A reader writes:
I think, however, there is a need to more closely examine the overheating of the economy and paths and timing of unwind, for example. As you’ll recall, I argued that the economy was under suppression, not recession, and that’s proving right. So we’re seeing a kind of overheating I can’t recall since maybe the late 1960s or 1970s.
Or, between identities vs. functions. Reader Corev comments:
April industrial production figures were released yesterday. Here’s a depiction of these figures in the context of key macro indicators followed by the NBER Business Cycle Dating Committee:
Surveys indicate some acceleration, vis a vis last month.
Headline vs. Trimmed vs. Sticky Price:
The employment surprise – demand shortfall, supply constraints, or statistical artefact? I discussed on WPR Central Time yesterday.
Today, we are pleased to present a guest contribution by Steven Kamin (AEI), formerly Director of the Division of International Finance at the Federal Reserve Board. The views presented represent those of the authors, and not necessarily those of the institutions the authors are affiliated with.
Given the employment surprise (NFP 266K actual vs. 978K expected, while GS forecasted 1300K), it would be remarkable if interest rates did not respond. Stock indices did drop, then recovered to pre-surprise trend. Five year bond yields did drop somewhat.
April employment figures were released today, showing a marked slowdown in the labor market. Here’s a depiction of these figures in the context of key macro indicators followed by the NBER Business Cycle Dating Committee:
The simple — conventionally reported — inflation breakeven calculation might be misleading.