DeLong: Friedrich Engels (1884): The Relative Autonomy of the State: Weekend Reading [feedly]

I notice as things get worse, and class division more obvious in the US, DeLong's on again and off again affair with Marx and Engels gets hotter.
Lots of interesting observations from Engles on social democracy in the years after Marx's passing, when it rapidly expanded along with electoral suffrage for working classes.


Friedrich Engels (1884): The Relative Autonomy of the State: Weekend Reading

https://www.bradford-delong.com/2020/03/friedrich-engels-1884-_the-origin-of-the-family-private-property-and-the-state_-the-state-is-normally-the-stat.html

Weekend Reading: Friedrich Engels (1884): The Relative Autonomy of the Statehttps://www.marxists.org/archive/marx/works/download/pdf/origin_family.pdf: 'The state... is normally the state of the most powerful, economically ruling class, which by its means becomes also the politically ruling class, and so acquires new means of holding down and exploiting the oppressed.... The ancient state was, above all, the state of the slave-owners for holding down the slaves, just as the feudal state was the organ of the nobility for holding down the peasant serfs and bondsmen, and the modern representative state is the instrument for exploiting wage-labor by capital. Exceptional periods, however, occur when the warring classes are so nearly equal in forces that the state power, as apparent mediator, acquires for the moment a certain independence in relation to both. This applies to the absolute monarchy of the seventeenth and eighteenth centuries, which balances the nobility and the bourgeoisie against one another...

...and to the Bonapartism of the First and particularly of the Second French Empire, which played off the proletariat against the bourgeoisie and the bourgeoisie against the proletariat. The latest achievement in this line, in which ruler and ruled look equally comic, is the new German Empire of the Bismarckian nation; here the capitalists and the workers are balanced against one another and both of them fleeced for the benefit of the decayed Prussian Cabbage-Lord Junkers.

Further, in most historical states the rights conceded to citizens are graded on a property basis, whereby it is directly admitted that the state is an organization for the protection of the possessing class.... This political recognition of property differences... marks a low stage in the development of the state. The highest form of the state, the democratic republic, which in our modern social conditions becomes more and more an unavoidable necessity and is the form of state in which alone the last decisive battle between proletariat and bourgeoisie... no longer officially recognizes differences of property. Wealth here employs its power indirectly, but all the more surely. It does this... by plain corruption of officials... and by an alliance between the government and the stock exchange, which is effected all the more easily the higher the state debt mounts and the more the joint-stock companies concentrate in their hands not only transport but also production itself.... In addition to America, the latest French republic illustrates this strikingly, and honest little Switzerland has also given a creditable performance in this field. But that a democratic republic is not essential to this brotherly bond between government and stock exchange is proved not only by England, but also by the new German Empire, where it is difficult to say who scored most by the introduction of universal suffrage, Bismarck or the Bleichroder bank....

The oppressed class... the proletariat... in the measure in which it matures towards its self-emancipation... constitutes itself as its own party and votes for its own representatives, not those of the capitalists.... On the day when the thermometer of universal suffrage shows boiling-point among the workers, they as well as the capitalists will know where they stand...

 -- via my feedly newsfeed

DeLong: Shelton the Charlatan: Project Syndicate [feedly]

Trump want "opportunist and fraud" Judy Shelton on the FED. DeLong amasses voices from nearly entire spectrum of econ to oppose.

Shelton the Charlatan: Project Syndicate
https://www.bradford-delong.com/2020/03/shelton-the-charlatan-project-syndicate.html

In 1994 Milton Friedman wrote about Judy Shelton: "In a recent Wall Street Journal op-ed piece (July 15)... Judy Shelton started her concluding paragraph: "Until the U.S. begins standing up once more for stable exchange rates as the starting point for free trade..." It would be hard to pack more error into so few words.... A system of pegged exchange rates, such as the original IMF system or the European Monetary System, is an enemy to free trade. It is no accident that the 1992 collapse of the EMS coincided with the agreement to remove controls on the movement of capital..." https://miltonfriedman.hoover.org/friedman_images/Collections/2016c21/NR_09_12_1994.pdf. To turn monetary policy away from internal balance toward preventing exchange rate movements that market fundamentals wanted to see occur was, in Friedman's view, the road toward disaster. It was simply wrong. And it could be held together only if economies moved from free trade back toward managed trade—and so beggared not just their neighbors but themselves.

