The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.

Authors for macroblog are Dave Altig, John Robertson, and other Atlanta Fed economists and researchers.

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April 16, 2012

Taking a deeper dive into the definition of inflation

Sometimes our familiarity with a topic gets in the way of our understanding of it. I often think that about inflation. It's widely known that inflation is a condition of rising prices, or what my favorite macroeconomics text defines more precisely in this way: "Inflation is an increase in the overall level of prices in the economy." And while this idea is serviceable for some purposes, it's pretty inadequate if you try to think about how a central bank goes about the business of controlling inflation.

Here's an example. Friday's retail price report for March revealed that prices rose 3.5 percent from February and averaged 3.7 percent (annualized) over the first three months of the year. I think it's pretty clear we have seen an "increase in the overall level of prices in the economy" this year. But how should the Federal Reserve respond to this rise?

I'm not going to offer an answer that question. I'm a policy adviser, not a policy maker. But we need to dig a little deeper into the textbook to get a better understanding of the inflationary process and how a central bank contributes to that process before we offer up an opinion on the matter.

The inadequacy of the textbook definition of inflation is a topic that's been bugging me for a long time. It's silent about the cause of the rise in prices and therefore does not make any distinction about whether the price increase is a corollary of the policies of the central bank or from another source that a central bank can only nominally influence. This distinction is an important one. (For what it's worth, this 1997 article I wrote explains how I think the term "inflation" has come to be synonymous with "price increase." And here's why I think a deeper appreciation of what constitutes "an increase in the overall level of prices" affects how one thinks about the inflationary experience in real time.)

Here's how economist Irving Fisher put it in his 1913 article "The Monetary Side of The Cost of Living Problem":

"If it can be shown, for instance, that today the good things of this world are becoming scarce on the one hand while money and its substitutes are not becoming plentiful it would be reasonable to conclude that the fault lies with goods and not with money. If, on the contrary, it can be shown that money and its substitutes are becoming plentiful and that goods are not becoming scarce, it is reasonable to conclude that the fault lies chiefly on the monetary side."

Are all price increases inflation? Should central banks use their tools to fight against any rise in costs? The answers to these questions have important implications for how we measure inflation in the short run versus the long run, the horizon over which a central bank ought to be held accountable for achieving price stability, and how monetary policies should be calibrated in the face of rising prices.

In that spirit, the Atlanta Fed has developed an animated video that provides additional perspective on the issue of inflation—specifically, what sorts of price increases are part of the inflationary process that is under the control of the central bank, and which are not. This video is the first in a new series that covers economic issues and the work of the Fed. The video is part of the Atlanta Fed's new feature called "The Fed Explained," which includes a range of new and existing content. We hope these videos stimulate conversation on a range of topics important to the Federal Reserve. The format is targeted to the general public as well as to students and teachers, and we hope it provides an engaging supplement to the study of the Federal Reserve.

Let us know.

Mike Bryan Mike Bryan, vice president and senior economist at the Atlanta Fed

April 16, 2012 in Africa, Inflation, Monetary Policy | Permalink


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Inflation should be correctly defined as the rise in relative prices as a result of an increase in the general money supply. I am not sure if there is a good way to measure this definition but it is important to be properly understood.
The reason is because what needs to be defined is the "bad" price increases. If goods are more efficiently produced in a manner that would bring down prices this is "good". But if those prices are not allowed to drop and are offset due to an increase in the general amount of money, this is still considered inflation "bad" because it removes purchasing power from what would normally be there if intervention in the money supply was not induced even though the price has not changed. Similarly to the situation of a supply glut where a good is scarce; the resulting price increase can occur irrespective of monetary increases and is considered "good". This is because it signals the market to produce more of these goods and reduce demand. This should not be entered into the inflation equation. Therefore, inflation should only be measure as the "relative" prices increase due to the change in money supply.

Posted by: Darryl Jones | April 17, 2012 at 09:48 AM

How about Mish Shedlock's definition of inflation and deflation:

--Inflation is a net increase in money supply and credit.

--Deflation is a net decrease in money supply and credit.

I think he tries to argue that inflation itself is a byproduct of increases in the money supply and credit. Not sure Mish is right, but he is thinking somewhat outside the box.

Posted by: farmland investment | April 17, 2012 at 05:14 PM

I agree totally Mike.

In fact I think inflation can also be understood better simply by looking at its impact on behaviour and attitude to money.

