As I proposed in my work, CoreLogic utilizes an approach that mirrors the S&P/Case-Shiller house price index. This approach measures current market prices by using only new leases, and controls for housing quality by tracking the same units over time.
Pointer from Tyler Cowen.
The standard BLS measure is more like a smoothed lagging indicator. Relative to the BLS path for rental inflation since 2008, Ozimek’s revised path shows inflation dipping by more early in the recession and then climbing by more during the recovery (should I say “recovery”?).
Unlike Ozimek, I see this as having zero impact for the macroeconomic theory of the Phillips Curve. That theory deals with the rate of wage change, and changing how you measure rent inflation does not change the history of wage inflation. To show a meaningful trade-off between wage growth and unemployment in recent years, you are going to have to find another data-massaging trick.
Of course, I admit that I used consumer prices in my recapitulation of Phillips Curve history. If I were extending that essay today, I would say that the Phillips Curve died again in 2008-2016, which is another period in which conventional macro does poorly. The Kling/FischerBlack view of inflation, which is not confounded by recent data, is presented in my latest book.
Should I say “recovery”?
Outside of China, please a nation that has done better than the US since 2009? I know it is not a great economy, but why is the unemployment rate lower today than any time in the Reagan Revolution?
Labor participation.
By the way, I don’t criticize people like Obama for secular trends. I do criticize him for “never let a crisis go to waste” kind of stuff.
I’m glad he wants cop body cameras, for example, although it is none of his business and 20 year late front-running as usual
No, we probably shouldn’t say “recovery.” Recovery implies a Keynesian/monetarist hiccup followed by resumption of trend. If you believe that fine. I believe the prior trend was just the period we were in denial about the new normal. But I suspect that by the time the new trend is accepted as destiny a lot of the fads will be over and we’ll be back to the old normal again.
It still seems like we should say ‘Recovery’ but recoveries are simply different today than ever. The GDP is slowly growing and private payrolls are higher than they were in 2009 so it does officially constitute Recovery. (Also for conservatives they should remember that Obama and lots of Republican governors had a significant decrease public employment during the last 8 years something that has never happened during the Post-WW2 years.)
What I am seeing in the modern global economy, is all developed nations will evidently become their version of the “Japan” post boom economy after 1990. Some growth, low rates and falling working population. Europe this generation hit Japan in the post-2009 boom and the US will hit the Japanese wall after next generation. And looking at China they are simply Fast-Forwarding straight into Japan economies.
Because despite paying decades of lip service they suddenly got behind cutting costs exactly when even I would agree it wasn’t the time to start doing it?
They had no choice, and wherever they did I’m sure they chose wrongly anyway.
Not to pile on, but here goes, this is one of those bellweathers for me that Obama is just a well-disguised hack. You even had people like Tyler Cowen begging for support for public sector employment. And yet Obama chose to rake the country through the coals for his stupid ACA vanity boondoggle.
“. . . Obama is just a well-disguised hack.”
There’s a disguise? Where?
Sorry, couldn’t resist.
Given the 2016 election and recent history, Obama is the best hack we have had since Second term Clinton or maybe First Term Reagan!
Republicans aren’t well designed hacks? If I was President, the BEA would have no choice, but to upwardly revise GDP. IMO, they suck at collection and indeed, employment growth and GDP are out of alignment and the latter is to blame.
This is what happens when you have a IT revolution. It fucks up the math. fwiw, Growth in the 2001-07 expansion would likely get a nice boost as well.
No. Democrats never shut up about how they are the very serious people as they set up home e-mail servers and meet with defendants on the tarmac.
I assumed most states starting over-paying state employees for two reasons:
1) When late 1990s and then 2004 – 2007 housing bubble hot job market occurred, states had to increase wages for employees.
2) Because of the housing bubble, the amount of state taxes vastly increased.
Unfortunately, the tighter labor markets putting pressure on hiring teachers. Here in Cali we are basically taking teachers & graduates from Red States.
Like I said above. As soon as things are unsustainable, people will assume it is a permanent condition.
Getting yourself in a teacher hiring pickle is almost as crazy as screwing up the housing market.
To bring it full circle, can we at least get The Fed to incorporate housing prices for this near depression they dragged us through?
In Cali, we can save money by hiring teachers paid peanuts in Kansas who are willing to move to California!!!
Smart, especially for a shingle state, I don’t think that is going to head off the next asset bubble.