Two and a half decades later, today's Judy Shelton seems no freer from error, but to it has added an enormous amount of incoherence. There is no consistent thread of argument in what she says. She is, rather, a weathervane pointing in the direction of whatever political wind she thinks likely to get her her next job.. Last year she said that the Federal Reserve should be careful not to do anything to curb stock prices: "More than half of American households are invested through mutual funds or pension funds in this market. I don't want the Fed to pull the rug out from under them..." https://www.bloomberg.com/news/articles/2019-07-05/trump-fed-pick-shelton-says-central-bank-should-support-markets. But in 2016—when unemployment was higher and the case for easy money stronger—it was the Fed's "appeasing financial markets" that was the thing to be avoided https://www.washingtonpost.com/opinions/yes-trumps-latest-fed-pick-is-that-bad-heres-why/2020/02/10/a13fa1ec-4c44-11ea-9b5c-eac5b16dafaa_story.html. Back then under the Obama administration when there were lots of unemployed workers who could be put to work producing exports, policies to produce a weaker dollar to boost exports were to be shunned: "The obvious quick route to export success for any nation is to depreciate its currency. Dollar depreciation is already being pushed by the Obama administration.... Let's not compromise our currency in a misguided attempt to boost U.S. job growth. America's best future is forged through sound finances and sound money..." https://www.wsj.com/articles/SB10001424052748704698004576104260981772424. These days "compromising the currency" is a plus from the interest-rate cuts she wants to see https://www.marketwatch.com/story/trumps-fed-choice-judy-shelton-says-interest-rate-cut-needed-because-europe-is-set-to-devalue-euro-2019-07-05. Today monetary policy should be made looser "as expeditiously as possible" https://www.washingtonpost.com/business/2019/06/19/fed-meets-trumps-potential-next-pick-wants-see-lower-rates-fast-possible. Back then "loose monetary policy... leads to internal bankruptcy... whole nations have foundered on this path..." https://www.wsj.com/articles/SB123742149749078635.

Catherine Rampell https://www.washingtonpost.com/opinions/yes-trumps-latest-fed-pick-is-that-bad-heres-why/2020/02/10/a13fa1ec-4c44-11ea-9b5c-eac5b16dafaa_story.html earlier this month correctly called Judy Shelton "an opportunist and a quack", and reported that Republican senators think she is not qualified. Kevin Cramer (R-ND) said: "I wouldn't want five [Fed Board] members like her". Thom Tillis (R-NC) said that her views on the gold standard do not matter because return to the gold standard is off the table. Tim Scott (R-SC) agreed with Tillis, stating that "controversial statements" were "not relevant". Pat Toomey (R-PA) worried about the "very, very dangerous path to go down" she advocated. Richard Shelby (R-AL) was "concerned". John Kennedy (R-LA) said: "Nobody wants anybody on the Federal Reserve that has a fatal attraction to nutty ideas" https://www.wsj.com/articles/republican-senator-raises-concerns-over-sheltons-fed-candidacy-11581608467?mod=hp_major_pos1.

But the Wall Street Journal editorial board has decided to back Judy Shelton's "more error packed into so so few words" over Milton Friedman by praising her as a believer that "monetary policies that ignore exchange-rate stability wreak political and economic havoc". Trump wants Judy Shelton on the Fed Board so he can threaten to—and possibly actually—replace Jay Powell with her as chair. If we have learned anything over the past three years, it is that furrowed brows of concern from Republican senators are worth precisely nothing. John Kennedy (R-LA) followed his furrowed brow by saying "I'm not saying that's the case here". Mike Crapo (R-ID) praised her "deep knowledge of democracy, economic theory and monetary policy", and denounced the "war on Judy Shelton". If Republican senators are going to save the country from yet another Trump misstep that makes America less great, first core Republican supporters have to step up and give their senators 53 spine transplants.

