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June 18, 2014

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Posted: 18 Jun 2014 12:06 AM PDT

'Eurozone Mired in Recession Pause'

Posted: 17 Jun 2014 10:00 AM PDT

The CEPR Euro Area Business Cycle Dating Committee has just issued its findings following a meeting last week in London. This is the summary from a companion Vox EU piece:

Eurozone mired in recession pause, by CEPR Business Cycle Dating Committee, Vox EU: The simplest business cycle dating algorithm declares recessions over after two consecutive quarters of positive GDP growth. By that metric, the Eurozone recession has been over since 2013Q1. This column argues that growth and improvements in the labour market have been so anaemic that it is too early to call the end of the Eurozone recession. Indeed, if this is what an expansion looks like, then the state of the Eurozone economy might be even worse than economists feared.

The Economy May Be improving, But Worker Pay Isn’t

Posted: 17 Jun 2014 09:03 AM PDT

This is a good follow-up to my column (linked in the post below this one):

The Economy May Be improving. Worker Pay Isn't, by Neil Irwin, Washington Post: The latest economic data out Tuesday morning was generally good. Home building activity rebounded nicely in May after weak results in April. Consumer prices rose 0.4 percent in May, such that inflation over the last year is now 2.1 percent, about in line with what the Federal Reserve aims for.
But that inflation news carried with it a depressing side note. ... Average hourly earnings for private-sector American workers rose about 49 cents an hour over the last year... But that wasn't enough to cover inflation over the year, so in "real" or inflation adjusted terms, hourly worker pay fell 0.1 percent over the last 12 months. Weekly pay shows the same story...
Pause for just a second to consider that. Five years after the economic recovery began, American workers have gone the last 12 months without any real increase in what they are paid. ...
There had been some hints here and there that worker pay was starting to rise in the last few months... But it wasn't sustained. ...
The latest numbers should give pause to any Federal Reserve officials ... who see wage pressures as evidence that the economy is overheating..., the evidence points to more of what we've seen for most of the last six years: Employees have little negotiating power to demand higher pay.

The Latest Inflation Worry Is, As Usual, Overblown

Posted: 17 Jun 2014 08:02 AM PDT

I have a new column:

The Latest Inflation Worry Is, As Usual, Overblown, by Mark Thoma: Worries about inflation have been pervasive ever since the Fed began trying to lift the economy out of recession. If the Fed does not tighten policy very soon we have been told repeatedly, an outbreak of inflation is inevitable. But so far, those worries have been unfounded.
The latest round of worries is tied to the belief that labor markets are tighter than it appears from standard statistics such as the unemployment rate. ...

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