Joined January 2025
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Jun 10
Higher inflation &slower wage growth are driving down real wages. That's both tough micro--pushes the wrong way on affordability--and macro, re cons spend from broad mid-class. Yes, upper-leg of K can drive a lot of spending, but that's a narrow source.
econjared.substack.com/p/may…
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STRONG jobs report. Payrolls up 172K (twice expectations), revisions add 93k to Mar/Apr, LFPR's tickup for prime-age, broader job-gain diffusion, even manuf up slightly. Only blemish: wg growth not feeling it...yet. Analysis TK, but 1 thing: moves any rate cut further off table.
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May 12
Right you are, @bencasselman: real wage growth sharply down on yr/yr basis, with negative implications for affordability and macro (cons spend 70% of GDP), though high-end wealth effect can pick up some the macro slack. nytimes.com/live/2026/05/12/…
econjared.substack.com/p/inf…
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May 12
This is a policy-driven, own-goal-kick spike in inflation, due to tariffs (gas, groceries, goods), war (gas, groceries), shelter (April spike due to correcting neg bias from shutdown).
It is a simple, compelling picture of not just ignoring affordability, but making it worse.
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Still working my way through the numbers, and one never wants to over-torque on one month's data. But this jobs report looks like firm gust of wind in the sails of the FOMC members who wanted to shift the rate bias from easing to neutral.
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Apr 29
FOMC statement and vote more hawkish than dovish. 11 votes to either hold or hold and move to more neutral stance. Other than Miran, this is an independent committee. That’s a welcome headwind for Warsh.
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Apr 21
Disagree. See figure. Conf Board typically rises in expansions but it's clearly trending down in this one. Big gap at the end, for sure, prob because UMich asks a lot more about prices whereas CB focuses more on jobs (which, ftr, may be why it's trending down--low/no hire).
Apr 21
Here's one possible answer to the US consumer sentiment puzzle: people are way over-indexing to UMich.
Things look totally normal on the Conference Board survey!
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Apr 20
You’re 100% right, Claudia. But I kinda sorta agree with the highlighted part. As a prominent congressman once told me: “so let me get this straight, I can stand up and talk about sending Americans to war, but I can’t say anything about interest rates?!”
Apr 20
Also, this bit from Warsh is an insult to reality. President Trump has gone way past words: he (unsuccessfully) fired a Fed Governor and is supporting a criminal investigation of a Fed Chair.
Central bankers don't need to be "strong enough to listen", they need to be personally wealthy enough to deal with legal bills. Plus, for Warsh, I guess.
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Apr 20
You’re of course totally right, Claudia. But I kinda sorta agree with the highlighted part. As a renowned pol once said to me, “so, I can stand up and talk about sending Americans to war but I can’t say anything about interest rates?!”
Apr 20
Also, this bit from Warsh is an insult to reality. President Trump has gone way past words: he (unsuccessfully) fired a Fed Governor and is supporting a criminal investigation of a Fed Chair.
Central bankers don't need to be "strong enough to listen", they need to be personally wealthy enough to deal with legal bills. Plus, for Warsh, I guess.
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Jared Bernstein retweeted
Apr 20
Also, this bit from Warsh is an insult to reality. President Trump has gone way past words: he (unsuccessfully) fired a Fed Governor and is supporting a criminal investigation of a Fed Chair.
Central bankers don't need to be "strong enough to listen", they need to be personally wealthy enough to deal with legal bills. Plus, for Warsh, I guess.
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Apr 10
UMich Sentiment Index just hit its lowest value on record, going back to before even *I* was born. Date notes below--this was pre-ceasefire--but this isn't a fluke/outlier. It's yet another data point in the gap between pretty good macro and very tough micro.
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Apr 10
Data notes: prelim value for April; I've connected the earlier, non-monthly values using linear interpolation; 98% of responses were pre-ceasefire. "Demographic groups across age, income, and political party all posted setbacks in sentiment..." 1yr infl expectations also spiked.
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Apr 10
Real earnings, which had been growing at ~1%/yr, got hit in March by the war-induced price spike and slower nominal growth. These are 1-month, noisy results, but they raise the question of how long it will take for the price spike to unwind. That, in turn, is a function...
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Apr 10
...of the extent to which the Iranian regime flexes their newly gained control of the flow of goods through the Strait. In other words, this president has turned the buying power of the American workers' paycheck over to the Iranian regime.
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Notable: Mid/low wage growth decelerating, as (headline) inflation rising. Real wage gains for this 80% of workforce were tracking >1%. Fcast for near term CPIs is closer to this current pace of wg growth, meaning < buying power. Hopefully short lived, but...wg stagflation.
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Job markets don't really shed 133K jobs in Feb only to add 178K in Mar. There's strikes (nurses out in Feb, back in Mar), sampling noise, etc. So you gotta run a smooth trend through the data. That last *trend* data point is ~30K, which is likely around, if not above, breakeven.
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Mar 31
The folks at Wolfe Research (eg, @tobinmarcus) talk about reaching the strike price on the Trump put which leads him to TACO out of the war. Well, the @WSJ suggests it might be $4.02 on the gas price (though Trump's non-credibility means who knows?).
wsj.com/world/middle-east/tr…
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Mar 28
My recession probability has been only slightly bumped up due to the war, as unemp still relatively low, biz inv pretty good, productivity up, US econ highly resilient. But new developments make me more nervous about near-term macro. Core concern: real wage growth could stall.
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Mar 28
...of shutting down the SoH, taking TACO off the table. Last seen, mid-level hourly wages were growing 3.7%, and given job market weakness, that's unlikely to accelerate. Add in the fact the consumer spending is 70% of GDP and has consistently powered US macro in recent years...
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Mar 28
...and you see the problem. All speculative, and the resiliency point cannot be discounted. But putting those observations together is leaving me more spooked.
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