The Sahm rule indicates that the US is in the midst of a downturn, but it’s not quite there yet. The US is not in a recession, despite the indicator bearing my name saying that it is. The Sahm rule, which was triggered with Friday’s weaker-than-expected jobs report, joins a long list of economic tools skewed by the unusual disruptions of the ...

Rising prices make Americans gloomy about the economy, even if they're not climbing as fast as they used to. The people who experience the US economy continue to disagree with the people who measure it, and the most likely reason is inflation: Most Americans still see it as a major problem, while most economists don’t. But this debate ...

Rising unemployment rates in places such as California, New York and New Jersey may seem dire but actually reflect economic strength. The United States has been under a “recession warning” for two years now. And after a brief lull as we entered 2024, the alarms are sounding again. It’s not the usual suspects of an inverted Treasury market ...

The White House’s talking points on its economic policies are far too narrow to showcase what they have accomplished. Despite the economy enjoying its best non-pandemic era back-to-back quarters of growth since 2014, the Biden administration continues to struggle to come up with the right words to promote the successes of “ Bidenomics.” And ...

Chair Powell has taken March off the table for the first rate cut, implying that the Fed wants at least nine months of good inflation data before even considering cutting. Nothing else matters. Above the paywall, today's post discusses the Fed's backward-looking, inflation-only approach. Below the paywall, I discuss the level of the ...

The central bank won’t use monetary policy to influence the race for the White House, but it will seek to ensure that its current powers remain after the election. In an interview with 60 Minutes that aired Sunday, Federal Reserve Chair Jerome Powell was asked “to what degree does politics determine your timing” of when to reduce interest ...

The jobs market is the most important cushion against any policy mistakes the Federal Reserve might make. In 2024, the eyes of market participants will be focused intently on the Federal Reserve. The two key questions are when will the central bank cut benchmark interest rates from their highest levels since 2000 and by how much? As much as ...

Declining response rates to official surveys raise the possibility that government and central bank officials have been making decisions based on flawed data. The pandemic upended many of the things we thought we knew about the economy. Even now, economists struggle to answer such fundamental questions as whether Americans are better ...

The highly accurate Sahm rule uses the unemployment rate to detect the start of an economic downturn. But like many indicators during the pandemic era, it’s possible it could “break.” Alarm bells sounded Friday when we learned that the US unemployment rate rose to 3.9% for October, well above the 50-year low of 3.4% that it hit earlier in ...

The misery index was twice as high in the 1970s than it is now, yet consumers report hearing negative things about the economy at a much greater rate. Social media is partly to blame. US consumer spending surged at a 4% annual rate last quarter even after accounting for inflation– and inflation is rapidly slowing. But say anything good about ...

Central bank’s Summary of Economic Projections may have spurred recent rises in Treasury yields. In the past month, there has been a significant shift in the views of investors on where interest rates are heading. The yield on 10-year US Treasury notes jumped half a percentage point, before a sharp retracing this week. High rates boost ...

Higher interest rates will do nothing to reverse the surging costs of basics such as meat or eggs. But shoring up the supply chain would help. It’s nearly impossible to have a conversation about inflation without mentioning food prices. And no wonder, as they are up 24% since the start of the pandemic and account for one-sixth of the increase ...

The main beneficiaries of the US government’s current program are colleges and universities. Amid the debate over student loans — President Joe Biden’s administration tried and failed to forgive some of the debt, which starts accruing interest this month after a three-year pause — a crucial question has often been overlooked: Who benefits the ...

If the Federal Reserve fails to account for the drop in household liabilities, it risks making the wrong call on rates. Even with elevated consumer prices and high borrowing costs, Americans continue to spend at a solid clip, complicating the Federal Reserve’s efforts to tame inflation. One reason that central bank officials cite for ...

Summer Heat Is Becoming a Big Drag on Productivity. Natural disasters such as the deadly fires in Maui are tragic in terms of lives lost. But that doesn’t mean we shouldn’t discount the economic damage, which is often substantial. In a typical year, the highest human and economic cost from natural disasters is tied to high temperatures even ...

The White House’s economic policies are designed to help the economy weather rough patches down the road rather than produce an immediate payoff. Just how good is the economics in Bidenomics? The Biden administration is in full PR mode, crisscrossing the country to promote the president's economic policies. These include the Infrastructure Act ...

Some 15 million Americans are about to lose their health-care insurance after a pandemic-era federal program providing such benefits expired. Reforming the enrollment process would cushion the fallout. Last week saw a win and a loss for health care. North Carolina became the 40th state to expand Medicaid under the Affordable Care Act. That's a ...

Discussions about how to make banks safer for customers should also include how to make them more inclusive for the 25 million Americans that rely on risky alternative financial service providers. Since the failure of Silicon Valley Bank, we have heard a lot about deposit insurance and whether our money really is safe being left at a bank. ...

In a tight labor market, overlooking those who can work but face obstacles comes at a steep cost to the economy. At a time when some 10 million US jobs are unfilled, Covid-19 still lingers and the workforce is aging at an alarming rate, it's never been more urgent for employers to strengthen their resolve to hire and retain workers ...

Management of demand is not efficient in dealing with supply-driven price rises: fiscal policy must play its part. The Federal Reserve is the only institution in the US with an official mandate to maintain stable prices. Even so, the Fed is not the only institution we need to help fight inflation, especially given the supply disruptions from ...

Action to tackle inflation and protect workers should not be based on outdated economic thinking. Some commentators argue that the US needs a recession to bring inflation down. That thinking hinges on a simplistic model of the economy and a refusal to see Covid and the war in Ukraine as important sources of inflation now. The stakes are too ...

Ending federal enhancements to jobless benefits will not be enough to meet employers’ hiring needs. Concern that something is holding back U.S. workers from taking jobs along with anecdotes from employers having trouble hiring has accelerated a trend among state governors to end federal enhancements to jobless benefits this month — three ...

The Cares Act will be expiring soon, hurting those who have been without a job the longest the most. Lost in the latest economic headlines touting the rebound is the fact that some 1 million more workers last month were out of work for more than 26 weeks, joining a group referred to as the long-term unemployed. That historic jump offset some ...