---

J. Bradford DeLong: Shelton the Charlatan https://www.project-syndicate.org/commentary/judy-shelton-fderal-reserve-nominee-charlatan-by-j-bradford-delong-2020-02: Like most of US President Donald Trump's earlier picks for the US Federal Reserve Board, Judy Shelton has no business even being considered for the job, let alone winning the support of self-respecting conservatives. But in the Trump era, up is down, and quackery is the new expertise.

BERKELEY – Back in September 1994, the Nobel laureate economist Milton Friedman actually wrote about one of US President Donald Trump's current nominees to serve on the Federal Reserve's seven-member Board of Governors. "In a recent Wall Street Journal op-ed piece," Friedman observed, "Judy Shelton started her concluding paragraph: 'Until the US begins standing up once more for stable exchange rates as the starting point for free trade…'" Stopping there, Friedman noted that, "It would be hard to pack more error into so few words"...

..."A system of pegged exchange rates, such as the original [International Monetary Fund] system or the European Monetary System," Friedman went on to explain, "is an enemy to free trade. It is no accident that the 1992 collapse of the EMS coincided with the agreement to remove controls on the movement of capital." In Friedman's view, the idea that monetary policymakers should turn away from the internal balance and focus instead on preventing market-driven exchange-rate movements was a recipe for disaster. Such an approach would require all economies to abandon free trade and return to managed trade, thereby beggaring not just their neighbors but also themselves.

More than two decades later, Shelton's views are no less erroneous or incoherent. Her arguments about monetary policy do not follow any consistent thread, because she is merely a political weathervane, pointing in whatever direction is most convenient for securing her next job.

Last year, she warned that the Fed should be careful not to do anything to curb stock prices, telling CNBC, "More than half of American households are invested through mutual funds or pension funds in this market. I don't want the Fed to pull the rug out from under them." And yet, in 2016, when unemployment was higher and the case for easy money stronger, she chastised the Fed for "appeasing financial markets" with loose monetary policies. Given this volte-face, it is not unreasonable to conclude that Shelton's support for monetary-policy easing depends not on economic fundamentals but on who is in the White House.

Similarly, back in 2011, when there were lots of unemployed Americans who could be put to work producing exports, Shelton argued against policies that would weaken the dollar. "Let's not compromise our currency in a misguided attempt to boost US job growth," she advised in a commentary for the Wall Street Journal. "America's best future is forged through sound finances and sound money."

But nowadays, the same person who wrote those words sees compromising the currency as an added bonus from the interest-rate cuts she wants the Fed to pursue in response to monetary-policy loosening by the European Central Bank. In fact, she now believes that US monetary policy should be eased "as expeditiously as possible." Never mind her warning in 2009 that "loose monetary policy … leads to internal bankruptcy … whole nations have foundered on this path."

Given this history of flimflam, Catherine Rampell of the Washington Post was absolutely correct earlier this month when she called Shelton "an opportunist and a quack." Rampell also notes that, "Senate Republicans seem to know this," even if they "still may be too craven to oppose her nomination, for fear of crossing Trump." For example, Kevin Cramer of North Dakota has said that while he likes the idea of having someone on the Fed Board who will challenge the status quo, he "wouldn't want five members like [Shelton]." More worryingly, Thom Tillis of North Carolina apparently does not think that Shelton's bizarre advocacy of the gold standard matters, because that issue is already off the table. Tim Scott of South Carolina agrees, arguing that Shelton's past "controversial statements" are "not relevant."

Putting on a slightly braver face, Pat Toomey of Pennsylvania told Shelton at her confirmation hearing that he is worried about her recent statements in support of devaluing the dollar. "We don't get to control other countries' monetary behavior," Toomey warned. "I think that is a very, very dangerous path to go down." Likewise, Richard Shelby of Alabama has indicated that he is "troubled by some of [Shelton's] writings," and John Kennedy of Louisiana admits that, "Nobody wants anybody on the Federal Reserve that has a fatal attraction to nutty ideas."