During the pre-crisis years money was plentiful. It was easily available because of easy credit conditions and loose monetary policy. As a consequence people lost respect for money. People both borrowed and lent it stupidly. People spent money today that they would ordinarily have deferred spending until later. These conditions are, to me, inflationary regardless of what price indices told us (although we all know that prices of assets not recorded in the various inflation measures rose considerably).

Now what do we have?

Money is scarce. People have regained respect for money. Banks aren't lending it. Households want to save more. Companies aren't investing. People are deferring today's consumption until later. This, to me, is what deflation is, regardless of what the price indices are telling us.

Today's price rises are squeezing disposable income but workers know that the fragility of the economy can not tolerate much upward wage pressure. Can you really have the type of inflation that destroys competitiveness in these conditions?

Posted by: Peter C | April 18, 2012 at 05:23 AM

Inflation is a net increase in money supply and credit.

Posted by: sunglasses hut | April 19, 2012 at 09:20 AM

If the Fed doesn't know what the definition of inflation is or how to measure it, the Fed should not exist. A surgeon who does not know the outcome of removing one organ and adjusting another should not operate. If the definition of inflation has changed from Friedman's definition to the idea of price increases, why is a rising stock market not considered inflation? This article conjours up a view in my head of a medeival sorcerer mixing frog necks in a bubbling pot casting spells and looking for evidence of success.

Posted by: Bob | April 21, 2012 at 07:06 AM

personally i ask myself this all the time, until i finally hit on Ed Dolan's definition of inflation:

If you could choose between shopping on line today at today’s prices, or buying from a mail order catalog of the past at past prices, what items, if any, would you buy from the past?

with the internet, you can find all sorts of examples (like the $150 bike, $30 helmet, and $25 lock in the 1988 sears catalog can be found in *todays* sears online catalog for the same price).

Its nearly impossible to quantify substitution and quality improvements (the laptop i am writing this on sells new for 50% of what i bought it for 3 years ago). oh, and changing baskets of goods as we retire and consume more health care.

But, making it concrete helps understand what we are talking about. some things, like oil and cars have gone up (except that cars are so much more fuel efficient now, has the all-in price really increased?).

and by the way, that bike has not changed in price sine 1988, but wages have (productivity!) so no wonder I bought a much more expensive bike!

in other words, the more deeply you think about it, the more ephemeral it becomes.


Posted by: dwb | April 24, 2012 at 05:15 PM

The video was helpful, but I felt like a child watching a cartoon. A little humiliating. The content was good though.

Posted by: Anthony T | April 24, 2012 at 10:09 PM

It may be time to tackle or at least examine inflation from different vantage points within the economy. How about 4 different perspectives: those in poverty/low income families, the middle class, the upper class, and industry. I wonder if aggregating prices with the gross assumption that each price impacts all sections of society equally causes distortions in policy makers perception of what is really going on. I must simply ask should/would Central Bank monetary policy change if we found out that from the middle class perspective inflation was 5,6, 7% or more but in aggregate inflationary pressures were only 2.5%? Maybe someone can reading this blog can provide some guidence but intuitively I would think the relative importance of inflationary pressures decline as income increases. If this were true AND aggregation of price data were shown to skew/smooth inflation data thereby masking the impact of inflation on the middle class and below...Central Bank policy would most likely be out of whack for the majority of people. Just wondering...

Posted by: Danny | April 27, 2012 at 10:29 AM

Today's price rises are squeezing disposable income but workers know that the fragility of the economy can not tolerate much upward wage pressure. Can you really have the type of inflation that destroys competitiveness in these conditions?

Posted by: sunglasses hut | April 29, 2012 at 11:44 PM

As a practical matter, in my working life, The Fed has always defined inflation as increasing wages for ordinary idiots. Thus it has never been "inflationary" for bank executives to quadruple and quadruple again their rake, nor has it been counted as "inflation" when the price of oil went through the roof. And when the price of literal roofs (and the homes beneath them) went absolutely bonkers, from 2002--2006? Not inflation.

That was called "a dynamic and prosperous economy."

My wages have been flat, or nearly so, since I began my working life in 1989. My wage was frozen in 2008, reduced in 2009-2010, restored to its 2008 level last year and remains there now. Adjusted to the official CPI I am paid nine percent less today than I was in 2004.

Ergo: no inflation!

