Tag Archives: labor participation rate

Low Interest Rates Through 2014 and Beyond

Ben Bernanke, in a speech on November 19th, made it very clear that the Fed is likely to hold interest rates low for an extended period of time.  This comes on the heels of similar comments by his likely successor at the Fed, Janet Yellen, during her confirmation hearings.  On top of this, inflation numbers released on the morning of the 20th show almost no increases in consumer prices over the past year and existing home sales have just registered a drop.  In related events, Larry Summers just gave a widely-noted presentation to the IMF in which he warned that the U.S. may be settling into a long-term economic malaise.  Larry Summers, who was previously a contender to be the next Fed chairman, surely considered his comments to the IMF very carefully. Continue reading

Handcuff Volunteers and the Rally of 2013

The S&P500 is up by 26% for the year-to-date, despite the fact that employment growth is anemic, the labor participation rate is at its lowest point in thirty five years, and inflation-adjusted GDP growth is experiencing a long-term slowing (see chart below).  GDP turns negative in recessions—this is the definition of a recession—but has historically recovered much faster than we have seen in the post 2008 years. Continue reading

A Picture is Worth a Thousand Words: The State of the Economy

Availability of timely data is at the core of effective financial and economic analysis.  The Federal Reserve Economic Database (FRED) provides a vast array of economic time series via an intuitive graphical interface.  If you want to get a read on the U.S. economy, FRED is an outstanding resource.  The ability to quickly create customized charts makes it quick and easy to examine a wide range of data.  In this article, I am going to show a number of these charts, while  exploring the overall economic U.S. economic picture. Continue reading