Nonetheless, the Wall Street Journal editorial board has decided to defend Shelton's nomination, particularly her belief that "monetary policies that ignore exchange-rate stability wreak political and economic havoc." In effect, it is choosing her error-packed words over Friedman's commonsense arguments about the proper goals of monetary policymaking.

Trump, of course, wants Shelton on the Fed Board so that he can threaten Fed Chair Jerome Powell by holding her out as a ready replacement. If we have learned anything over the past three years, it is that congressional Republicans' furrowed brows and rhetoric of "concern" are worthless. Kennedy, after expressing his reservations about "nutty ideas," went on to stipulate that, "I'm not saying that's the case here." And Mike Crapo of Idaho has gone so far as to praise Shelton for her "deep knowledge of democracy, economic theory, and monetary policy."

If Republican senators are going to save the country from yet another Trump misstep, they will need to find their long-lost spines. I'm not holding my breath....

 -- via my feedly newsfeed

'No coordination coming from the government,' says America's top flight attendant amid coronavirus outbreak and plummeting demand for air travel [feedly]

'No coordination coming from the government,' says America's top flight attendant amid coronavirus outbreak and plummeting demand for air travel
https://www.businessinsider.com/americas-top-flight-attendant-says-no-coordination-coming-from-govt-2020-3?utm_source=feedly&utm_medium=webfeeds

Andrew Caballero-Reynolds/Getty Images

• Sara Nelson, the president of the Association of Flight Attendants, blasted the Trump White House on MSNBC's The Last Word for not effectively coordinating a response to the COVID-19 outbreak in the US.
• Nelson blamed President Donald Trump for putting flight attendants and the public at risk by making it harder for labor and the government to work together. 
• Airlines have been working diligently to ensure air travel remains safe but cannot do so much without government coordination and assistance. 
• Visit Business Insider's homepage for more stories.

America's head flight attendant criticized the Trump administration for what she claims is a lack of coordination between the government and labor unions to combat the spread of COVID-19 in the US.

Sara Nelson, president of the Association of Flight Attendants, praised the work of airlines during an appearance on MSNBC's The Last Wordbut accused the White House of not taking the outbreak as seriously as previous administrations did. 

"The words that have come from the White House have put both [flight attendants] and the traveling public in harm's way," Nelson said.  

Citing the lack of testing capabilities for COVID-19, Nelson first pointed to growing coronavirus spread that has transcended national borders and resulted in hundreds of US cases, saying the government's inability to contain the outbreak "puts us all at risk." 

Nelson also highlighted the lack of coordination between airlines, unions, and the government through the White House to effectively implement "simple, good ideas" such as allowing airlines to stock additional quantities of hand sanitizer on their aircraft.

Meanwhile, President Donald Trump repeatedly touts his swift action in the early days of the virus' spread, saying that he closed the borders "early on" and against the advice of others in his administration. 

Directives from the White House regarding air travel have been to deny entry into the country for non-US citizens who have traveled to China or Iran while requiring US citizens who have traveled to either region enter the country through designated gateway airports. US citizens returning from either country will be subject to CDC screening and may be required to quarantine for a two-week period. 

Having worked with the Obama administration during the Ebola outbreak, however, Nelson believes the Trump administration's response has been insufficient in protecting the public and that the government is ill-informed on the status of the outbreak because it isn't talking to labor groups. 

"We can't even talk here with good information about what we can do in this country to be able to contain this," continued Nelson, comparing her experience with the Trump administration compared to the Obama administration's response to the Ebola outbreak. "So, I can't even believe where we are today and I'm extremely disheartened that the President of the United States is putting [flight attendants] at risk, [flight attendants] jobs at risk, our entire economy at risk and not taking this seriously." 

Despite fears to the contrary, Nelson stated that airplanes and airports are among the safest locations due to the extra precautions being taken by airlines such as ensuring aircraft are cleaned and sanitized before and after flights. 

"Ironically, going to airports and getting on planes may be one of your safest public locations because the airlines have been working with the unions and the people that know how to address these things for the last two months..." 