Hence: that insipid video from the Atlanta Fed.

Posted by: Edward Ericson Jr. | April 30, 2012 at 02:09 PM

Consumer prices are not overall prices. In this case they reflect the rise in commodities that the Fed itself has engineered with the various QE's. Overall prices would include labor, perhaps housing and assets. Rental rates are included, and their rise is really from the misery in homeownership.

What is clear is the rise in aggregate prices is not caused by a wage-price spiral or anything close to nearing limits on capacity. Ah, but the magis at the fed are ready to raise rates to stall the economy that is already moribund. (Not that raising rates would not be a good idea for other purposes.)

Posted by: Demandside | April 30, 2012 at 11:19 PM

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April 13, 2012

Is the composition of job growth behind slow income growth?

Harold Meyerson, Washington Post opinion writer, channels a Bloomberg report (via The Big Picture), and thinks he finds a smoking gun:

"Why is this recovery different from all other recoveries?

"... what really sets the current recovery apart from all its predecessors is this: Almost three years after economic growth resumed, the real value of Americans' paychecks is stubbornly still shrinking. According to Friday's Bloomberg Economics Brief, ‘the pace of income gains is well below that of the past two jobless recoveries and real average hourly earnings continue to decline.'

"The Bloomberg report cites one reason for this anomaly: Most of the jobs being created are in low-wage sectors. According to Bloomberg, fully 70 percent of all job gains in the past six months were concentrated in restaurants and hotels, health care and home health care, retail trade, and temporary employment agencies. These four sectors employ just 29 percent of the country's workforce but account for the vast majority of the jobs being created."

Meyerson accurately repeats the Bloomberg story, but that story itself is somewhat misleading. To begin with, the 70 percent figure appears to include the entire category of professional and business services, of which temporary help services are only a part. The types of jobs that fall under the professional and business service label are broadly described by the U.S. Bureau of Labor Statistics and include employment in scientific and technical services, management jobs as well as administrative and support type jobs. In particular, the professional scientific and technical services sector is described as follows...

"The Professional, Scientific, and Technical Services sector comprises establishments that specialize in performing professional, scientific, and technical activities for others. These activities require a high degree of expertise and training. The establishments in this sector specialize according to expertise and provide these services to clients in a variety of industries and, in some cases, to households. Activities performed include: legal advice and representation; accounting, bookkeeping, and payroll services; architectural, engineering, and specialized design services; computer services; consulting services; research services; advertising services; photographic services; translation and interpretation services; veterinary services; and other professional, scientific, and technical services."

... and here is the description of management of companies and enterprises sector:

"The Management of Companies and Enterprises sector comprises (1) establishments that hold the securities of (or other equity interests in) companies and enterprises for the purpose of owning a controlling interest or influencing management decisions or (2) establishments (except government establishments) that administer, oversee, and manage establishments of the company or enterprise and that normally undertake the strategic or organizational planning and decision making role of the company or enterprise. Establishments that administer, oversee, and manage may hold the securities of the company or enterprise."

These parts of the economy are hardly made up of the prototypical low-wage jobs and, according to my calculations, you don't get to Bloomberg's 70 percent number without including them.

If you focus strictly on "restaurants and hotels" (or, more precisely, the leisure and hospitality sector), health care, retail, and temporary employment services, your conclusion would be that these sectors accounted for about 50 percent of total job growth/change over the past six months, a share that may still strike you as pretty significant. But is it really? A little historical context might help:

It is true that this expansion, which began in July 2009, has been unusually concentrated in the four sectors identified by Bloomberg and highlighted in the Meyerson piece. However, a closer look reveals that the only one of the four that looks unusual is employment in temporary help services, the share of which in this recovery has been five times the post-1990 level as a whole. (We reach the same conclusion even if we compare where we are today in this recovery—roughly three years out—with that same period following the recoveries from the 1991 and 2001 recessions.)

On the other hand, it is also true that the share of temp services in total jobs gains has been much lower over the past six months than it was earlier in this recovery. I don't know if that share will eventually fall to the (remarkably stable) level that characterized the (almost) two decades before the past recession. But even if that share remains near 12 percent, as opposed the more historical 6 percent level, I think the story remains the broad-based nature of the relatively tepid growth (in incomes and jobs) that has characterized this recovery.

