Why do economists care about inequality in incomes and wealth? 1) Inequality tends to dampen overall economic performance. One of most immediacy effects is on consumer spending. Low-and middle-income households spend a larger percentage of each dollar that they earn when more spending is in…

Wealth has become more concentrated among the top 0.1% - 10% of households. This data is from the @federalreserve Top 10% hold a whopping 67.4% of all wealth in the US as of the second quarter. Bottom 50% hold 2.5% - mostly in their home.

Highly educated women w/children under five are dropping out of the labor force and 2X pace of less educated women, reversing post pandemic trend. My colleague Matt Nestler’s work on what reason reveals escalating childcare costs as a major factor. Women w/high school or less are cutting hours.

New from ADP and Nela Richardson “…And by August 2025, the gap was nearly 5.3, or 530 percent, close to the record hit in May 2025. In short, even though their pay continues to grow faster than that of other cohorts, the lowest-wage workers continue to lose ground” Why do we care?

Powell corralled the cats & achieved an unusual amount of unity amidst a high level of uncertainty about the outlook. The Fed cut by a quarter point, but there was only one dissent by newly appt Gov Miran, who wanted a more aggressive half percent cut.

9/11. 24 years & cancer but I am still here. Time is best shared instead of spent. Random acts of kindness are underrated. Break bread not ties. Be kind; pay it forward. Thank you to those who remembered. Touched. ❤️‍🩹

Producers prices reveal margin compression, consumer prices moving higher. That is what the Fed forecast would happen in 2025. Proven harder to live with increases in inflation & unemployment in real time. Goods and services both risking, with affluent households buoying travel costs.

Birds of a feather no longer flock together. The Fed and whether we are about to see a rate cutting cycle unfold. Debate within the Fed’s leadership is spilling out into the open. kpmg.com/us/en/articl...

The US trade deficit nearly doubled with China in July, the most recent month for data. Read about the US trade situation more widely here in analysis written by senior economist Meagan Martin-Schoenberger at KPMG. kpmg.com/us/en/articl...

Cracks in the labor market are deepening, said Diane Swonk chief economist of KPMG US. #nonfarm #payrolls

Cracks in the labor market are deepening, said Diane Swonk chief economist of KPMG US. #nonfarm #payrolls

The overall labor market is starting to seize up, said Diane Swonk chief economist at KPMG US.

No question they (Fed) will cut a quarter point, said Diane Swonk chief economist with KPMG about the September meeting.

Labor market freezing those w/a job in place, those who want a job out. Long-term unemployment ballooned to highest levels since late 2021. Same with stress measure of unemployment, which jumped to 8.1%. Vacation leave dropped to second lowest August on record & half historic norm. Inequality worse.

Watch @YahooFinance at the top of the hour to hear labor economist @DianeSwonk @KPMG_US explain why the August jobs report came in so weak, and what she sees ahead.

A day to remember my dad who grew up near this beach. He loved the sunsets & the rare moments you could see Chicago. He left this earth this day in 2018. I will always miss you & carry your spirit with me. Be kind; pay it forward. Some things can be too short for this world. ❤️

Powell opens door to calibration in rates in September in Jackson Hole Speech. The challenge the Fed faces is to tame inflation, which has moved up again & been above the Fed’s 2% target for more than four years without too much additional weakening in the labor market.

Locked in and locked out. This article underscores a major structural shift in the economy I have been thinking about for some time now. We are losing mobility & with those shifts dynamism has dropped. www.wsj.com/economy/amer...

Good news. Inflation comes in as expected with more drag from shelter costs. Rents are cooling and hotel room rates continued to plummet in July. The sticking point is the Core CPI, which was up 0.3% but rounded to a 3.1% gain from a year ago. Highest since Feb.

From Wall Street Journal What could go wrong? Heard on the Street: The resilience of individual investors may signal something more than just misplaced optimism as a new generation of “buy the dip” investors is propping up the market

The number of Americans receiving unemployment benefits for at least a week rose to the highest level since late 2021, according to Labor Department data.

Watch PBS Newshour tonight to hear KPMG US chief economist Diane Swonk explain the latest twists and turns in the economic landscape.

Tapped into Ancient Astronomy for this month’s take on the economy. Sirius, the Dog Star, was once beloved to trigger the unbearable heat, lethargy, bad luck and uncertainty…seemed apt metaphor for economy as effects of tariffs start to show.

Listen to KPMG chief economist Diane Swonk explain to the Wall Street Journal why the economy feels OK, but cracks are showing. www.wsj.com/video/series...

