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Edward Lazear, chairman of the White House Council of Economic Advisers, had this to say yesterday about the admiinstration's updated economic forecast.
The other thing I would point out is the job growth at 130,000 or so is a very good number, very positive number, especially when you're at a position where you're basically at full employment. So again, I think that this is a very tight labor market. It's being reflected not only in terms of jobs. It's being reflected in layoff rates, which are at an all-time low since we've been collecting the data. It's being reflected in wage growth. So all of this seems to signify a very strong and tight labor market.
Here's the full forecast. The admnistration expects that between the fourth quarter of 2006 and the fourth quarter of 2007 jobs will increase at an average monthly rate of 129,000. That adds up to 1.548 million new jobs.
Sounds impressive. But the U.S. has a very large base of payroll jobs: 135.844 million in October, according to the Bureau of Labor Statistics. In other words, the administration expects the number of jobs to rise in the next year by 1.14 percent. Woohoo! Compared to job growth in the 1990s, that's quite lame.
Posted by dan at 02:08 PM
Energy prices are down, right? And that means inflation is under control, right? Not necessarily. First, there was UPS's announcement that prices would increase 4.9 percent for 2007. Now, comes news that one of my local lunch places is jacking up soup prices by about 10 percent:
Due to an increase in almost all of our raw ingredients, as well as fuel surcharges that have been passed on to us by our vendors, we are forced to raise some of our prices. As of Tuesday, Oct. 24th, the price of a pint of soup will be $6 and a quart will be $11. We must do this out of necessity and apologize for any inconvenience.
Posted by dan at 11:46 AM
Since last week's benign inflation report, there's been a great rush to declare the currency-debasing monster dead, slain, pushed back into his dank cave. Effective and highly efficient logistics companies are one of the big forces that have helped keep inflation in check. In recent years, they've absorbed higher fuel costs and, by continually investing in efficient systems, allowed companies to manage their supply chains and inventories more effectively--all of which boosts productivity, benefits consumers, and keeps inflation in check. Except when it doesn't.
UPS just jacked up rates by 4.9 percent for 2007 ground and air express shipments.
Posted by dan at 09:26 AM
My latest in Slate, on the declining supply of U.S. stocks.
Posted by dan at 08:17 AM