A reduction in demand for travel has led to airlines around the world canceling flights and reducing service on even the most lucrative routes. British Airways recently reduced frequencies on its flagship London-New York route, a top business route that's earned the airline over $1.1 billion in previous years, as businesses cut back on non-essential travel. 

Some airlines have implemented travel waivers and are waiving change fees for future bookings in an attempt to boost consumer confidence in air travel. The reduced demand for travel has been evident in the increasing lower airfares for flights between Europe and the US. 

While flights to affected regions in Asia and Italy from the US have been largely reduced, airlines are continuing to operate internationally and will continue to do so until demand dictates otherwise. Nelson praised the work of airlines in ensuring flying remains a safe form of air travel despite the outbreak. 

"The airlines are working very hard on making sure that they are taking deliberate measures to do extra cleaning, follow CDC guidelines on that cleaning, and they have been interfacing with [labor unions] on that," said Nelson. 

"We can take this crisis on but not with this kind of chaos from the White House," she added.

NOW WATCH: Here's why in-flight WiFi is so slow and expensive

See Also:

• Flight attendants from American, United, and more reveal what's making them anxious as coronavirus spreads and the airline industry gets slammed
• Shifting Gears: Airlines had a very, very bad week
• Carnival Cruise Line is offering passengers up to $200 of extra onboard credit if they keep their scheduled bookings through May 31

SEE ALSO: 5 US airlines are canceling flights to global destinations outside of China as coronavirus spreads — here's the list

DON'T MISS: How to lessen the chances of getting sick when traveling on planes in the age of coronavirus, according to experts

 -- via my feedly newsfeed

Sticking with Sanders till he stops.

Trump is not just a bad president. His regime is a fatal sickness infecting US, and not only US, society. A sickness rising from poverty, racism, the immense class divides, and out of control capitalism. If you compromise with this sickness, you will get it. Recovery will cost you your skin, if not your life, at the minimum.

To be honest, I have not met a "Bernie Bro" -- the abusive type of folks Elizabeth Warren used to slam Sanders (again) today with Rachel Maddow. We have anarchists, and some moral crusaders against "greed" who have their feet planted in mid-air politically, in West Virginia. But I do not see much meanness in them.

However, I know the fake leftist and fake militant type well, from years in the labor movement: Mostly middle and upper middle class -- almost always white -- youth organized into sects with big plans to invade the labor movement, replace its "sell-out" leadership, and turn it into some fantasy version of a Bolshevik brigade.

If the company had a skilled labor relations staff, and if the union leadership was inexperienced or naive, these types were easily manipulated into helping destroy the strike, if not the entire union.

Before I learned more economics, I was a better strike organizer than negotiator. The workers in most of these shops (they were all manufacturing during my service) could tell when the company was lying, but they did not always know why. Unless you could put a fire under the ass of the employer, he would rarely bother to tell you the truth.

Strikes are semi-legal, semi-civil, warfare. They require the maximum degree of unity and solidarity and DISCIPLINE among the members to win or prevail, or simply NOT LOSE, as most -- in my memory ALL -- strikes are defensive in motivation and NOT designed to ATTACK their employer. These constraints make it very difficult in the midst of a struggle to denounce any "supporter" showing up at the picket line every day. The union has NO weapon other than unity. In every case I can recall where this became a problem, at least one of the "fools" was not a fool, but a company agent deliberately plotting confrontations that would give the company grounds for injunctions against picketing and for mass arrests. In some cases the only remedy was to use our own muscle, and do our own policing -- a risky and imperfect solution. But if you go on strike, you are your own protection, or you lose -- -- no one but your own strength can save you. The courts will not defend you. The "fools" and parasites that latch on to the movement are not there for you to win -- they always prefer "glorious defeat". Fortunately, in most cases, our union had a deep bench of people very experienced in this matter. Not all unions or locals, however, did.

IN at least two instances, we had the fools fired as a condition of settling the strike. For which I earned the hatred of he fake Left -- I welcome it!

