Key Takeaways * A structural model estimated on 78 years of U.S. data separates two forces in the labor market: technology shocks, which permanently shift labor productivity, and non-technology shocks, which move employment and output together without any permanent effect on productivity. * Non-technology shocks — a broad category that includes monetary
The labor market is not collapsing. It is not strengthening. The most honest description is the one the data keeps repeating: stabilizing in a low-hire, low-fire equilibrium, not accelerating. For the next several months that is the operating assumption.
The personal saving rate has fallen to 2.6%. The Treasury Secretary calls it optimism. Forty years of data say it's something else.
New home sales fell in April, another sign that deteriorating household financial conditions are cooling housing demand. The rise in new home inventory sets up future price declines.
Today's report from the Bureau of Economic Analysis shows that household budgets are on thin ice. The basic story is simple. Consumer budgets are being squeezed from three sides at once. Prices are still rising. Interest rates are still high. And income growth, after inflation, has been slipping.
The 10-year Treasury is climbing into the April PCE print, and the headlines will frame it as an inflation scare or a growth story. The component decomposition shows it's neither.