Federal workers are down by 81K since the start of the year. Those losses largely reflect retirement amidst a hiring freeze. More to come on that front as severances lapse in the fall. @AtlantaFed had estimated that spillover effects to local ecosystems could hit 1.2M.

The employment cost index rose 0.9% in second quarter, matching the pace of the first quarter. That pushed overall compensation for civilian workers up 3.6% from a year ago, the same as the first quarter. The composition of gains shifted. Wages rebounded but benefits slowed.

ummer heatwave Today’s revisions for PCE index changes the narrative on inflation a bit. Upward revisions show more inflation in the second quarter and in June. The increase was driven by a jump in goods inflation.

Growth whipsawed by mother of all front running cycles. Underlying economy weak with inflation. Tough for Fed.

Wow. GDP whipsawed by tariff front running. Real GDP rebounded at 3% annualized rate in the second quarter after dropping 0.3% in the second quarter. That puts that average for the first half at 1.3%, less than half the 2.8% we saw in second half 2024.

EU tariff deal provides some sense of an end game on where tariffs will land, albeit short on details. The rise in tariffs by year end still stunning from below 3% at start of year to close to 20% by yearend. Markets have been relieved to see an end point in sight but have yet to price costs.

The mother of all front running cycles. Late last year imports starter to pick up, notably from China. The 2018 continued through the next administration but many firms rightly bet that it would escalate via much higher tariffs w/the president’s return. Gains were turbocharged as…

Inspired by a visit to the Cliffs of Moher.

My take on the structural shifts underway amidst trade tensions.

Listen to this podcast which features macroeconomist Diane Swonk from KPMG discussing Federal Reserve policy with well known Fed journalist Kathleen Hays. kathleenhays.substack.com/p/swonk-sees...

Tariffs as working their way into the inflation data. Brace for more in July. Coffee up double digit rate from a year ago. Eye opening.

Listen to Yahoo Finance now to hear KPMG's Diane Swonk on CPI and the interest rate outlook.

Periods of heightened uncertainty act as a tax on the economy. The more prolonged the uncertainty, the greater the tax. The effects are often not immediate but effect with a lag and can compound over time. The economy is but the study of collective human behavior.

What could go wrong? 😱 www.wsj.com/finance/stoc...

ADP payrolls dip 33K. The payroll data by ADP was revised several years ago. It no longer is meant to predict the official payroll survey that we see at the national level but does add valuable color to our read of the labor market. Hiring freezes and…

Powell confirmed…if not for tariffs the Fed would be easing now. So why is it hesitant to do so? Because the tariffs thus far are not a one and done phenomenon. They are ratcheting up with more in the pipeline, even with pauses. Same time, burn of pandemic inflation still stings.

New Dataset Maps Losses from Natural Disasters to the County Level 1996-2023 via New York Fed libertystreeteconomics.newyorkfed.org/2025/07/new-...

Spoke to Kathleen Hays about PCE data and the ongoing burn of early inflation due to high price levels. urldefense.com/v3/__https:/...

Consumer sentiment bounces off the lows we saw post tariff announcements but remain subdued with expectations about inflation lower but still extremely elevated. www.sca.isr.umich.edu

The personal income and expenditures report was gut wrenching. Income tumbled along with spending as the surge in retirees rushing to to get to tap Social Security payments last month reversed. That pushed overall incomes down 0.7% and more than reversed the gains of April.

Nice summary of the economic consequences of surging uncertainty and its different forms by Federal Reserve. Underscores the lags implicit - the bulk of the effects of uncertainty on everything from inflation to trade policy & geopolitical work with a significant lag but can be costly.

Great read on Iran.

A $10 per barrel increase in the price of oil is equivalent to about 25 cents per gallon of gas. The CPI effect is about 0.2% but there are secondary effects if oil price remain elevated on the supply chain. Those increases are in addition to a surge in shipping…

A $1 increase in price of oil translates to a 2.4 cent increase in prices at the gas pump. Steel tariffs increase cost of US drilling a potential for waivers for crude oil. Cuts to renewable tax credits trigger bankruptcies, which could exacerbate jump in energy costs.

Fire & Ice The economy has entered a new phase. The labor market and inflation have cooled in response to a surge in uncertainty and tight credit conditions, while the inflation induced by tariff and potentially higher oil prices is still ahead of us.

This was not a very dovish forecast by the Federal Reserve: Growth weaker BUT inflation & unemployment both higher. The Fed dropped the mention of the upside risks to inflation & unemployment b/c it changed its forecast. The # participants expecting NO cuts ⬆️ to 7 from 4.