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Unused Labor Capacity

Mar 07 2023

CBO: The Ministry Of Misinformation?

  • Mar 7, 2023

After failing to publish an estimate for the GDP Output Gap for nine months, the Congressional Budget Office has just decreed that the economy has yet to reach its full-employment potential!

Feb 07 2023

Is Good News Ultimately “Bad News?”

  • Feb 7, 2023

Let’s momentarily imagine that both the Index of Leading Economic Indicators and the yield curve “fail,” and a recession in 2023 is sidestepped. What might the GDP growth outlook be in that scenario? It wouldn’t be good, and (ironically) that’s because of strong labor market conditions on which the economic bulls now rest their case!

Sep 08 2022

Labor Is The Limiting Factor

  • Sep 8, 2022

If the economy slips into recession, the Fed will get all the blame. But it’s worth taking a step back to consider that the die has already been cast: The “capacity” for the U.S. economy to grow is nearly exhausted. Specifically, we’re referring to the capacity available in the labor market.

Aug 19 2022

When There’s No Slack, It’s A Bad Time To Slack Off

  • Aug 19, 2022

The scene in our neighborhood in the last two summers has become one of relaxed and well-tanned professionals out in their yards overseeing home improvement and landscaping projects. No surprise: Not a single one has told us they’re less productive when working from home!

Nov 05 2016

A New Take On The Labor Market

  • Nov 5, 2016

Politicians bemoan the lack of “good-paying jobs,” but what’s the current perspective of employers? According to a simple measure developed by economist Edward Renshaw many decades ago, employers see a lack of “unused labor capacity” in the U.S. that should lead to yet another year of disappointing GDP growth in 2017.