While high inflation is a headache for consumers, at least some of it was the result of newly employed people finally being able to afford to purchase goods ...
I can’t pinpoint exactly when the calls to tighten began when inflation was heating up three years ago. But we can all agree that these calls grew loudest ahead of the
What if we went back a little further, and the Fed hiked rates at its October/November 2021 meeting? The core PCE price index was increasing at about a 4.5% rate. Price-sensitive consumers would’ve been much happier to see inflation top out there. But the unemployment rate was higher at about 4.5%.
FILE PHOTO: Federal Reserve Board Chairman Jerome Powell leaves after a news conference at the Federal Reserve Building in Washington, U.S., December 14, 2022. REUTERS/Evelyn Hockstein/File PhotoI’m not suggesting the Fed was right or wrong to adjust monetary policy when it did. I’m just saying that you cannot talk about how monetary policy actions affect inflation without addressing how they affect employment.
The unemployment rate — that is, the number of workers who identify as unemployed as a percentage of the civilian labor force — declined to 4.2% during the month. While it continues to hover near 50-year lows, the metric is near its highest level since October 2021. Keep in mind that during times of perceived stress, soft survey data tends to be more exaggerated than hard data.a number of rate cuts before we’d characterize
Inflation Rates Federal Reserve Monetary Policy Core PCE Price Index Price Stability Maximum Employment
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