ES EN
Menu Menú

Publications

Publicaciones

Search Publications

Buscar publicaciones

Filters Filtro de búsqueda

to a

clear selection Quitar los filtros

none

Article Artículo

The State of the Labor Market, What the JOLTS Data Tell Us

The Bureau of Labor Statistics released data from its March Job Openings and Labor Turnover Survey (JOLTS) yesterday. It got some attention because the job openings figure rose substantially, bringing the job opening rate to 4.3 percent, the highest since the survey was first fielded in December of 2000. This is somewhat higher than the 3.7 percent hire rate. Since the hiring rate had previously exceeded the job opening rate, as seen below, this was taken as fresh ammunition by the "hard to get good help" gang. 

fredgraph1

The argument they are making is that businesses have jobs open and want to hire, but they just can't find the people with the right skills. The problem with this story is that we see a sharp rise in the ratio of openings to hires everywhere, including industries like retail trade and restaurants, where we generally don't think of as requiring high skills.

In 2007, before the Great Recession, the job opening rate in retail was 2.6 percent. The hiring rate was 4.9 percent, a gap of 2.3 percentage points. In March, the job opening rate was 4.3 percent with a hiring rate of 4.4 percent, a gap of just 0.1 percentage point.

CEPR / May 09, 2018

Article Artículo

Yes Kids, You Can Have a Promising Career Scaring People About the Debt: Just Ask George Will

Yes, we have yet another column warning about the government debt from George Will, with a brief interlude warning about household debt as well. Yes, the national debt is a really big number, but quickly, here is why we need not be as concerned as George Will wants us to be.

First, on the debt service point, Will wants us to be scared that interest rates will rise, making debt service a very large share of the budget. Well, the Fed controls interest rates and unless inflation starts to rise rapidly (in which case the real value of the debt falls), there is no obvious reason that it should allow interest rates to rise to high levels.

It is also important to note that the Fed itself owns much of the debt. (It has more than $4 trillion in assets.) The interest on the debt owned by the Fed is refunded to the Treasury, meaning there is no net burden from this debt for taxpayers. The amount of this refund was more than $100 billion last year, or 0.5 percent of GDP. The interest burden net of money refunded now stands at about 1.0 percent of GDP, compared to more than 3.0 percent of GDP in the first half of the 1990s.

Suppose we get Will's bad story and the economy goes into recession. Of course, the deficit will rise due to the recession, as tax collections fall and we pay out more money on programs like unemployment insurance and food stamps. Also, we would likely want a fiscal stimulus to boost the economy.

The deficit hawks would like people to believe that no one will lend to us because of our high debt burden. That seems unlikely (Japan's debt-to-GDP ratio is more than twice that of the United States and its long-term interest rates are near zero), but let's assume it is true. What would stop the Fed from directly buying up debt issued by the US government that private investors didn't want?

The folks yelling "inflation" have to go back to the start of this story. The economy is in a recession, how would we get inflation? There is a story that the Fed's actions could cause the dollar to fall against the currencies of our trading partners. Let's imagine the dollar falls by 20 to 30 percent against the currencies of our trading partners as it did in the years from 1986 to 1990.

This would be equivalent to imposing tariffs of 20 to 30 percent on imports and granting a subsidy of 20 to 30 percent on all US exports. That would mean a sharp reduction in the size of the trade deficit, providing a huge stimulus to the U.S. economy. Are you scared yet?

CEPR / May 06, 2018