A presidential campaign on socialist values seems not unlike a meta-strike. Bernie's campaign is the first such mass campaign in US history. Other countries have more experience. In my view -- after the campaign -- there will be time to eval the wins and setbacks of his historic, and heroic effort. And it will not be for naught. He has brought a LIGHT to the the salvation of this nation and shined it on the path. His powerful campaigns must found broad based and sustainable organization to the Left so it can discard its 75 year marginalization.

While I do not agree with EVERY point in Bernie's program, I know from personal experience, he is real, and wise, and without guile. And I will support his campaign, in solidarity, until it is over, at the time HE and his team decides. If Joe Biden ends up as the nominee, Bernie will support him.

BTW, WITHOUT that support, and help, Biden will lose.

  

--

John Case
Harpers Ferry, WV

Enlighten Radio

Socialist Economics

Facebook

The Federal Reserve appears to be not just the first but the only instrumentality of the federal government to actually... [feedly]

The Federal Reserve appears to be not just the first but the only instrumentality of the federal government to actually...
https://www.bradford-delong.com/2020/03/the-federal-reserve-appears-to-be-not-just-the-first-but-the-only-instrumentality-of-the-federal-government-to-actually-do-so.html

The Federal Reserve appears to be not just the first but the only instrumentality of the federal government to actually do something significant in response to the coronovirus. Since this is overwhelmingly not a monetary policy but a public health problem, this is really, really, really, really not how things should be: Claudia Sahm: U.S. Economic Policymakers Need To Fight The Coronavirus Nowhttps://equitablegrowth.org/u-s-economic-policymakers-need-to-fight-the-coronavirus-now/: 'The Fed['s]... policy tools... are too blunt to help the people who need it most. People in our country are getting sick, and the most vulnerable workers could lose their jobs if they are too ill to show up. Monetary policy cannot address this gaping public health problem. Yes, the Fed might calm financial markets some. Yes, the Fed might help businesses and borrowers who are taking on debt. The Fed is doing its part, doing what it can. But it needs help. Chair Powell made that clear before the cameras, saying: "The virus outbreak is something that will require a multifaceted response. And that response will come in the first instance from healthcare professionals and health policy experts. It will also come from fiscal authorities, should they determine that a response is appropriate. It will come from many other public- and private-sector actors, businesses, schools, state and local governments.... This morning's G-7 statement... reflect[s] coordination at a high level in a form of a commitment to use all available tools..." What can the federal government do? Here is my proposal, grounded in more than a decade of research and forecasting at the Fed. Act fast. It is time for the federal government—all parts of it—to move swiftly against the spread of the coronavirus and any economic distress it may cause.... Provide financial support to people who are suffering.... Plan for the worst.... Have automatic support ready for a recession...  

 -- via my feedly newsfeed

‘State of the Unions’ Podcast: Coronavirus and the Labor Movement’s Response [feedly]

'State of the Unions' Podcast: Coronavirus and the Labor Movement's Response
https://aflcio.org/2020/3/4/state-unions-podcast-coronavirus-and-labor-movements-response

State of the Unions' Podcast: Coronavirus and the Labor Movement's Response

AFL-CIO

On the latest episode of "State of the Unions," podcast co-hosts Julie Greene Collier and Tim Schlittner talk with M.K. Fletcher, AFL-CIO Safety & Health specialist, about all things COVID-19, what the labor movement is doing and how we are responding to ensure that front-line workers' needs are taken care of.

Listen to our previous episodes:

• Talking with AFL-CIO Executive Vice President Tefere Gebre(UFCW) about his journey from being an Ethiopian refugee to success in the labor movement in Orange County, California, and in Washington, D.C., and the people and institutions that helped him along the way.

• A conversation with the Rev. Leah Daughtry, CEO of "On These Things," about Reconnecting McDowell, an AFT project that takes a holistic approach to revitalizing the education and community of McDowell, West Virginia, and how her faith informs her activism.

• Talking to Fire Fighters (IAFF) General President Harold Schaitberger about the union's behavioral health treatment center dedicated to treating IAFF members struggling with addiction and other related behavioral challenges. The discussion also addresses the toll of the Sept. 11, 2001, terrorist attacks on firefighters and their families, the response of the IAFF in its wake, and the life of a firefighter.