David AltigBy Dave Altig, executive vice president and research director at the Atlanta Fed


April 13, 2012 in Employment, Labor Markets | Permalink


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the bloomberg story notwithstanding, the BLS itself projects that 4 out of 5 of the new jobs in greatest demand this decade will be low paying, low skilled positions that dont even require a high school diploma:


top 5: nurses, retail sales, home health aides, personal care aides, & construction helpers)

Posted by: rjs | April 13, 2012 at 06:58 PM

The immense debt overhang might catch your attention one of these days. This debt is enormously greater, thanks to the great housing boom, than in prior recessions. Debt service sucks at incomes like gas prices, creating no follow-on economic activity. Also relatively unique to this so-called recovery, the absence of meaningful investment. Hard to have a business cycle, much less a recovery, without investment.

Posted by: Demandside | April 30, 2012 at 11:31 PM

Just about ALL sectors are becoming "low wage sectors." Journalism used to pay a professional wage. No more. Construction trades used to be unionized; carpenters in new England made $30 an hour in the early 1990s. Try getting that anywhere now. Nursing home workers were in the mid teens per hour then. They're still getting that now, if they're experienced, 20 years later.

These are low skill jobs? You try coping a new inside cornice on 150-year-old Colonial. Or better yet, bathing a cantankerous 83-year-old man with brittle bones and neuropathy seizing up his legs. Either way, you'll be making about $12 an hour to start. Hope you enjoy the smell of urine!

Posted by: Edward Ericson Jr. | May 02, 2012 at 01:36 PM

Income level isn't increasing in comparison with the Job growth. Many people face many obstacles while managing their family in a better way. This is an alarming for us. Companies and Corporate agency should take a look on this.

Posted by: resume examples | June 25, 2012 at 09:57 AM

It can be concluded now that the lowering of wages is affected by the world economy.

Posted by: John Williams | October 13, 2012 at 10:47 AM

with wages and salary stagnated, consumer's purchasing power also is affected and in return, affects producers in such a way that production and manufacturing also is affected.

Posted by: Jamee Polin | July 28, 2013 at 01:59 AM

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April 09, 2012

Historical Perspective on Monthly Job Growth, and Jobs Calculator Enhancements

Today, the Bureau of Labor Statistics reported that, according to its Payroll Survey, 120,000 nonfarm jobs were added to the U.S. economy in March. There are a number of ways we can assess this number. First, and immediately, is the question of whether that number of additional jobs was enough to absorb the number of people who wanted jobs. Since the unemployment rate decreased slightly in March, the answer to that question is yes.

We can take another look at the jobs number, this one with a historical perspective. The chart plots the monthly change in payroll employment from January 1980 through March 2012, along with the average monthly payroll employment change that occurred during each expansionary period since 1980 (the dashed line). Abstracting from 1981, which some may not consider to be an expansionary period, the average monthly change in payroll employment has declined over successive expansionary periods, from roughly 228,000 jobs per month between December 1982 and July 1990 to 97,000 per month between December 2001 and December 2007. The current period, July 2009 through March 2012, has seen an average increase of about 71,000 jobs per month.

Monthly Change in Employment

While the current period's average monthly employment growth is approaching the average of the 2001–07 expansionary period, the apparent longer-term erosion of monthly job growth during expansionary periods might be of some concern. Of course, that concern is tempered by expectations about the growth in the labor force. As many have noted, the United States is facing a declining population growth rate and is on a long-term downward trajectory in labor force participation (see projections from the Congressional Budget Office and the Bureau of Labor Statistics).

The implication is that the economy now needs to create fewer jobs each month on average to absorb the labor force than it did 30 years ago.

Because of the usefulness of this historical perspective in assessing current jobs numbers, we've enhanced the Atlanta Fed's Jobs Calculator to provide the user this same perspective. As the user adjusts the desired unemployment rate and other assumptions, the resulting number of jobs needed to achieve that unemployment rate is now not only reported numerically but also illustrated graphically to give the user a perspective on where that number of jobs fits into a historical context (see the screenshot). We've made some other small changes that we believe improve the user's experience, so check it out again.

Jobs Calculator

The Jobs Calculator is designed to answer the very simple question: "How many jobs need to be created to achieve a specific unemployment rate in a specific amount of time?" Of course, there are some assumptions the user can change, but that is the basic question.

