, covered by Jim, was welcome news, and was something Jeff Frieden and I predicted at the beginning of the year . However, while growth seems to be firming, it is far too soon to take away stimulus. Figure 1 shows that the degree of economic slack remains large. [edits 11/6 to accommodate reader Tom’s critique]
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 3.5% annual rate in the third quarter. That combines with a 4.6% annual growth rate now reported for the second quarter, giving us an average growth rate for the last six months that is solidly above the postwar average.