My followup question got lost in this reply so, in the light of
subsequent comments, let me ask the question of Doug and others, why has
the employment rate held up despite the negative savings rate, the
deflating housing bubble and the contracting manufacturing sector? It
has always been a contention that an economy can not prosper by each of
us 'taking in each other's laundry'. Yet, that seems to be what is
happening in the expansion of the service sector that Doug refers to. I
guess what I am asking is , what are the limits to this? Is a recession
in the wings? (I am not trying to draw some political implications from
this as Doug seems to imply that we want to, but rather to try to
fathom what is going on in the American economy so I can give
intelligent lectures to my Slovenian students next month.)
Paul P
Jim Devine wrote:
doug, what evidence do you have that labor markets are tight. Are
wages (excluding CEO salaries and the like) squeezing profits?
On 2/4/07, Eugene Coyle <[EMAIL PROTECTED]> wrote:
Well, that's really my question "Do we really have tight labor
markets?" Not in the construction trades, not in manufacturing --
just where are these labor shortages? Just in the MBA ranks? I
guess mine isn't a question but rather an assertion: We don't have
tight labor markets.
Gene Coyle
On Feb 4, 2007, at 6:36 PM, Doug Henwood wrote:
> On Feb 4, 2007, at 6:17 PM, Eugene Coyle wrote:
>
>> I keep reading in the financial press that the Fed is worried about
>> inflation. Then the articles go on to explain that because of tight
>> labor markets, the Fed is worried about inflation.
>>
>> I accept that the Fed is worried about inflation -- it
>> always is --
>> and embraces that worry. But isn't the source of the current worry
>> different from tight labor markets?
>
> It's probably tight labor markets. The Fed doesn't like it when the
> unemployment rate gets too low. In the late 1990s, productivity
> growth was strong - now it's not.
>
> Doug
--
Jim Devine / "The truth is more important than the facts." -- Frank
Lloyd Wright
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