New NYT: CPI was super hot. But core was relatively tame. Two huge one-time factors raising inflation: tariffs & Iran. Fed can't solve them because they're not about excessive demand. Only Trump or time can solve. Now the usual wonky thread I didn't have time for before.

Inflation was very high in February (pre-Iran data). Core PCE annual rate: 12 months: 3.0% 6 months: 3.4% 3 months: 4.4% 1 month: 4.5% FWIW, much of the increase was highly concentrated and idiosyncratic.

Glad to have joined with a great group in stating the obvious: the U.S. is not facing fundamental international payment problems & tariffs are not required to deal with a “large and serious US balance-of-payments deficit.” So the administration's use of 122 for 10% tariffs wasn't justified.

Huge congratulations to @ludwigstraub.bsky.social for winning the Clark Medal. He is not only brilliant and original, he is also at a commensurate level in kindness and humility.

The EV tax credit that was terminated by the One Big Beautiful Bill Act was $7,500. The gas price increase--if sustained--is about $500 (per car per year).

Can someone please do this for Boston? tbhochman.github.io/dc-waymo-das...

The job market continues to be reasonably good (for an aging workforce with low net immigration). 178K jobs in March, much a bounceback from strikes and weather that resulted in -133K (revised) in February. The three month average is 68K. Urate ticked down to 4.3%.

If you have access to the NY Times, this is an interesting article on manufacturing jobs. @jasonfurman.bsky.social www.nytimes.com/2026/04/02/o...

Ed Glaeser, Amy Tomasso and I discuss housing with Samantha Laine Perfas in a great podcast discussion. harvard-thinking.simplecast.com/episodes/hou...

Four theses on tariff impacts: 1. Evidence clearly shows they've added 0.5-1.0pp to inflation. Evidence consistent with them subtracting from growth. And no evidence they've done anything good for manufacturing or trade deficits (but they have raised revenue).

Trump's "Liberation Day" tariffs have not created manufacturing jobs. Smart economic strategy would stop measuring success by the number of assembly lines reopened & start focusing on what raises living standards: productivity, affordability and overall economic growth. by @jasonfurman.bsky.social

Thursday Data: Comparing hourly earnings across several sectors. @jasonfurman.bsky.social @nytimes.com

My @nytopinion.nytimes.com piece discusses the failures of Trump's strategy to create manufacturing jobs--but puts it in the broader context of the previous failures to achieve this goal and why it isn't the right goal to start with. www.nytimes.com/2026/04/02/o...

On his terrific Substack @pkrugman.bsky.social has oil scenarios. Is basic economics. But the market thinks ~50% of the probability mass is below the lowest value in this table, ~20% is above the middle and ~0% is above the top. Why the disconnect? paulkrugman.substack.com/p/the-oil-cr...

We were beyond thrilled to welcome Jay Powell to Ec10 today for a conversation with my co-teacher David Laibson and an excellent set of questions from our students. Here's the class photo. Link to the talk in the next.

One thing I enjoy at the NYT is responding to some of the reader comments (sadly only a tiny fraction), you can read it here. A number of other authors do the same so look out for them when you see the author photo in the comment box. www.nytimes.com/2026/03/18/o...

Remember when oil topped $150/barrel in the wake of the 2011 Libya strikes? And stayed above that price for most of the next 2 yrs? OK, you may not remember because you probably weren't thinking about oil in 2026 prices back then. But if you were that's what you would have seen.

The FOMC's forecast revisions were tiny compared to the images we're seeing from the Middle East.

New piece in @nytopinion.nytimes.com arguing that the economy since Trump took office looks an awful lot like the economy in the year before he took office. www.nytimes.com/2026/03/18/o...

The PCE-based ecumenical underlying inflation measure was 3.2% in January. This is the median of 24 numbers: 8 concepts measured over 3, 6 and 12 months.

January was another hot month for PCE inflation (we're getting these data two weeks later than usual due to shutdown). Annual rates for core PCE: 4.5% 3.7% 3.1% 3.1%

Fourth quarter GDP revised down to a 0.7% annual rate (originally 1.4%). Broad story still consumption reasonably strong, investment mixed and huge volatility in net exports. And shutdown subtracted ~1pp from growth, something that will be added back in Q1.

Over the yr through February we saw large price increases (e.g., meat +8.6% & electricity +4.8%) & declines (eggs -42.1% & gas -5.6%). This type of dispersion may seem difficult to manage. It's also normal. If anything, it is a bit less than the median dispersion since 1990.

A relatively tame CPI for February which is, of course, the before times. Annual rates for core: 1 month: 2.6% 3 months: 3.0% 6 months: 2.3% 12 months: 2.5%

The Wealth of Nations - 250 years today "imports are source of real benefits to consumers & trade expands the division of labor, raising productivity." "kept the focus where... it belonged: on improving the lives of ordinary people." @jasonfurman.bsky.social www.nytimes.com/2026/03/09/o...

On the 250th anniversary of Adam Smith’s most important book, the right reduces him to “laissez-faire above all,” writes Jason Furman. Liberals “dismiss him as a highbrow spokesman for naked, antisocial greed. The truth in both cases is more interesting.”

