Robert Hetzel’s history of the Fed

Robert Hetzel has written an outstanding new book entitled The Federal Reserve: A New History.  I reviewed the book for Central Banking.  Here’s an excerpt: During 2008, the Fed overreacted to (transitory) rising energy prices, and policy became too contractionary during the early stages of the Great Recession. Just as during the Great Depression of […]

Who is keeping coal alive?

Mountains of coal are piled beneath azure skies at the port of Newcastle, Australia. Giant shovels chip away at them, scooping the fuel onto conveyor belts, which whizz it to cargo ships that can be as long as three football pitches. The harbour’s terminals handle 200m tonnes of the stuff a year, making Newcastle the […]

Beware of foolproof recession indicators

Beware of “foolproof” recession indicators. For years, people have been telling me that an inversion of the 2-year and 10-year yield spread on Treasury securities indicates that a recession will occur within 12 months. I’ve warned them that while the indicator has a good track record, it’s far from perfect.  This yield spread inverted on […]

Are Republicans Discovering the Limits of Markets?

A recent oped in the Financial Times bears a strange title: “On America’s Ramshackle Railroads, Republicans Concede the Limits of the Market.” Although this sentence does not appear in the piece itself, it does reflect its author’s opinion. Oren Cass, president of American Compass and a proponent of industrial policy and protectionism, argues that the […]

Here’s where the jobs are for May 2023 — in one chart

A waiter works at a restaurant in Alexandria, Virginia, on June 3, 2022. Olivier Douliery | AFP | Getty Images The U.S. payrolls report for May blew past expectations, supported by strong jobs gains in the professional and business services sector — as well as a jump in government employment. Professional and business services led […]

Unemployment dropped among Latino workers but rose for Black workers

Steve Debenport | E+ | Getty Images The U.S. unemployment rate rose in May, but declined for Hispanic workers, according to the latest nonfarm payrolls report. The overall unemployment rate last month was 3.7%, a gain of 0.3 percentage points from the prior month. However, Hispanic or Latina women saw their unemployment rate fall to […]

Jobs report May 2023: Payrolls rose 339,000

The U.S. economy continued to crank out jobs in May, with nonfarm payrolls surging more than expected despite multiple headwinds, the Labor Department reported Friday. Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth. […]

Here’s what to watch out for in Friday’s jobs report for May

Construction workers on a job site on May 05, 2023 in Miami, Florida. Joe Raedle | Getty Images Watching the monthly jobs reports this year has been something of a waiting exercise, with economists and market participants looking for a downturn that never seems to arrive. That scenario is likely to recur Friday when the […]

Why China’s government might struggle to revive its economy

China’s post-covid recovery was supposed to be world-shaking. Instead, it looks merely shaky. After the initial release of pent-up demand, economic data for April fell short of expectations. In response China’s stocks faltered, yields on government bonds fell and the currency declined. The country’s trade-weighted exchange rate is now as weak as it was in […]

Investors go back into battle with rising interest rates

The past three months have afforded investors little pause for thought. Since a run on Silicon Valley Bank (svb) in March, markets have had to judge first whether one American lender would collapse (yes), then others (yes, though mercifully few), then whether the contagion would spread overseas (just to Credit Suisse). With the takeover of […]