The Phillips Curve is dying a slow (and not painful for us) death

Claudia Sahm

Feb 3, 2023

Here are the facts:

In January 2023, the U.S. economy added 1/2 million jobs. The best way to solve a labor shortage is with labor. That’s as true now as it was last year.
Stay-At-Home Macro
The best way to solve a labor shortage is with labor
Jobs Day was a good day. Workers getting a new paycheck and many getting a bigger one are things to celebrate on a human level. On the economic level, they are, too. The sizable payroll gains as an encouraging sign that labor shortages are easing. During the recovery, ‘missing’ workers are right up there with broken supply chains as holding…
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a year ago · 27 likes · 8 comments · Claudia Sahm
The unemployment rate is 3.4%, the lowest in over 50 years. The Sahm rule moved down to -0.1 percentage point. We are not in a recession. And that’s good!
Stay-At-Home Macro
We are not in a recession, nor is one inevitable.
Recession, Recession, Recession. The news is grim. Fears are rampant. Should they be? I will say emphatically and with data to back me up: we are not in a recession now. Businesses added almost 400,000 jobs last month, and the unemployment rate held at 3.6% for the third month. That’s outstanding. That’s not a recession…
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a year ago · 33 likes · 19 comments · Claudia Sahm
Wage growth is slowing, as is inflation. All that with low unemployment. What’s not supposed to happen “in theory” appears to be happening in reality. I’ll take it.

Stay-At-Home Macro

Ban the Phillips Curve

Yesterday we learned that U.S. inflation, albeit too high, stepped down again in November, even as unemployment remains low and consumer spending, adjusted for inflation, is rising solidly. The pandemic and war in Ukraine have been incredibly difficult for everyone and tragic for many. We are not at the finish line but on the right path. Keep going. We…

9 months ago · 54 likes · 37 comments · Claudia Sahm

Ok, I get it. Inflation remains too high, and we are not on a glide path back to normal. But let’s take today to celebrate a win for workers. A job-full recovery means a lot.

2 Comments

Ariel Stulberg

Writes The Opposite of post-Truth

Feb 3

Missed opportunity for "It's the end of the Philips Curve as we know it (and I feel fine)."

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Michael Bostic

Where are all those who thought a recession was going to happen because of the supposed layoffs in the tech sector? This was some jobs report today. The labor market fighting the fed and they're winning.