Tag Archives: US/Global Economics

Initial jobless claims: still elevated compared with several months ago, another negative jobs report for January a possibility Initial jobless claims this week came within a hair of meeting my criteria for a change to an upward trend.  On a unadjusted basis, new jobless claims declined by 151,303 to 960,668. Seasonally adjusted claims also declined by 26,000 to 900,000 (last week’s numbers were also adjusted downward from 965,000 to 926,000)....

(Better late than never…Dan) This is a really slow news week – on the economy!  My retrospective on the Trump Presidency is nearly complete and will be published tomorrow morning.In the meantime, here is a brief note on the Small Business Optimism index which was updated for December last week, showing a steep decline across the board. Here it is: What happened? Was there some earthshaking economic news? A hidden cataclysm of supply or demand?...

Will North Korea Explode After Biden Becomes President?  This is what was forecast in a column in the Washington Post by Victor Cha. He sees a combination of economic collapse, a massive spread of Covid-19, and a standard desire when a new US president to enter the office to be behind a possible outbreak of military assertiveness, possibly exacerbated by a much more serious collapse of the DPRK economy and society.  I suspect this is overdone, but...

This is an extended post on the caveat to debt and taxes 1. It is joint work with Brad DeLong and Barbara Annicchiarico. The point is that, in his Presidential Address, Olivier Blanchard notes that the argument that higher debt causes increased welfare is weaker than the argument that it is feasible. The Treasury can afford to increase debt D_t just by just giving bonds away and can pay interest and principal without ever raising taxes so long...

Good news (industrial production) and bad news (retail sales) This morning’s two reports on industrial production and retail sales for December were a case of good news and bad news. Let’s do the good news first. Industrial production, the King of Coincident Indicators, rose 1.6% in December. The manufacturing component rose by 1.0%. Needless to say, these are strong positive numbers. As a result, overall production is only -3.3% below its...

This is the second post in a series. I will discuss advantages of income taxation different from the obvious advantage that taking from people with high income hurts them less than taking from people with low income. Here again, I will assume that, in equilibrium, income tax is returned to the people who pay it as a lump sum. I do this to focus on the incentive effects of income taxation. In standard models, these effects are undesirable and...

Two hundred years ago this February, Charles Wentworth Dilke anonymously published a pamphlet titled The Source and Remedy of the National Difficulties, deduced from principles of political economy. Four decades later, Karl Marx would describe the pamphlet in his notes as an “important advance on Ricardo.” In his preface to volume two of Capital, Friedrich Engels described the pamphlet as the “farthest outpost of an entire literature which in the...

Cases in which income taxation is preferable to lump sum taxation with the same ex post net transfers. The main reason for progressive taxation is that the welfare cost of taking money from wealthy people is lower, because they have a lower marginal utility of consumption. I would like to discuss other advantages of income taxation, that is cases in which it can cause an increase in money metric welfare, or, in other words cases in which a...

Jobless claims highest in three months – but seasonality still playing a huge role On a unadjusted basis, new jobless claims rose by 231,335 to 1,151,015. Seasonally adjusted claims also rose by 181,000 to 965,000. The 4 week moving average rose by 18,250 to 834,250. Here is the close up since the end of July (these numbers were in the range of 5 to 7 million at their worst in early April):  There is now a 2+ month trend of YoY%...

Scenes from the December jobs report Friday’s December jobs report saw the first decline in employment since the lockdowns of March and April. Let’s take a closer look.As I pointed out Friday, the losses were concentrated in the food and dining (restaurant) and amusement and recreation sectors, both of which are shown below normalized to 100 as of February: The two sectors are down 20% and 30% from their February peaks.By contrast, the leading...