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
Like the impending death of Mark Twain, the recent commentary suggesting that this economic expansion has lost its life is considerably overstated. Much has been said about the uptick in new claims for unemployment insurance, shown in the chart below, and its link to the restoration of restrictions by many governments in response to the … Continue reading The Demise of This Expansion is Greatly Exaggerated
The recent news on retail sales and job claims, along with renewed outbreaks of COVID-19, seem to be suggesting that we are in for a long, dark winter. The zip in the economy seems to be gone. However, it is worth putting recent developments in perspective. The economy still has forward momentum. Recall that the … Continue reading The Ins and Outs of This Recovery
Many analysts are worried about the recovery losing steam, especially in the face of renewed outbreaks of COVID-19 and the absence of more fiscal stimulus. Yet the unemployment rate fell to 6.9 percent in October, down nearly 8 percentage points from its peak six months earlier in April. To put this information in perspective, it … Continue reading Has the Recovery Topped Out?
While income redistribution has always been a hot topic, the debate has become more intense in recent years. In part, this has reflected stagnation in median family income. Also, standard measures of income distribution had been showing growing inequality in the distribution of income. However, inequality decreased and median family income improved in 2018 and … Continue reading Redistribution: Votes Versus Income Shares
Analysts seem divided on where the economic recovery from the COVID shock stands. Some see recent news to be pointing to a still-vigorous expansion—a “V”-shaped recovery. But others read the news, including new COVID outbreaks, to be suggesting that the expansion is stalling out or even receding—that is, a “W” is unfolding. Putting the various … Continue reading The Economy: How Are Things Looking Now?
Headlines have stressed that payroll employment growth slowed again in August and that the decline in new claims for unemployment insurance stalled out. Does that mean that the economic recovery that began in the spring is fizzling out? Or is the economy rolling on? It is worth noting that that the August gain in employment … Continue reading The Economy: Rolling On
Initial claims for unemployment insurance jump and universities shut down campuses and return to all on-line classes—news pointing to a setback for the economy. In contrast, existing home sales surge and the stock market moves into record territory—news pointing to an ongoing rebound from one of the sharpest declines in history. What does it all … Continue reading The Economy: Sorting Through the Pluses and Minuses
“A billion here, a billion there, and pretty soon you are talking about real money.” Attributed to Senator Everett Dirksen (Illinois) One wonders how Senator Dirksen might react to the current federal budget outlook, given the nearly $3 trillion of red ink that has been spilled so far in the 2020 fiscal year and the wrangling … Continue reading A Trillion Here, a Trillion There: How Will the Federal Debt Problem Get Resolved?