Fourth quarter United States GDP contracted by about $5 billion dollars, which is 0.1 percent negative growth annualized. This is after 3.1 percent growth in the third quarter which was the strongest quarter in 2013. The largest drivers of the fourth quarter decline were a contraction in government spending of 6.6 percent and a change… Read more

This is a comment on the national November Employment Situation report released last Friday, and I use numbers from the report to calculate when the United States might reach the Federal Reserve unemployment rate goal of 6.5 percent. The unemployment rate fell from 7.9 percent in October to 7.7 percent in November which might appear… Read more

A central concept in Modern Macroeconomic theory is that capital stock will be accumulated through the process of saving for the future. A new country, starting with a low capital level, will accumulate capital for some number of years or decades until reaching an equilibrium level of capital stock. Progressive taxes on capital income imply… Read more

The advance estimate of U.S. third quarter GDP was released this morning, indicating that the economy grew at 2 percent. Third quarter growth was driven by private consumption and government defense consumption. Investment expenditures were weak, and trade was a small drag on third quarter growth. Business investment expenditures actually contracted, while residential real estate… Read more

The labor department released their monthly jobs report. Today’s release is a report on the employment situation in August. Payroll jobs rose by 96 thousand jobs, driven by private sector job growth of 103 thousand jobs. The private sector job growth was concentrated in services, particularly professional and business services, education and healthcare services, and… Read more

The BLS Employment Situation was released today, indicating a job increase that exceeded the expectations of the consensus forecast. This information is based on a survey of employers. The 163 thousand job increase over June contrasts with the Bloomberg median consensus of 100 thousand and our forecast of 80 thousand. It is the most rapid… Read more

The BEA released its “advance”, or first, estimate of second quarter GDP today, and it might not surprise anyone that the economy grew more slowly in the second quarter than in the first quarter. The question is: how much slower? The quarter 2 estimate is 1.5 percent, compared with a revised estimate of 2.0 percent… Read more

The Labor Department’s Jobs report came out this morning at an 80,000 job increase for June, an 84,000 gain for the private sector and a 4,000 loss for the public sector. We had forecast a 60,000 increase overall and a 70,000 increase for the private sector. The Unemployment rate remained unchanged at 8.2 percent, the… Read more

The first release of GDP data came out this morning with an advance estimate of 2.2 percent growth for quarter 1. Contributions of growth from the major components were: Consumption Expenditures                       2.04 Investment Expenditures                           0.77           Fixed Investment                             0.18           Inventory                                          0.59 Government Expenditures               … Read more

I am worried that societies and/or their governments have chosen to commit taxpayers to underwriting the solvency of banks. Economic research has shown clear benefits to financial intermediation. The collection of savings creates a pool of funds that can be used to finance business expansion. Banking is very important to economic activity. The United States… Read more