• A chat with the podcast team on their favorite episodes of 2019.

• A discussion with Cas Mudde, a political scientist at the University of Georgia, on the resurgence of right-wing politicians and activists across the world, much of it cloaked in populist, worker-friendly rhetoric.

• Talking with Guy Ryder, the director-general of the International Labor Organization, about the international labor movement, the idea of "decent labor" and the future of work.

"State of the Unions" is available on Apple Podcasts, Google Podcasts, Spotify, Stitcher and anywhere else you can find podcasts.

Kenneth Quinnell Wed, 03/04/2020 - 14:30  

 -- via my feedly newsfeed

Bernstein: Jobs report: Calm before storm as the virus hasn’t hit the job market…yet [feedly]

Jobs report: Calm before storm as the virus hasn't hit the job market…yet

Jared Bernstein

http://jaredbernsteinblog.com/jobs-report-calm-before-storm-as-the-virus-hasnt-hit-the-job-market-yet/

In yet another upside surprise to the U.S. labor market, payrolls grew strongly last month, up 273,000, well above expectations. Upward revisions to earlier months show that contrary to what many have expected, the monthly pace of job gains has accelerated in recent months. The unemployment rate held steady at 3.5 percent, but wage growth, which has been remarkably unresponsive to strong labor demand, remains a soft spot, stuck at 3 percent, year-over-year, just slightly ahead of consumer inflation which is running at around 2.5 percent.

Calm before the storm

As our smoother shows, averaging monthly payroll gains over various time spans, over the past 3 months, payrolls are up 243,000 per month. Over the past year, they're up less than that: 201,000. Given that most labor market analysts expected employment gains to slow as we closed in on full capacity in the job market, this acceleration is quite remarkable.

However, there are two counterpoints to this positive development. First, wage growth is also remarkable, but not in a good way: at 3 percent over the past year, it's surprisingly soft given these job gains and persistently low unemployment rate. Second, as regards the impact of the coronavirus on today's numbers, it's important to recognize that jobs reports are coincident, if not lagging, indicators. As of today, clear disruptions to both the global and US economy are growing increasingly clear in the data, from sharply reduced airline traffic, to supply chain disruptions, to falling consumer confidence. Forecasts are even more uncertain than usual in this climate–we still don't know how many people and places will be hit by quarantines, closed workplaces and schools, or even by Covid-19, the illness caused by the virus.

But that said, my guess is that GDP growth sharply decelerates in at least the first half of this year. In that regard, I view this jobs report as the calm before the storm. There was a slight bump up in involuntary part-timers last month, which could be a harbinger of what's to come, as labor demand gets hit by virus-induced decreased consumer demand, but it is a distinct possibility that in a few months, we'll longingly look back on this report.

What's not up with wage growth?!?

Both figures–the first for all private-sector workers, the second for middle-wage workers–show a deceleration in trend wage growth. How does that square with such a strong job market on the jobs side? One explanation is that this particularly series is weaker than others, but in fact, most series roughly agree that wage growth is, if not slowing down, not speeding up. Another is that workers just don't have the bargaining clout needed to press for the types of gains we'd expect in such tight conditions. This is surely part of the explanation, though it's tricky then to puzzle out why wages were growing at a good clip a relatively short while back.

Not at full employment

Another explanation, one consistent with econ 101, is that increased labor supply is meeting strong labor demand. The surfeit of available jobs is pulling new workers in off the sidelines and allowing incumbent workers to increase their hours. Some indicators, especially the fact that employment rates have increased over the past year, suggest there's something to this explanation. The critical implication is that there's still "room-to-run" in the U.S. job market. It is not at full employment.

This next figure underscores that case using price data, both the price of goods and labor (i.e., wage growth). The unemployment rate has been below the Fed's estimate of the lowest rate consistent with stable inflation–their so-called "natural rate"–for about two years! But not only has inflation consistently missed the Fed's 2 percent target from the downside; we now observe wage deceleration. Based on these relationships, I simply do not think there's a coherent argument that the U.S. labor market is at full capacity.

 -- via my feedly newsfeed