Last month, in this macroblog post, I described how the Jobs Calculator can address a related, but different, question: "What would the unemployment rate have been if the labor force participation rate had not changed from the previous month?" Yet another question came up a few days ago that the Jobs Calculator, although not specifically designed to do so, can answer: "How many months will it take to reach an unemployment rate of, say, 8 percent?" Of course, to answer this question, we need to make an assumption regarding a reasonable monthly job growth number. This is where a historical perspective comes in handy.

Let's assume that a reasonable average monthly job growth number is 150,000, which is roughly the number of jobs added per month on average during the previous two periods of expansion. Also, let's leave all the other assumptions (the labor force participation rate and monthly population growth rate) at their default values for March.

Now, enter 8 percent in the target unemployment rate box and 1 for the number of months. Now hit the Enter key. (Yes, you can now use the Enter key to calculate!) Based on these assumptions, this calculation returns 437,854 jobs. Now, for number of months, enter 2, then 3, and so on (hitting Enter each time) until the number of CES jobs needed reaches about 150,000. I got there with six months (with the number of additional CES jobs needed at 153,539).

At 150,000 jobs per month (roughly) and March default assumptions for labor force participation and population growth, we get this:

  • A 7 percent unemployment rate will take about three years.
  • A 6 percent unemployment rate will take about five years.

We hope you like the enhancements to the Jobs Calculator, especially the historical perspective it now provides. Try it out again and let us know what other questions you have found it useful to answer.

By Julie Hotchkiss, a research economist and policy adviser in the Atlanta Fed's research department

April 9, 2012 in Employment, Labor Markets | Permalink


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The structure of the structural unemployment question

In the middle of its thorough analysis of U.S. labor markets, the New York Fed tucked in a direct look at whether persistently high unemployment can be plausibly ascribed to mismatches between the skill sets of unemployed workers and those skill sets required by available jobs. The operating hypothesis goes something like this: structural unemployment arises when the skills that are appropriate for declining sectors are not easily transferable to the jobs available in expanding sectors. In the current context, we can think, for example, about the challenge of turning construction workers into nurses (a metaphor offered a while back by Philadelphia Fed President Charles Plosser). If skill mismatch is an important source of postcrisis unemployment, it stands to reason that we would find its markers in the construction sector.

In fact, the authors (Richard Crump and Ayşegül Şahin) of a New York Fed study find no evidence that construction workers are "experiencing relatively worse labor market outcomes." Though this observation comes with its caveats—in this space my colleagues Lei Fang and Pedro Silos noted that construction workers who are finding employment in nonconstruction businesses apparently have suffered unusually large wage reductions—the Crump-Şahin results generally conform to other research questioning the proposition that skill mismatch looks to be a larger-than-normal problem in the current recovery.

The idea that inter-sectoral flows of employment, or the lack thereof, is a source of structural unemployment has a venerable history in macroeconomics. But it is increasingly clear to me that the bigger story is not about skill mismatches as workers flow across sectors but about mismatches as workers are faced with changing skill requirements within sectors. In other words, the issue is not changing construction workers into nurses, but changing both construction workers and nurses from old-style workers to new-style workers.

"Old style" and "new style" here refer to jobs defined by the performance of routine tasks versus those that require the performance of nonroutine tasks. The labor market outcomes associated with this shift from old style to new style has come to be known as "job polarization." Job polarization is the subject of a new paper by Nir Jaimovich and Henry Siu, described last week by David Andolfatto at MacroMania:

"Job polarization refers to the recent disappearance of employment in occupations in the middle of the skill distribution...

"Evidently, these classifications correspond to rankings in the occupational income distribution. Non-routine cognitive occupations tend to be high-skill jobs, and non-routine manual occupations tend to be low-skill jobs. Routine occupations—both cognitive and non-cognitive—tend to be middle-skill occupations.

"... across three decades, the share of employment in the middle of the skill distribution appears to be disappearing. Prime suspect: routine biased technological change (e.g., think of ATMs replacing bank tellers)."

The post-1980s job polarization trend has received a lot of attentions over the past decade—notable studies by MIT economist David Autor (here and here), for example—but the essential message of the Jaimovich-Siu study is the observation that trend changes are not smooth, but concentrated around downturns in the economy. Jaimovich and Siu explain:

"... job polarization is not a gradual phenomenon: the loss of middle-skill, routine jobs is concentrated in economic downturns. Specifically, 92% of the job loss in these occupations since the mid-1980s occurs within a 12 month window of NBER [National Bureau of Economic Research] dated recessions (that have all been characterized by jobless recoveries). In this sense, the job polarization 'trend' is a business 'cycle' phenomenon... Our first point is that polarization happens almost entirely in recessions.

