Jan J. J. Groen
@jjjgroen.bsky.social
Economist. Formerly @newyorkfed.bsky.social and @bankofengland.bsky.social Interests: #inflation #economy #forecasting. Econ PhD @tinbergeninstitute.bsky.social Views are my own.
https://substack.com/@macromarketnotes
https://substack.com/@macromarketnotes
7/Annual composition-adjusted #wage growth still exceeds rates consistent with 2% #inflation and aligns more with “Main Street” inflation expectations: wage growth trends likely align more with 3%-3.5% inflation.
July 7, 2025 at 12:19 PM
7/Annual composition-adjusted #wage growth still exceeds rates consistent with 2% #inflation and aligns more with “Main Street” inflation expectations: wage growth trends likely align more with 3%-3.5% inflation.
4/Combining job-exit and job-finding rates gives an alternative, flow-consistent #Unemployment rate, which was broadly stable. Comparing headline and smoothed flow-consistent unemployment rate trends suggest a forthcoming drift to and stabilization in the 4.2%-4.3% range.
July 7, 2025 at 12:19 PM
4/Combining job-exit and job-finding rates gives an alternative, flow-consistent #Unemployment rate, which was broadly stable. Comparing headline and smoothed flow-consistent unemployment rate trends suggest a forthcoming drift to and stabilization in the 4.2%-4.3% range.
3/June data on total and short-term unemployed and employed persons helps estimate the job-finding rate, which increased as overall #Unemployment fell more than new unemployment: odds of exiting unemployment currently hover around 49%.
July 7, 2025 at 12:19 PM
3/June data on total and short-term unemployed and employed persons helps estimate the job-finding rate, which increased as overall #Unemployment fell more than new unemployment: odds of exiting unemployment currently hover around 49%.
1/ #Payrolls rose 147k in June; April & May revised up by 16k. 3-m trends run above the 110k breakeven pace for 4.1% #Unemployment rate. Adjusting this pace for higher
CBO's population outlook suggests payrolls trends still below this pace. Some upside risk to the unemployment rate remains.
CBO's population outlook suggests payrolls trends still below this pace. Some upside risk to the unemployment rate remains.
July 7, 2025 at 12:19 PM
1/ #Payrolls rose 147k in June; April & May revised up by 16k. 3-m trends run above the 110k breakeven pace for 4.1% #Unemployment rate. Adjusting this pace for higher
CBO's population outlook suggests payrolls trends still below this pace. Some upside risk to the unemployment rate remains.
CBO's population outlook suggests payrolls trends still below this pace. Some upside risk to the unemployment rate remains.
6/The higher 2025 core #PCE #inflation projection suggests a year/year path that shows a worser overshoot of the #FederalResesrve 's 2% inflation target than in the previous #SEP. After 5 yrs of overshooting, the Fed expects to fall even further behind its goal of achieving 2% PCE inflation.
June 19, 2025 at 3:15 PM
6/The higher 2025 core #PCE #inflation projection suggests a year/year path that shows a worser overshoot of the #FederalResesrve 's 2% inflation target than in the previous #SEP. After 5 yrs of overshooting, the Fed expects to fall even further behind its goal of achieving 2% PCE inflation.
5/Risk diffusion indices for #unemployment and core #inflation eased relative to the March #SEP. But both indices remain at elevated levels not seen since mid-2023, suggesting that the Fed continues to see stagflation as a major risk, with inflation as the key policy driver.
June 19, 2025 at 3:15 PM
5/Risk diffusion indices for #unemployment and core #inflation eased relative to the March #SEP. But both indices remain at elevated levels not seen since mid-2023, suggesting that the Fed continues to see stagflation as a major risk, with inflation as the key policy driver.
4/The distribution of #FOMC members’ policy rate projections tell another story: The median (red lines) is unchanged, but the central tendency (blue boxes) moved up to the current 4.375% Fed funds target range midpoint. More members (vs March) want to keep policy rates unchanged this year.