At a moment when faith in markets is fraying & faith in governments is strained, Smith’s message is neither to worship the invisible hand nor to wish it away. It is to discipline power, defend competition & keep focus where he always insisted it belonged: on improving the lives of ordinary people. 💯

Happy 250th birthday to Adam Smith's Wealth of Nations! Some thoughts from me (more later). www.nytimes.com/2026/03/09/o...

Jobs report uniformly weak: 92K jobs lost (with job losses in almost every industry), household survey employment down too, unemployment rate up to 4.4%, participation down, avg weekly hours flat. Main sign in the other direction was strong wage growth.

Are we finally seeing AI in the productivity data? A big upward revision to earlier data and strong Q4 bring us 2.2% above CBO's pre-pandemic forecast. Annual rates: 1 year: 2.8% 2 years: 2.5% 6 years: 2.2%

The tariff refund issue is fun to follow. But it doesn't matter much for the macroeconomy. Business investment determined more by cost of capital than cash availability. Keynesian multiplier very low on one-time transfers to businesses. And debt impact large but only one-time.

Two articles today on AI. One by @jasonfurman.bsky.social linked below (where you will be greeted with a snarling picture of the author) and the other by @matteowong.bsky.social in The Atlantic, a link in the replies. I'm somewhat of sceptic, but I admit I use the OpenAI API quite regularly.

"A.I. competition is delivering rapid innovation, falling prices and real choice at a pace few expected," Jason Furman writes. "Over time, policy will need to adapt to protect users, preserve competition and spread the gains."

My latest @nytopinion.nytimes.com is about how AI has defied what many--including me--would have thought and has ushered in a new era of fierce competition in the digital space. The result is innovation, falling prices, consumer benefits, and more. www.nytimes.com/2026/02/25/o...

Here are my probabilities and the average of the 23 responses I tracked across social media channels. Note my mean is about 2.3% (using a slightly finer and more approximate distribution within the cells).

Checked who it was. Turns out I shouldn't have been surprised: It was the amazing @jasonfurman.bsky.social. You can hear this episode of @galendruke.bsky.social podcast in the link below. They cover everything from Trump tariffs to taxes on the rich, housing, the new Fed Chairman, etc. #Recommend

I wrote down my probabilities and will share them later. What are yours?

How much are you willing to reduce spending on poor children to tax billionaires more? A utilitarian would raise taxes on billionaires basically to the revenue maximizing rate. IF you think billionaires are a negative externality then you would go even higher. A 🧵 .

In 2025 21 million people were laid off or discharged from their jobs. That is up from the last few years but less than any year from 2000-2020 (when the workforce was smaller). Recent increase most likely a normalization from the abnormally low layoffs post-pandemic.

A fun(?) 🧵 on how nerdy government accounting rules had a big impact on Q4 GDP. And how they reflect how wasteful the 43-day government shutdown was. TL;DR: Small reduction in nominal federal spending in Q4. But a big decline in what we got for our dollars. So real down a lot.

I would call this "Liberation Day" except the term is already taken. Other ideas?

A thrilling victory for the rule of law. And even better that the rule of law will mean better economic outcomes for America and the world.

Real GDP rose at a 1.4% annual rate in Q4. But the "truth" is better because shutdown-induced real Federal spending cut subtracted 1.15pp. Expect much of that to be added back in Q1. Consumer spending (+2.4%) and business fixed investment (+3.7%) both pretty good.

A strong finish to the year for core PCE inflation. And not "strong" in a good way. Annual growth rates. 1 month: 4.3% 3 months: 3.1% 6 months: 2.9% 12 months: 3.0%

More than *all* of the jobs added over the last year have been in private education & health services. Total jobs: 359K Private education & health services: 773K All other sectors: -414K This might look surprisingly unbalanced. It's actually the opposite. A 🧵

Calling the job market as "frozen" sounds pejorative. One data point supporting this: the hiring rate is what it was in the Great Recession. But separation rates also near the lowest on record, as are layoff/discharge rates. Should we call the job market secure?

The CPI-based ecumenical underlying inflation measure was 2.1% in January. This is likely depressed a bit by BLS measurement issues during shutdown. My judgment still remains ~2.5%. (Note, I did the median of the 4-month, 6 month and 12 month measures.)

After this week's employment & inflation data it is starting to look like the elusive soft landing may finally happen. Would be the first indisputable US post-WW II soft landing. We've had false hopes before dashed by the underlying economic dynamics & tariffs. So we'll see.

Core CPI inflation rose during the month of January. But it fell and was relatively muted over longer periods of time--although still some concern the numbers a bit lower due to shutdown-related quirks. Annual rates: 1 month: 3.3% 6 months: 2.5% 12 months: 2.5%

CBO is mostly dismissive of the effects of AI on productivity growth (overly so IMHO). They expect *slowing* potential labor force productivity as the modest AI boost to TFP is swamped by the reduction in capital services. I would take the over on their 1.8% LR GDP forecast.