Jobs numbers, per ADP. Back in the black but not by much--and 3-month moving average basically zero.

If average work hours per person fall dramatically in the future due to AI is that more likely to be because: 1. AI substitutes for labor, market-clearing wage falls below zero, people not hired. 2. AI complements labor, wages rise, income effects so people don't work as much.

I am also ranking Burhan Azeem as my #1 choice. I agree with everything Josh says. And I've also personally been really impressed with Burhan's amazing combination of commitment to Cambridge, deep thoughtfulness about the issues it faces and pragmatism and inclusiveness in his approach to them.

I am also ranking Burhan Azeem as my #1 choice. I agree with everything Josh says. And I've also personally been really impressed with Burhan's amazing combination of commitment to Cambridge, deep thoughtfulness about the issues it faces and pragmatism and inclusiveness in his approach to them.

People post too many memes.

Being an Anglo-Saxon country not great for borrowing costs right now.

This graph may or may not say a lot about the world over the last decade.

CEO pay has stagnated for the last quarter century.

Fixed by John Cambpell & Tarun Ramadorai is an important book--drawing on up-to-date research, grounded in experience in the US, UK and India, argues persuasively for more consumer finance regulation--an issue that has almost entirely faded from the debate. www.goodreads.com/review/show/...

The CPI-based ecumenical underlying inflation measure was 2.7% in September, up 0.1pp from August (and the same as the PCE-based measure for August). This is the median 7 concepts over 3, 6 and 12 months. My own judgment is closer to 2.5%, maybe a tiny bit below.

The Federal minimum wage was established in 1938. It was in effect for about 85 years. It has now, for better or worse, been effectively abolished.

If you call a bubble early you're not prescient, you're wrong. If you bought the stock market on the day Alan Greenspan announced "irrational exuberance" you would have made money no matter what day you ended up selling. (Don't @ me about inflation adjustment.)

The government made the reasonable decision to release CPI data because needed to calculate Social Security COLAs. Quick summary, core CPI annual rate: 1 month: 2.8% 3 months: 3.6% 6 months: 3.0% 12 months: 3.0%

The stock market is not the economy, Part 387 Productivity growth is often lagged, Part 129 Productivity growth before and after the dot.com bust

I discuss bubbles, the macroeconomy and more with Ross Douthat. www.nytimes.com/2025/10/23/o...

CBO is as good as it gets. But the world is hard to predict.

If you're not surprised & puzzled about Treasuries being <4% then you're either a seer, incurious or have better things to wonder about. Large deficits (albeit smaller than expected), capital demand, Fed independence risk, persistent inflation, uncertainty, all go the other way.

Three months ago I was wondering why jobs were so strong while GDP was so weak. Now with additional data and revisions I'm wondering the opposite. As always would place more weight on data messiness than any structural explanation (e.g., productivity, frozen labor market, etc)

According to official government data the unemployment rate was unchanged while the economy added 60,000 jobs in September. In Canada.

The other day a student asked me about the prevalence of insider trading in prediction markets. I now have an answer.

Core PCE inflation rising lately, running ~3% annual rate. But core PCE inflation ex portfolio services slowing lately, running just above 2% (when remeaned to reflect it usually runs low). Some of the reinflation we've seen is rising stock prices counting as higher inflation.

In 2000 & 2016 the Dems won the Presidential popular vote but lost the electoral college. Just chance the opposite hasn't happened. Eg 2004: Kerry came closer in the EC than the popular vote. This is the pop vote vote margin Dems would have needed in past elections to win EC.

Do you prefer Option 1 or Option 2? And why?

"In one respect, Breakneck is a classic work of a hedgehog. Dan Wang knows one big thing: China is run by engineers, and the United States is run by lawyers. He then applies that idea to many topics..." My review of the excellent Breakneck. www.goodreads.com/review/show/...

The United States ended FY 2025 with $30.287 trillion of debt. That is likely 99.9% of GDP, up from 98.2% last year. Note CBO's January forecast was 99.9% of GDP. In June CEA projected that if OBBBA passed it would fall to 96.2% of GDP this year.

Office hours today: Student 1: Last summer I got to visit the New York Fed. Student 2: I've visited eleven of the twelve regional banks--but I still haven't been to Dallas. (And this is in a principles of micro class. Oh, and student 1 added she had been to Cleveland too)

If you ask small businesses about job creation plans, job openings, inventory plans, earnings or capital expenditure plans they're much more dour than they were a few years ago. But they express much more optimistic about the future than before. www.nfib.com/wp-content/u...

