The Corona pandemic is deflationary. It is a massive negative demand shock affecting more than 90% of the world’s population.  That price indexes are falling, of course, does not mean that all prices will decline.  It is likely that there…

The desire for a V-Shaped recovery in the U.S. economy is hindered by reductions in the human capital necessary for recuperation in the labor markets.  The administration’s restrictions on the flow of legal immigration is further aggravated by an accelerated…

News related to the U.S. consumer is overly pessimistic.  The media focus on households who are on the financial edge overlooks the fact that the vast majority of households began this year in a very strong position: The proportion of…

Now that most people are sequestered at home, there has been considerable speculation in the media regarding a coronavirus baby boom once this is over.  The reality, however, is that pandemics are followed by lower birth rates 9 months later…

The recent news on initial claims for unemployment insurance and today’s release on payroll jobs and the unemployment rate for March makes for grim reading.  In one sense, however, it is a distorted reaction.  The U.S. could have paid workers…

Conventional monetary policy has become impotent.  The Fed’s cut in its short-term interest rate target is pushing on a string.  This is a demographic liquidity trap that encompasses monetary policy around the world.  Although they can’t avoid the economic crisis,…

Although the February labor market captured a moment prior to the market being gripped with anxiety regarding the global impact of the widening pandemic, we think that the solid results are a harbinger of better than expected labor market news…

The most important takeaway from the Coronavirus epidemic is the need to focus on the balance sheet, i.e. to determine the ability of companies to withstand a negative revenue shock.  We have often commented that our “Race to Zero” thesis…

Consumer spending has been very strong even though wage inflation has remained modest.  This reflects positive developments in Employment Characteristics of Families and Work Experience of the Population.  The latest readings on Work Experience of the Population confirm this sanguine…

The U.S. has been at or below an unemployment rate of 4% for nearly two years without igniting a disorderly upward wage spiral.  Wage inflation as measured by Average Hourly Earnings (AHE) have decelerated for several months in a row. …