Archive for July, 2010

What can we say about today’s GDP report? Not much that hasn’t already ben said: the economy is slowing down quite quickly. Growth in the second quarter fell to 2.4%, compared with 5.0% in the last quarter of 2009, and 3.7% in the first quarter 2010. That’s fairly dramatic and a much more rapid slow… »

Just a quick note on today’s news:
Consumer confidence continues to drop. The Conference Board report today has confidence at 50.4 in July, down from 54.3 in June and the lowest level since February. The standard explanation for this steady erosion is that unemployment weighs heavily on the minds of everyone. I put a slightly different… »

I see from today’s testimony before Congress, that Ben Bernanke promises the Fed ‘will act’ if the economy underperforms.
Ummm.
The economy is already underperforming.
So: when will the Fed… »

In view of the ongoing, and fraught, discussion about austerity measures and their effect, I thought I would present the theories underlying the two sides of debate.
Basically we are going through a rehash of the Orthodox versus Keynes argument that has been an episodic moment for decades. That it remains unresolved is testimony to the… »

Today’s report of a jump in claims for unemployment assistance – by 37,000 to a total of 464,000 – is both disappointing and salutary. Yet expected.
The declines of the past two weeks had been given an artificial boost by the auto industry’s policy this year of not shutting down for a summer break. This created… »

This morning’s Financial Times is a must read.
It contains an excellent point/counter-point about the austerity argument now raging. The pro-growth argument is spelled out by Brad DeLong, while the austerity point of view is argued by Niall Ferguson. In this discussion DeLong is wearing the white hat.
Ferguson’s use of numbers is flat out dumb for… »

Just a quick note.
I received the Bureau of Labor Statistics press release on wages this morning and one thing jumped out at me: during the second quarter average [median] wages rose to $740 a week. That’s up 0.8% on last year. But inflation rose 1.8% over the same time. This means that real wages –… »