CFNAI for January, WEI for mid-February

Economic growth slightly below trend.


CFNAI-MA3 is -0.02, so slightly below trend in January — but still above the -0.07 threshold for contraction. WEI y/y growth is 1.87% for week ending 2/17.


13 thoughts on “CFNAI for January, WEI for mid-February

  1. pgl

    JohnH has been on some parade lying about what I and Macroduck has said (nothing new there) and pretending he is the only person who favors the Earned Income Tax Credit which Jonny believes is the most important means for addressing income inequality. There is a lot little Jonny boy leaves out. Now I’m no fan of Reihan Salam but this discussion is far better than the stupid trash from little Jonny boy:

    First of all EITC as structured is different from the well known Negative Income Tax idea. Secondly EITC was championed by known “progressives” like RONALD REAGAN as well as Milton Friedman. But my favorite is this from David Cay Johnston:

    ‘If the earned income tax credit, combined with the end of welfare as we knew it, hold down wages for low-skill workers then it is time to find smarter ways than Chicago School theories to reduce poverty for those who work.’

    Indeed but do not expect smarter ways to be something a Ecinomic Know Nothing like JohnH would ever come up with.

    1. JohnH

      pgl’s link unleashes a whopper early on–“Imagine that more people whose skills limit them to low-paid work decide to work more hours so they can get the credit.”

      Fact is, there is no required minimum earnings or number of hours needed to qualify for the credit. The amount of the credit rises as a percentage of earnings up to a certain income, at which point the percentage rate of credit begins to decline. The more you work, the more you make. Although the credit helps, it still may not represent a living wage.

      The real problem is that the EITC was never designed to address the needs of people who probably should not be working–single mothers…you can thank Bill Clinton for ending welfare as we knew it.

      The irony is that pgl trumpets lowering interest rates under the guise that they will “help workers” by lowering unemployment…though the jobs created may be just like the ones that David Cay Johnston and Reihan Salam complain about. But my real favorite is when pgl says that “it is time to find smarter ways than Chicago School theories to reduce poverty for those who work”…when the real problem is to support single women who should be taking care of their kids, not working at all.

      When has pgl ever addressed the problem of the working poor other than to offer them a rate cut? And when has he ever addressed the problem of poverty among single working mothers? pgl’s solution: let them live off of rate cuts!

      1. pgl

        “The real problem is that the EITC was never designed to address the needs of people who probably should not be working–single mothers”

        I guess we can chalk little Jonny boy as being a sexist pig.

  2. JohnH

    pgl’s comment is exactly the kind of nonsense that I would expect from someone shilling for corporate interests under the guise of promoting pro-worker policies. When an explanation starts with “iImagine that…” instead of providing data that documents the behavior, you can pretty well assume that it’s a PR exercise.

    pgl chooses to ignore economists who like Josh Bivens, who make it their business to study labor and employment: “Although simple theories of the labor market imply that EITC expansions will lower wages, the empirical evidence is quite limited and dated. What evidence there is suggests that wage effects are important but that the EITC is nevertheless quite effective at raising the incomes of its intended beneficiaries: Even with the implied wage effects, the EITC makes recipients much better off. The evidence on the implied wage effects derives from decade-old studies that examine data from the mid-1990s. There have been important changes since then in our labor market and policies, and in our understanding of the operations of the labor market, that limit the applicability of this evidence to current proposals.

    We conclude that concerns about EITC effects on wages are not a strong argument against proposals to expand the EITC. When EITC expansions are coupled with minimum wages, the two policies work together to improve low-wage workers’ economic situations. Moreover, the policies complement each other more effectively the more they are designed to overlap: A high minimum wage protects more EITC workers from negative wage effects, and an EITC targeted to workers protected by the minimum wage is more fully passed on to workers and boosts their economic fortunes more than wages alone can.”

    What’s also noteworthy is that pgl constantly agitates for lowering interest rates under the guise of “helping workers,” while ignoring the fact that effects of changes in interest rates lags a lot. In the case of the Great Recession, the unemployment rate was actually slightly higher two years after the Fed funds rate bottomed in April, 2009. It took until 2017 for the unemployment rate to drop to its pre-Great Recession low. By contrast, stock prices responded immediately to the Fed’s rate cuts. In only two years after the Fed funds rate bottomed, the S&P500 had almost reversed all its losses from the Great Recession.

    While Ducky, pgly, and others here constantly agitate for lower interest rates under the guise of “helping workers, I have yet to see them advocate policies that would help workers immediately in the event of an economic downturn–policies such as “boosting unemployment insurance as a macroeconomic stabilizer.” benefit here is that what immediately helps workers also acts to stabilize aggregate demand.

