“January had the highest year-over-year employment gain since the ’90s”

Bill McBride at Calculated Risk calls it “another strong report”. Among other things, he says:

“January had the highest year-over-year employment gain since the ’90s”

Gives out a good headline, but covers up the essentials! He shows a version of this chart:

Big Employm Gain_1Note that the fall in year over year employment in 2008-09 was higher by a factor of almost 3 to the fall experienced in the previous worse post-war recession in 1981-82! Despite that, the employment gains at present are relatively mediocre! Given the depth of the drop, the gains should have been much larger!

But many will say: “We´re in a “Great Stagnation”, or “It´s the “New Normal” or even, “it´s the Demographics”!

I say “It´s the wrong monetary policy, stupid”!

Let´s see why.

The first chart shows the economy´s “main driver”, aggregate nominal spending or NGDP, closely controlled by the Fed.

Big Employm Gain_2

As for the rest,

Be it a measure of employment

Big Employm Gain_3

Measures of unemployment

Big Employm Gain_4

Or inflation indicators

Big Employm Gain_5

Follow suite

And if the Fed insists on going on a “raiding party” (i.e. begin “policy normalization”) we will soon be looking back to 2014 as “Great Times”!

One thought on ““January had the highest year-over-year employment gain since the ’90s”

  1. Pingback: Ten Million Missing US Workers Due To Monetary Policy Not Demographics | The Corner

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s