"Our second point is that jobless recoveries are due to job polarization... jobless recoveries are observed only in... disappearing, middle-skill jobs. The high- and low-skill occupations to which employment is polarizing either do not experience contractions, or if they do, rebound soon after the turning point in aggregate output. Hence, jobless recoveries are due to the disappearance of middle-skill, routine occupations in recessions."

A few posts back, I posed this question:

"[The pace of improvement in employment, overall and by sector,] draw a clear picture of labor markets that are underperforming by historical standards—a position that I take to be the conventional wisdom. An argument against following that conventional wisdom centers on the question of whether historical standards represent the appropriate yardstick today. In other words, is the correct reference point the level of employment or the pace of improvement in the labor market from a permanently lower level?"

The Jaimovich-Siu results really do suggest that the answer could well be the latter. That said, the levels of employment in the broad nonroutine job categories identified in Jaimovich and Siu's paper remain below the peak levels associated with the 2001 recession—something that was not apparently true at this point in the recoveries after the 1990–91 and 2001 recessions.

Furthermore, not everyone agrees that the Jaimovich-Siu case is persuasive. Mark Thoma, for example:

"There is plenty of evidence pointing in the other direction, i.e. plenty of evidence indicating the problem is cyclical and we are nowhere near full recovery.

"With so much uncertainty remaining, the advice from Stevenson and Wolfers in a post... about how policymakers should react when they are unsure of how strong the recovery will be is appropriate:

'... the cost of too little growth far outweighs the cost of too much. If we readily bear the burden of carrying an umbrella when there's a reasonable chance of getting wet, we should certainly be willing to stimulate the economy when there's a reasonable risk that doing nothing could yield a jobless generation.'

"The fact that the costs are asymmetric and what this means for policy—it should lean against the more costly outcome—seems strangely absent from policy discussions and decisions."

It is worth noting that asymmetric costs referenced here are a matter of judgment, not theory. In fact, if the employment losses suffered through the recession are structural, stimulating the economy is exactly the wrong thing to do. (The classic exposition of this point, in math terms, was provided years ago by Michael Woodford.) In this sense, Thoma's argument just begs the question.

And though there may be "plenty of evidence" pointing in the direction of labor market slack, there is also developing evidence of tightness directly related to the job-polarization phenomenon. From Kathleen Madigan, at The Wall Street Journal:

"The U.S. labor market is struggling with a paradox: despite an 8.3% unemployment rate, many jobs go begging.

"The Institute for Supply Management-New York said this week that 20% of its members say the shortage of skilled labor is an obstacle to business. On Thursday, the National Federation of Independent Business [NFIB] reported a rising share of small business owners who say they have jobs that are hard to fill."

Care should be taken not to over-interpret these types of observations. Though the degree of skill shortages reported in the NFIB surveys was higher in 2011 than 2010, it is still well below prerecession levels. As I indicated in my earlier post, in the end the truth is likely to seen in the behavior of inflation. The asymmetry to which Thoma, and Stevenson and Wolfers, appeal is implicitly based on their belief that the risks of inflation are very low. With that in mind, this summary at Angry Bear of the March employment report warrants some notice:

"Recently, unit labor cost has been rising faster than prices, implying margin pressure and very weak profits. To sustain profits growth, firms have to reestablish stronger productivity growth. The weakness in March employment is a strong indicator that business is trying to rebuild productivity growth and profits growth."

The other possibility, of course, is that businesses will try to rebuild profit growth by raising prices.

The story continues to develop. Watch this space.

David AltigBy Dave Altig, executive vice president and research director at the Atlanta Fed


April 9, 2012 in Employment, Labor Markets | Permalink


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For all this to have happened over a period of two years resulting in the loss of something around 13 million jobs, one that happened to coincide with the collapse of a bubble of inflated values in housing -- which created massive phony equity propping up mass demand -- seems beyond silly. Disingenuous really, anything to avoid seeing the real problem as inadequate demand, and the only lasting solution as creating jobs directly simply by returning to a level of infrastructure repair and modernization appropriate for an what is supposed to be an advanced country -- something subjected to malign neglect for 30 years.

Posted by: urban legend | April 10, 2012 at 04:20 PM

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