    So, tell me, pgl, why are you so keen on interest rate cuts, which help investors immediately, but so averse to advocating policies that would immediately help workers and help the economy at the same time? After all, this is an election year…shouldn’t economists be promoting policies that help the vast majority, not the top 10%?

    1. Macroduck

      “…you can pretty well assume that it’s a PR exercise.”

      No, you can’t. That’s Johnny’s trick to dismiss what other people write, say and think, so Johnny can avoid actually arguing the point.

      This is why I coined the term “Johnny-mumble”. Johnny does this all the time. Johnny is willing ro be as dishonest as he needs to be, to distort, sneer, dismiss or lie, simply trying to score debating points.

      Johnny asks repeatedly why pgl, or I, think cutting rates is a good idea, and the pretends that the only thing we could possibly care about is asset values. That’s a perfect example of Johnny’s dishonesty. Interest rate policy influences much more than asset prices, including employment, output, wages, home ownership, debt burdens and the overall performance of the economy. Johnny lies when he says that anyone who disagrees with him must care only, or at all, about asset prices. That’s what Johnny does. That’s who he is.

      This is the same guy who argues against supporting Ukraine because support for Ukraine amounts to wishing for more Ukrainians to die. That’s the most obviously twisted logic imaginable, but maybe that’s because Johnny doesn’t care about Ukrainians any more than he cares about U.S. workers. His arguments ring false because they are false. Simple as that.

      1. pgl

        Jason Furman advocates higher wage floors as EITC by itself. That is what I have been saying. Now Jonny boy is trying to tell us that unions pushing for higher wage floors is futile. Yea – he is that dishonest and dumb.

      2. pgl

        I fell on the floor laughing at what came before:

        “instead of providing data that documents the behavior”

        I provide data. You provide data. Jonny has no clue what data even is except for cherry picked statistics he abusing to mislead. But the Furman paper is interesting even if little Jonny boy has no effing clue what Furman wrote.

      3. JohnH

        Ducky said, ” Interest rate policy influences much more than asset prices, including employment, output, wages, home ownership, debt burdens and the overall performance of the economy.”

        As always, Duck presumes a lot without providing evidence. I already noted that the unemployment rate was actually higher two years after the Fed funds rate bottomed in April, 2009. Now there’s influence for you!!!

        As for wages, the Fed’s monetary policy’s “influence” was hardly something to cheer:

        And strong economic performance? Has Ducky conveniently forgotten the lackluster performance of the early 2010s?

        But stock prices? They went gangbusters in the early 2010s.

        The areas that Ducky mentioned did eventually improve…but giving credit to the Fed is a big stretch, given such a long lag time–the improvements could have just as well been attributed to the passage of time!

        I also provided Ducky with a link to a USA Today article that looked at the potential effects of a rate cut today…and found the impact to be generally underwhelming. Ducky never disputed the analysis, preferring to talk in more theoretical terms.

        But Wall Street is eagerly anticipating a rate cut…which tells you who stands to make out like bandits…almost instantaneously…and calls into question the motivations of economists constantly agitating for a rate cut.

    2. pgl

      I actually read Furman’s discussion which I doubt little Jonny boy did. I know little Jonny boy does not understand the economics. But I had wonder about Figure C and this conclusion:

      ‘To be sure, in this simple model the combination of the EITC and minimum wage is not perfect. There are more workers wanting to work at the minimum wage than there are jobs available, so some job seekers are unable to work and benefit from the EITC.’

      That assumes a perfectly competitive labor market. It does seem Furman later admitted there is something called monopsony power, which I have noted many times. Now we know trolls like Jonny boy and Princeton Stupid Steve have no clue what the implications are but for the adults here, Furman does a nice job of explaining the economics. And BTW – I have long supported wage floors. Little Jonny boy has not.

  3. Pgl

    Bivins like me argues for wage floors. Little Jonny boy has told us workers should never even try. I would explain this interesting of monopsony power but this basic laboreconomics is way over the head of my mentally retarded stalker

    1. JohnH

      LOL! pgl argues for rate cuts, not wage floors. Heck, if he advocated minimum wages, he would have been outraged by Democrats’ behavior in state elections where minimum wage initiatives were passed. In places like Florida, Democrats preferred to lose the elections to riding the coattails of popular initiatives like increasing the minimum wage.

      1. pgl

        ‘LOL! pgl argues for rate cuts, not wage floors.’

        Damn you are dumb. Interest rates and wages are two different topics. But leave it to my mentally retarded stalker to get even simple things confused.

        Come on dude – your rants are so pathetically stupid that your mom is about to disown you.

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