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Can the West’s perplexing employment miracle continue?

economist.com

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Re: Can the West’s perplexing employment miracle continue?

#31

Post by almog »

ethbr0 wrote: post #16
mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

> to a high interest one We're at 4.50–4.75, no? That's not low, but it's not high either. https://en.m.wikipedia.org/wiki/Federal_funds_rate#Historica...

Not only it's not high compared to historical rates but worse I think is that Fed's real interest rate is still in the negative territory: January CPI report headline came at 6.3% YoY and core at 5.3% YoY (it's negative with current rates even if you use the PCE index as a baseline, which is the Fed's favorite index to measure inflation).

Re: Can the West’s perplexing employment miracle continue?

#32

Post by eftychis »

mkl95 wrote: post #18
endisneigh wrote: post #15

Earlier quoted context omitted.

> Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. > We know inflation should start decreasing within a year or so Indeed

I sort of trust the ECB, but I won't be shocked if they miss their targets.

I trust the ECB to miss their targets. It is part of the job description setup. You are trying to control a chaotic system with one knob and you have to follow a manual that gets rewritten with past learnings:

a) if the issue reoccurs, the learnings are ineffective b) if the issue is new, how can you tell how to move the knob without pissing a lot of people and losing your job.

It is a lose-lose game.

Re: Can the West’s perplexing employment miracle continue?

#33

Post by refurb »

mountainriver wrote: post #3

Eventually we’ll run through all the money we dumped into the economy.

You don't really “run through it” since the money is still there (unless the central bank pulls it out).

But you are right that eventually the economy would grow enough to “soak up” the extra money and it wouldnt be so inflationary.

Re: Can the West’s perplexing employment miracle continue?

#34

Post by Nowado »

marginalia_nu wrote: post #19
Swizec wrote: post #13

Earlier quoted context omitted.

Considering almost 7m people died from covid officially … Yeah they’re pretty missing https://www.worldometers.info/coronavirus/coronavirus-death-... The Economist puts excess deaths at 20m https://www.economist.com/graphic-detail/coronavirus-excess-...

How many of these dead people were of a working age?

If you go with that excess deaths number, if the answer was 1/4 (which is what stats suggest) that covers half of the 10M.

There's still the other half, but that's not nothing.

Re: Can the West’s perplexing employment miracle continue?

#35

Post by bobberkarl »

sillybov3456 wrote: post #29
thoweiruo3i4 wrote: post #26

[flagged]

I'm sorry but I'm not entirely sure who or what you are responding to with this. Could you explain a little bit of the context so that we can understand the point that is being made?

Same. Curious. Can he reinstates what he just said?

Re: Can the West’s perplexing employment miracle continue?

#36

Post by marginalia_nu »

Swizec wrote: post #23
marginalia_nu wrote: post #19

Earlier quoted context omitted.

How many of these dead people were of a working age?

Enough? Keep in mind we got some of the first ever basic human rights because there weren’t enough peasants after the black plague.

I mean in the context of does it explain the absent workers?

Re: Can the West’s perplexing employment miracle continue?

#37

Post by flkiwi »

bluGill wrote: post #20
mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

This isn't a high interest rate ecconomy, this is normal interest rates. Rates have been absurdily low for a while so you may not remember it, but history provides a record.

Historians in 500 years will stare in wonder at the stunning evidence we did not, in fact, build ALL the infrastructure, physical and otherwise, during the last ~25 years of absurdly cheap money.

Re: Can the West’s perplexing employment miracle continue?

#38

Post by roflyear »

almog wrote: post #31
ethbr0 wrote: post #16

Earlier quoted context omitted.

> to a high interest one We're at 4.50–4.75, no? That's not low, but it's not high either. https://en.m.wikipedia.org/wiki/Federal_funds_rate#Historica...

Not only it's not high compared to historical rates but worse I think is that Fed's real interest rate is still in the negative territory: January CPI report headline came at 6.3% YoY and core at 5.3% YoY (it's negative with current rates even if you use the PCE index as a baseline, which is the Fed's favorite index to measure inflation).

seems the consensus is "a little more inflation" is better than "a bigger recession" which is probably true. People are still trying to get on their feet, and inflation is "felt" a lot less than losing your job (and not being able to find a new one for a long time).

Re: Can the West’s perplexing employment miracle continue?

#39

Post by [deleted] »

onlyrealcuzzo wrote: post #17
mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

> Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. That's true regardless of the interest rate situation... > We have gone from a zero interest rate economy to a high interest one within months. IIUC, even the Fed's pretend "Natural Rate of Interest" is higher than current rates - meaning even they seem to believe they're still stimulating the economy some…

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