Economic Calm in the US

The Economist reports on the low unemployment rate and stable inflation in the United States: https://www.economist.com/finance-and-economics/2018/09/15/america-is-pushing-the-labour-market-to-its-limits .


Summary: The Economist reports that the U.S. labor market "has been soaking up not only job-seekers, but also people who reported that they had not been looking for work, or who had been working fewer hours than they wanted."


In addition, "[d]ata released on September 11th revealed that Americans are quitting their jobs at the highest rate since 2001. For each job opening, there are just 0.82 hires and 0.9 unemployed people hunting for a slot. All of the main measures of labour underutilisation reported by the Bureau of Labour Statistics are at or below their pre-crisis trough, and near to where they were at the peak of the dotcom boom."


At the same time, inflation has been rising only gently and "it hit 2% for the first time since 2012 in July. According to a survey by the University of Michigan, inflation expectations appear to be rising gently, too. Even average hourly earnings seem to be accelerating, up by 2.9% in August compared with 12 months ago (though admittedly, that is not much more than inflation, and still below the pre-crisis norm)." However, Jerome Powell, Chair of the Board of Governors of the Federal Reserve System (pictured), indicated on August 24, 2018 that there are no clear signs of acceleration of inflation beyond the gentle rises we are seeing.


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