Category Archives: Federal Reserve

The International Aspects of the Employment Release

The headline number for nonfarm payroll employment was decent [1], and although there are worrisome aspects, I think the key take-away is the fact that manufacturing employment is slowing much more than overall. To the extent that manufactured goods proxies for tradables, I think caution is in order with respect to monetary tightening. And yet, I read headlines reporting that the “Fed is on track to raise rates…”[Sparshott/RTE WSJ].

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Output, Employment and Unemployment: Some Updated and Some New Results

In a previous post, Laurent Ferrara, Valérie Mignon, and I examined the nonlinear relationship between employment and output (based on J.Macro (2014)). Using the most recent data, the level of (establishment) employment now matches the output level. Figure 1 shows the actual level, and the predicted level from a nonlinear error correction model that allows short run dynamics to differ between recession and non-recession regimes.

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