CERF Blog

We’ve been saying for a long time that the Eurozone has to break up.  There is no reason Greece and Germany should have the same monetary policy, never has been.  We’re glad to see other people are coming around. The Greeks are discussing it at the policy level.  Other countries are probably also discussing how… Read more

This is a short note about our forecast of the April labor market.  The data comes out this Friday, May 6. Our labor market forecast is improving, slowly. Both February and March nonfarm payrolls increased by about 200 thousand, and we are tentatively confident that about 180 thousand can occur in April. This forecast reflects… Read more

A remarkable thing happened today. For the first time in two years the estimate of United States economic growth was lower than our forecast. Despite weak fundamentals, U.S. GDP growth had been more rapid than our forecast due in part to temporary Government stimulus programs. The preliminary estimate of U.S. real GDP growth during January… Read more

Previously Published March 22, 2011 Forecasting is a challenge in rapidly changing times, and these are very rapidly changing times. At the beginning of the year, it would have been unbelievable if someone had said that Mubarak would be deposed, we would be in a war in Libya, and there would be general uprisings throughout… Read more

Here are two facts about China: Real estate values declined 27 Percent last month. Inflation is increasing. Their economic growth has slowed a bit, but it is still really high at 9.7, at least by the official numbers.  Still, China’s leaders have a problem.  Inflation can eventually create disastrous problems, but eliminating it would require… Read more

It is time to write about inflation.  From fall of 2008 until about a month ago I was more concerned about deflation than inflation.  In my post last fall, I characterized the United States economy as being in a “Good-delation Equilibrium”, one that eased pressure on households and the Fed in a weak-demand economic environment. … Read more

Previously published March 22, 2011 in the California Economic Forecast I mentioned in the United States Highlights essay that the fourth quarter consumption growth rate of 4.1 percent, the strongest in five years, was a surprise given weak economic fundamentals. I also discussed the evidence of significant heterogeneity across U.S. regions. I would argue that… Read more

Previously published March 22, 2011 It appears that California residential real estate is in the second dip of a double-dip decline. California home prices, and sales, crashed at the beginning of the recession. Then, last year they picked up in the first half of the year, a result of temporary government programs and optimism unsupported… Read more

Previously published March 22, 2011 California remains mired in something like a zombie state, not quite dead, but certainly not vigorous, moving but with no clear direction. Perhaps, jobs and migration data best show California listless nature. Jobs have been increasing in almost every sector, but that job growth has been anemic. We saw only… Read more

Previously published March 21, 2011 The Recent Evidence The United States economy continues to surprise me. Fourth quarter real consumption growth of over four percent, the fastest growth rate in five years, seems anomalous in the face of many fundamentals. I remind myself and the reader that one quarter’s worth of data does not make… Read more

Previously Published March 17, 2011, in the California Economic Forecast A couple of weeks ago, somebody–I think it was Shiller–said that they expected residential real estate price to decline by another 20 percent or more. Soon after, I was contacted and asked if I thought that a 20 percent decline was possible. My answer was… Read more

Previously published in the California Economic Forecast, March 24, 2011 If you are looking for a summary statistic on the United States economy, I recommend you consider bank charge-offs. These are the loans that banks have written off their books, because the probability of collecting them is so low. It doesn’t mean that the borrowers… Read more

Last year about this time there was all sorts of talk about green shoots and economic recovery.  We were vocal in cautioning that the shoots were ephemeral and would evaporate with the end of incentive programs and census hiring.  We were right, as job growth turned negative in the 2010’s second quarter. Now, there is… Read more

The Federal Reserve released its 2010 quarter 4 Flow of Funds Accounts today. The 125-page press release and the related database includes a huge volume of data on all things financial for the United States. I will focus my comments on debt levels and on the wealth of the household sector. Quarter 4 debt of… Read more

The February United States jobs report came out this morning, and it is contains a glimmer of hope. This does not mean the recovery is strong yet. One month’s worth of data is nothing to base a trend on. There were 2 things of note that happened in February. Job gains occurred in the construction… Read more