Remember the recovery? It began officially way back in the middle of 2009, 18 months after the financial system—and then everything else in the American economy—fell apart. Given that nobody has seen much of a raise since …
Economy
Why Is Unemployment Falling So Fast When Growth Is So Slow?
The U.S. unemployment rate has fallen from 9% to about 8% in the last year, to the delight of everyone from job seekers to the Obama re-election team. But traditional economic theory tells us that shouldn’t have happened unless the economy was growing by double its current 2.5% rate.
Who Should Be the Next President of the World Bank?
Everyone is focused on the U.S. presidential elections this year, but there’s another presidential race that’s heating up – the race to be president of the World Bank. It’s a process that’s just as political, but much …
How High Will Global Oil Prices Rise?
If you’re watching global oil markets and getting a sickening feeling in your stomach, you’re in good company. Oil prices have spiked precipitously in recent weeks, with the U.S. benchmark price at over $107 and Brent rising …
After More Stock Market Milestones, Is It Time to Breathe Easy?
It’s been a heady week for the markets: The Dow Jones Industrials burst through 13,000; the Nasdaq skipped over 3,000 for the first time since 1999; and yesterday the S&P500 topped 1,400 for the first time in almost four years. …
The Government Bond Market Is Nervous That the Recovery Is Real
We’ve been getting pretty good economic news for the past couple of months – unemployment claims are trending lower; nonfarm jobs are creeping up; consumer confidence is rising as stock prices climb.
So, of course, for the …
Should We Find Comfort in the Fed’s Stress Tests Results?
The Federal Reserve announced late Tuesday the details of its latest “stress test” of major American financial institutions, and the markets greeted the results with qualified optimism. Nineteen banks submitted capital plans to …
We’ve Suffered a Jobless Recovery. Is a Recovery Without Growth Next?
The economic-news meme of 2011 was the “jobless recovery.” This was a term used by pundits to describe the U.S. economy, which, measured in GDP, began growing again in the third quarter of 2009. Unemployment, however, remained stubbornly high. We were producing more and better goods and services with fewer total workers.
This …
Why the Fed’s Latest Interest-Rate Strategy Won’t Have Much Effect
Sterilized bond buying could help lower interest rates and boost the economy a bit without adding to inflation, but don’t expect a major impact.
Why A Stronger Economy Probably Won’t Translate Into A Raise — Yet
Last Friday’s jobs numbers came in strong, particularly in important areas like manufacturing, on which President Obama is staking much of the economic component of his re-election campaign. If voters start to feel more prosperous than they have over the last few years, it will certainly help him at the polls in November. But in order …
227,000 New Jobs Is Good. But Has the Economy Reached Escape Velocity?
Economy watchers talk often about economic recoveries requiring a “virtuous circle.” In such a scenario, job growth leads to higher wages and increased consumer demand, which in turn leads to more job growth.
Jobs Numbers and the Economics of Emotion
Consumer confidence is up, and the new jobs numbers — the U.S. added 227,000 jobs in February, the third straight month of 200,000-plus gains — show that the U.S. economy continues to improve. Does that mean we are going to finally start seeing a shift out of the era of fearful, volatile markets that we’ve been in for over three …