The Brave-Butters-Kelley monthly GDP for June is out. Here’re growth rates of this series compared against the SPGMI (formerly IHS/Markit) monthly GDP, and the Philadelphia Fed’s coincident index, which should track GDP.
Mean and Median Average Hourly Earnings Growth Compared
Anonymous tells a story about an old engineer regaling people with aphorism like “you may know the significant digits but do you know the significance of the number”, in talking about what the average joe is experiencing. Here are some easily calculated numbers showing the distinction between mean and median average hourly earnings (note that median usual weekly earnings are the product of median earnings and median hours worked).
Guest Contribution: “Startups create fewer jobs and do not survive as long as previously reported”
Today, we’re pleased to present a guest contribution by Rob Fairlie Professor of public policy and economics at UCLA.
Close to/at Target Inflation
Instantaneous (Eeckhout, 2023) PCE and CPI inflation.
Arguments about the Output Gap, 2017
Reader JohnH asserts pgl makes up crazy output gaps. My search of Economists View turns up this 2017 exchange. I don’t see a “crazy” assertion by pgl (certainly not as crazy as the Friedman view of a -18% gap), even if it was in disagreement with CBO’s assessment (and Furman’s) at the time, that the economy was near full employment.
What’s the Output Gap? – 2023 Edition
One argument for maintaining tight monetary policy is inflationary pressures — but the question is whether it’s from a positive output gap or cost-push shocks (or expectations). One big question is what is the size of the output gap.
Business Cycle Indicators, as of 9/1
With the employment release, and the monthly GDP from SPGMI, we have the following picture of key macro indicators.
The Employment Release, News, and Futures-Implied Fed Funds
NFP employment at 187K (vs. Bloomberg consensus 170K), while average hourly earnings y/y up 4.3% (vs. consensus 4.4%). Combined with to June figures and preliminary benchmark revision, we have a picture of a cooler labor market.
Quantity Theory/Divisia – PaleoKeynesian Phillips Curve Horse Race
Does an error correction model of the Divisia M4 quantity theory or a old style expectations and supply shock augmented Phillips curve fit the post 2019 period better (using 1998-2019 data)? Answer: The Phillips curve works better.
Defense Equipment Investment and Depreciation
Reader JohnH asks “is there a net US GDP forecast that includes the depreciation of defense capital?”. For what I think is being asked (commonly known as NDP, or net domestic product), the answer is de facto yes.