New from me @mollykinder.bsky.social Josh Kendall and Maddie Lee: how should we be tracking the impact of AI on the labor market? Tldr: no signs of major disruptions yet, but we plan to update our trackers monthly 1/

Lisa Cook case set for oral argument in January. She stays in place until then.

During what turned out to be a 13 day government shutdown in October 2013 CEA released a report that projected 120,000 private sector jobs lost. It ended up being 227,000 private sector jobs gained--even more than any of the prior four months.

Desperate times call for desperate measures. So I'm posting the ADP data.

A slight majority of economists think tariffs have been less inflationary than expected (I was in the minority here). A plurality expects an additional 0.1-0.5pp of inflation (I'm in the plurality here). kentclarkcenter.org/wp-content/u...

Fertility rates are way below what the Social Security Trustees projected in both 2000 and 2010. And yet they have barely updated their long-run forecast. What's the best argument for the plausibility of their forecast?

Investment in information processing equipment & software is 4% of GDP. But it was responsible for 92% of GDP growth in the first half of this year. GDP excluding these categories grew at a 0.1% annual rate in H1.

The PCE-based Ecumenical Underlying Inflation Measure was 2.7% in August, unchanged from July. Is the median of 24 measures (8 bases over 3, 6 & 12 months). FWIW, my judgment is underlying inflation more like 2-2.5% as many/all of the inputs to this suffer from the same issues.

Core PCE inflation well above target for the 5th month in a row. But, the situation less concerning than it looks (at least for the Fed) but some clearly transitory tariffs & imputed stuff. Annual rates: 1 month: 2.8% 3 months: 2.9% 6 months: 2.5% 12 months: 2.9%

Bernanke, Cochrane, Greenspan, Mankiw, Paulson, Rogoff, Romer, Rubin, Summers, Yellen, etc & me: "allowing the removal of Governor Lisa D. Cook while the challenge to her removal is pending would threaten that independence and erode public confidence in the Fed." www.supremecourt.gov/DocketPDF/25...

A big upward revision for GDP, was a 3.8% annual rate (up from 3.0% in the advance estimate). For H1 GDP up at a 1.6% annual rate. The biggest change was consumption which was 2.5% annual rate (up from 1.4% in the advance). Business fixed investment strong, residential weak.

Nothing would advance the Abundance movement more than inventing and popularizing a version of Monopoly where the more houses you build the more rents become affordable.

Price discrimination often framed as unfair high prices. Although the kicker to the story had another frame: "When Delta and, to a lesser extent, United retreated from this strategy, they simply raised prices for multiple-passenger bookings to match their single fares."

USA!

My thoughts on the Fed, macroeconomy, tariffs and more in conversation (and debate) with Larry Summers, Oren Cass and Rebecca Patterson. www.nytimes.com/2025/09/18/o...

A useful account from CBO about why revenue exceeded their post TCJA forecast (from Apr 2018). TL;DR: it was because both inflation & real GDP growth exceeded their forecast. And they attribute that real GDP surprise to immigration and pandemic stimulus not the TCJA.

Core CPI was 3.6% annual rate over last 3 months. That would put it at the 98th percentile of 1992-2019 experience. That's the problem we've had for the past few yrs. Inflation about average for good stretches. But during bad stretches it's almost off the carts. Avg is too high.

The core inflation rate increased for the fourth straight month. Annual rates: 1 month: 4.2% 3 months: 3.6% 6 months: 2.7% 12 months: 3.1%

The latest jobs numbers, assuming the 911K preliminary downward revision for the yr ending Mar 2025 were spread evenly across the previous 12 months. We'll get actual revised numbers in Feb & they could be a little better than this (and distributed differently by month).

My thoughts on the jobs numbers in the NYT. Short version: They largely reflect an abrupt slowdown in labor supply (due to immigration restrictions) combined with a continued very gradual weakening in labor demand. The Fed can help but can't get us more workers. www.nytimes.com/2025/09/05/o...

The PCE-based Ecumenical Underlying Inflation measure is out for July. It was 2.7%, up from earlier in the year. This is the median of 8 concepts each over 3, 6 and 12 months--all remeaned to match the PCE. FWIW, my own judgment is a touch lower than this.

The core PCE inflation rate increased for the fourth month in a row. Annual rates: 1 month: 3.3% 3 months: 3.0% 6 months: 3.0% 12 months: 2.9% But two reasons to be less worried than headline: (1) transitory tariffs & (2) some of this is imputed from rising stock market.

My thoughts in the NYT on where we stand now with the Fed. www.nytimes.com/2025/08/26/o...