Tag Archives:

unemployment

US Jobless claims as a percentage of the labour force is now at multi-decade lows

I blogged last year about the state of the US labour market and given the recent release of September’s initial jobless claims data, this seems like a good time to revisit these ideas.

US Initial Jobless Claims is an unemployment indicator which tracks the number of people who have filed jobless claims for the first time, representing the flow of people receiving unemployment benefits.  The Sep…

Read the article

It’s the taking part that counts: why Europe’s labour market might be stronger than we’d thought

We saw further evidence of the strengthening US labour market on Friday. In September, 248,000 new jobs were added and the unemployment rate fell below 6% for the first time in six years. Headline unemployment rates in Europe, by contrast, have been more dismal, with the latest numbers coming in at 11.5% across the Eurozone for August.

Less encouraging for the US was the participation rate fall…

Read the article

Are wages at the tipping point in the US labour market?

Five years into the US recovery, the labour market is quickly returning to full health. Hiring activity is picking up, employers have added a robust 1.3 million jobs over the past 6 months and the unemployment rate is rapidly approaching a level that could prompt the Fed to start thinking about raising interest rates.  All labour market indicators seem to have improved except for the one that w…

Read the article

Exceptional times

Interest rates – both short and long term – are at record lows in Europe. The driving force behind this is the belief that both employment and inflation will be lower for longer. This is something that concerns the ECB and Drahgi’s Jackson Hole speech implies further easing ahead. These appear to be exceptional times.

The story of how we got here is pretty simple: a global banking collapse in 2…

Read the article

A shifting Beveridge Curve – Does the US have a long term structural unemployment problem?

I am sure that many of us are familiar with some of the better known economic theories concerning unemployment which have previously been discussed or alluded to on this blog e.g. Okun’s Law and the Taylor Rule, but perhaps a lesser known theory (which has been receiving growing attention from economists in recent times), is the Beveridge Curve.

Using data on job vacancies and unemployment, the…

Read the article

Full time, not part time, economic recovery

When meeting UK clients we obviously spend a lot of time discussing employment and the relative strength of the UK economy. The chart below from the Bank of England shows the recovery in employment in comparison to previous recessions. It actually looks quite good versus the other mega recessions.

UK employment is well above previous recession levels

One very good common question we often get is along the lines that the employment number is “not …

Read the article

Jobless claims and Fed policy

Today’s release of jobless claims shows that the US economy is continuing its healthy response to the stimulus provided by the Fed. Momentum in the US labour force remains in a positive direction.

The very long term chart below shows today’s headline number of 331,000 to be relatively low historically. However, this is actually understating the current strength of the labour market.

Slide1

In order t…

Read the article

It’s a knockout – why the gilt and currency markets have no love for Carney’s forward guidance

Millwall FC wasn’t the only team to trek up to Nottingham yesterday from London and to come back empty handed (at the hands of the mighty, mighty Forest).  Team Carney from the Bank of England also had an unproductive time of it in the East Midlands as the new Governor gave his first speech in the role to the CBI, Chamber of Commerce and the Institute of Directors.  Since the publication of the…

Read the article

Mr 7 percent – exploring unemployment in the UK

The governor at the Bank of England stepped forward last week with guidance about its future plans and conditions regarding the tightening of monetary policy. Ben gave his views on the announcement here last week, but what I am going to focus on is the 7 percent unemployment rate ‘knockout’.

Firstly, why has the Bank of England decided to use the unemployment rate as an indicator of inflationar…

Read the article

Video: whilst the market gets excited about unemployment falling to 6.5%, the Fed’s attention is turning to falling inflation

I spent a couple of days in New York last week seeing economists and academics. The US Treasury market had just seen a significant sell-off, with 10 year yields rising from 1.63% at the start of May, to over 2.2%, with much of the damage done by Bernanke’s surprise talk of QE tapering during the Q&A following his address to Congress’s Joint Economic Committee. US 30 year mortgage rates sold off…

Read the article