June 19, 2025 at 3:15 PM
4/The distribution of #FOMC members’ policy rate projections tell another story: The median (red lines) is unchanged, but the central tendency (blue boxes) moved up to the current 4.375% Fed funds target range midpoint. More members (vs March) want to keep policy rates unchanged this year.
Recent #inflation suggest that it has not yet fully been hit by tariffs given elevated inventories + still low effective tariffs. With #unemployment gradually drifting up + elevated inflation expectations, #FederalReserve keeping rates stable today aligns well with fundamentals.
June 18, 2025 at 5:58 PM
Recent #inflation suggest that it has not yet fully been hit by tariffs given elevated inventories + still low effective tariffs. With #unemployment gradually drifting up + elevated inflation expectations, #FederalReserve keeping rates stable today aligns well with fundamentals.
13/Net hiring & labor force growth gives a benchmark for initial #joblessclaims in line with a constant #unemployment rate over the month (incl using 2020-2025 CBO population estimates). Initial claims have been above the CBO-based benchmark (orange line 👇) for most of 2025.
June 13, 2025 at 8:03 PM
13/Net hiring & labor force growth gives a benchmark for initial #joblessclaims in line with a constant #unemployment rate over the month (incl using 2020-2025 CBO population estimates). Initial claims have been above the CBO-based benchmark (orange line 👇) for most of 2025.
12/Continued #joblessclaims, however, are somewhat elevated in non-seasonally adjusted terms relative to recent years and continue to rise further.
June 13, 2025 at 8:03 PM
12/Continued #joblessclaims, however, are somewhat elevated in non-seasonally adjusted terms relative to recent years and continue to rise further.
11/Seasonally adjusting weekly data is always a delicate matter. Compared to previous years, current non-adjusted initial #joblessclaims run about in line with recent years, esp. 2023.
June 13, 2025 at 8:03 PM
11/Seasonally adjusting weekly data is always a delicate matter. Compared to previous years, current non-adjusted initial #joblessclaims run about in line with recent years, esp. 2023.
8/Both the Median and 16% Trimmed Mean #CPI rates are overshooting the #FederalReserve 's 2% #inflation target over six months (around 3% in core PCE terms), though both have eased gradually in the last two months.
June 13, 2025 at 8:03 PM
8/Both the Median and 16% Trimmed Mean #CPI rates are overshooting the #FederalReserve 's 2% #inflation target over six months (around 3% in core PCE terms), though both have eased gradually in the last two months.
6/With still sizeable pre-tariff hike #inventories and an effective #tariff rate that still does not full reflect the end-result of the announced (and amended) tariff hikes, sharply higher goods #inflation in May was not expected.
June 13, 2025 at 8:03 PM
6/With still sizeable pre-tariff hike #inventories and an effective #tariff rate that still does not full reflect the end-result of the announced (and amended) tariff hikes, sharply higher goods #inflation in May was not expected.
4/Core goods #CPI was -0.04% m/m in May, owing to a -0.3% drop in the new and used cars CPI. The anticipation of #tariff hike announcements led to strong Q1 spending, #imports and #inventory builds, esp. in cars.
June 13, 2025 at 8:03 PM
4/Core goods #CPI was -0.04% m/m in May, owing to a -0.3% drop in the new and used cars CPI. The anticipation of #tariff hike announcements led to strong Q1 spending, #imports and #inventory builds, esp. in cars.
3/A key driver was CPI Rent of Shelter which slowed to +0.3% m/m from +0.4% in April. Across regions Northeast OER #inflation eased but apart from the West, yr/yr OER inflation are well above pre-COVID average elsewhere -- a nationwide return to pre-COVID trend is unlikely this year.
June 13, 2025 at 8:03 PM
3/A key driver was CPI Rent of Shelter which slowed to +0.3% m/m from +0.4% in April. Across regions Northeast OER #inflation eased but apart from the West, yr/yr OER inflation are well above pre-COVID average elsewhere -- a nationwide return to pre-COVID trend is unlikely this year.
7/Annual composition-adjusted #wage growth still exceeds rates consistent with 2% #inflation though not all of the “Main Street” inflation expectation acceleration is justified. Wage growth trends likely align more with 3% inflation.
