Unemployment
Fed’s Williams says labour market figures are accurate
Current unemployment rate “accurately” reflects the state of the labour market; San Francisco Fed researches a broader measure of the market
Only ‘gradual’ increases in interest rates on the cards at the Fed
FOMC members think only “gradual” adjustments to monetary policy are warranted; current pace will strengthen the labour market and see inflation rise
El Salvador governor highlights benefits of increasing minimum wage
New minimum wage legislation will improve the living standards of 19.9% of households, says El Salvador governor; raise will also have positive impact on total economic growth
Monitoring the labour market is key – BoE’s Saunders
Bank of England’s MPC member says unemployment should stay below the equilibrium 5% estimate in 2017 – but, should “warning signs appear”, changes to forecasts could be made
BoE paper drops rational expectations to solve unemployment puzzles
Replacing rational expectations with adaptive learning helps fit the standard theory of unemployment to the data, economists find
Pressure in the Danish labour market becoming ‘more evident’
All spare resources in the labour market have already been used, report says; employment has risen by 105,000 people from Q4 2012 to Q2 2016
BoE’s new MPC member suggests tweaks to policy approach
Michael Saunders says models that assume pre-crisis level for equilibrium unemployment may be misleading; new FPC member grilled on other commitments in the US
Benefits to inflation overshooting target – Chicago Fed president
Policy-makers “willing to accept” inflationary risk that comes with falling unemployment if Fed overshoots target, Evans says
Eurozone employment-to-GDP-growth ratio has recovered strongly – ECB
Employment growth concentrated in Spain and Germany; productivity remains “stagnant at pre-crisis levels”
RBA’s Kent considers life after the mining boom
Australian economy is well into an adjustment, following the country’s mining investment boom; RBA correctly identified the patterns of adjustment, but was surprised by the magnitude
Tightening policy during slowdown is not ideal, but necessary – Sarb governor
More fiscal or monetary stimulus will not generate growth in South Africa, says Kganyago, who instead stresses inflation outcomes need to be lowered
Canadian working paper examines effect of downward nominal wage rigidity on wage growth
Average wage growth higher due to DNWR after recession, authors note; signs of heterogeneity in DNWR effects
US inflation target within ‘hailing distance’, says Fischer
The Fed is “close” to its targets says vice-chair; despite recent weak GDP figures, Fischer expects investment to recover in coming months
Credit contractions are significant cause of unemployment, researcher says
Data from 20 OECD countries shows that contractions in credit affect total, youth and long-term unemployment measures, a working paper from the Bank of Austria argues
IMF’s Lipton argues for greater economic inclusion in South Africa
David Lipton urges reforms to remedy the fact that one-third of the working population is “effectively excluded” from the economy; suggests policies to build confidence and lift growth
US Phillips Curve “not broken” – IMF paper
Working paper finds economic behaviour since the crisis reflects different sources of disturbances, and not a change in the dynamics of the Phillips curve
Yellen says July hike ‘not impossible’ as Fed holds
Fed keeps policy unchanged as widely anticipated; expected path of interest rate hikes becomes more gradual while the long-run level is revised down again
IMF paper points to short-term benefits of product market reforms
Authors find product market reforms can deliver benefits in short term as well as long, though effects may be curtailed where credit is constrained
Yellen upbeat but concerned by weak jobs data
Janet Yellen expects continued progress to Fed’s objectives; says latest labour market report is “concerning” but warns against reading too much into it
US jobs report puts Fed hike expectations on ice
Small increase in non-farm payrolls leads market to all but write off prospect of a rate hike later this month; Lael Brainard and Eric Rosengren keen to see more data
ECB paper explores public and private employment link
Research contradicts literature that claims an increase in public employment crowds out private employment, at least in recessions
Fed's Rosengren warns against exceeding full employment
Boston Fed president says significantly overshooting full employment, which he estimates at 4.7%, could lead to an overheating economy and “rapid removal” of monetary policy accommodation
Philadelphia Fed president warns of ‘mismatch’ between education and business
Patrick Harker says there is a disparity between the education offered and practical skills needed by businesses in the US, which has likely contributed to slow recovery following crisis
Dudley flags inflation uncertainty and expectations concern
New York Fed president says uncertainties around his assessment of the inflation outlook have increased; warns of slide in household expectations and stresses need for ‘close scrutiny’