The recent news on the economy, especially on the labor market, is confirming that a head of steam is building. Fortunately, the upbeat news has extended to the sectors hit hardest by the pandemic (owing importantly to fear and governmental restrictions)—notably, hotels, restaurants and bars, entertainment, and airlines. As noted in previous commentaries, the economic … Continue reading The Economy: What Can Slow This Train?
Although the statistical evidence has yet to provide widespread confirmation that the economy is accelerating, there is a growing list of indicators that point to an imminent boost to economic activity. To a degree, the upturn has been restrained by disruptions from supply chain difficulties and unusually severe winter weather in key portions of the … Continue reading The Economy: There’s Plenty of Fuel in the Tank
Ideology: A manner or the content of thinking characteristic of an individual, group, or culture The integrated assertions, theories and aims that constitute a sociopolitical programA systematic body of concepts especially about human life or cultureVisionary theorizing Faith: Allegiance to duty or a person Fidelity to one's promisesSincerity of intentions acted in good faithBelief and trust in and … Continue reading Ideology Versus Faith
Much has been said about the slowdown in the economy in the final months of 2020 and the beginning of 2021. Employment gains averaged only 30 thousand per month over the months of November to January, compared to nearly 1 million per month over the previous three months. In contrast, growth in industrial production—mostly tangible … Continue reading The Economy: The Pause is Ending
Anemic job gains in January and stubbornly high new claims for unemployment insurance have led many to conclude that the economic recovery has stalled out and that more fiscal stimulus is needed to jump start the economy. It should be noted that the employment report for January contained some encouraging signs, and the economic fundamentals … Continue reading The Economy: Spring is Just Around the Corner
Are you exhausted from watching the craziness in the market for GameStop stock and a few other companies? Are you upset by the decision of some brokerage firms, most notably Robinhood, to restrict trading in GameStop and a handful of other stocks? Are you fascinated by the story of David (small investors) versus Goliath (hedge … Continue reading Frenzy in the Market: What’s Going On?
The era of ultra-low interest rates is upon us and is likely to remain for a good while (see Buoying the Economy: An Era of Ultra-Low Interest Rates, July 13. 2020 and The Fed’s New Game Plan: Radical?, August 31, 2020). The Fed has committed to keeping its target for the policy interest rate—the overnight … Continue reading The Impact of Ultra-Low Interest Rates
The economic news of late—retail sales, labor market data—and the COVID-19 outbreaks and tighter restrictions has been somewhat discouraging. Many have concluded that the recovery has come to an end, and more fiscal stimulus is needed. The incoming president is proposing nearly $2 trillion in new stimulus—on top of the $0.9 trillion recently enacted. Such … Continue reading More Fiscal Stimulus Justified? A Contrarian View
THE NATIONAL ECONOMY: RECOVERING FROM THE COVID-19 SHOCKDownload Presentation
The start of the year is a good time to take stock of where the economy has been and where it is headed. The COVID-19 shock in early 2020 led to the sharpest contraction in output on record. The table below shows that real GDP plunged 9 percent in the second quarter (at a quarterly, … Continue reading Taking Stock of the Economic Recovery