June 6, 2025 at 8:56 PM
7/Annual composition-adjusted #wage growth still exceeds rates consistent with 2% #inflation though not all of the “Main Street” inflation expectation acceleration is justified. Wage growth trends likely align more with 3% inflation.
4/Combining job-exit and job-finding rates gives an alternative, flow-consistent #Unemployment rate, which was broadly stable. Comparing headline and smoothed flow-consistent unemployment rate trends continue to suggest a forthcoming drift up in the unemployment rate to 4.3%.
June 6, 2025 at 8:56 PM
4/Combining job-exit and job-finding rates gives an alternative, flow-consistent #Unemployment rate, which was broadly stable. Comparing headline and smoothed flow-consistent unemployment rate trends continue to suggest a forthcoming drift up in the unemployment rate to 4.3%.
3/May data on total and short-term unemployed and employed persons helps estimate the job-finding rate, which jumped as overall #Unemployment rose less than new unemployment: odds of exiting unemployment increased notably from 42% to 49%.
June 6, 2025 at 8:56 PM
3/May data on total and short-term unemployed and employed persons helps estimate the job-finding rate, which jumped as overall #Unemployment rose less than new unemployment: odds of exiting unemployment increased notably from 42% to 49%.
2/The #Unemployment rate was unchanged at 4.2% in May. But more precisely, it rose from 4.187% to 4.244%. The 3-digit UR has drifted up since January. Household employment fell 696k and the labor force participation dropped 20bps, to 62.4%.
June 6, 2025 at 8:56 PM
2/The #Unemployment rate was unchanged at 4.2% in May. But more precisely, it rose from 4.187% to 4.244%. The 3-digit UR has drifted up since January. Household employment fell 696k and the labor force participation dropped 20bps, to 62.4%.
1/ #Payrolls rose 139k in May; March & April revised down by 95k. 3-m trends run above the 110k breakeven pace for 4.2% #Unemployment rate. Adjusting this pace for higher CBO population outlook suggests payrolls trends still fall short of this pace. Upside risks to UR remain.
June 6, 2025 at 8:56 PM
1/ #Payrolls rose 139k in May; March & April revised down by 95k. 3-m trends run above the 110k breakeven pace for 4.2% #Unemployment rate. Adjusting this pace for higher CBO population outlook suggests payrolls trends still fall short of this pace. Upside risks to UR remain.
7/But, the annual trend in real spending remains solid and above its underlying trend, so one should not expect a really dramatic downshift in consumption for the second half of the year. #Consumption isn’t signaling a recession just yet.
May 30, 2025 at 10:42 PM
7/But, the annual trend in real spending remains solid and above its underlying trend, so one should not expect a really dramatic downshift in consumption for the second half of the year. #Consumption isn’t signaling a recession just yet.
5/Headline #Consumption growth on a three-month basis accelerated further above its underlying spending growth pace in April. Month/month, however, real spending slowed as durable goods fell.
May 30, 2025 at 10:42 PM
5/Headline #Consumption growth on a three-month basis accelerated further above its underlying spending growth pace in April. Month/month, however, real spending slowed as durable goods fell.
4/The stock of excess #savings has NOT run out and continues to be a tailwind for #Consumption. Between March and April, it *increased* by around $1.3 billion and equaled about $298 billion in April.
May 30, 2025 at 10:42 PM
4/The stock of excess #savings has NOT run out and continues to be a tailwind for #Consumption. Between March and April, it *increased* by around $1.3 billion and equaled about $298 billion in April.
3/Wage income growth was revised up and went up in April. Versus a neutral rate using trend output and labor share growth rates and 2% #inflation, yr/yr household wage income growth now runs somewhat above the medium-term pace consistent with the #FederalReserve 's inflation target.
May 30, 2025 at 10:42 PM
3/Wage income growth was revised up and went up in April. Versus a neutral rate using trend output and labor share growth rates and 2% #inflation, yr/yr household wage income growth now runs somewhat above the medium-term pace consistent with the #FederalReserve 's inflation target.