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
END/The #FederalReserve faces a highly uncertain outlook due to Trump Administration #tariffs policies. Given a labor market that’s slowing gradually, elevated #inflation expectations and sticky underlying inflation trends, I still expect the Fed to stay on hold this year.
July 7, 2025 at 12:19 PM
END/The #FederalReserve faces a highly uncertain outlook due to Trump Administration #tariffs policies. Given a labor market that’s slowing gradually, elevated #inflation expectations and sticky underlying inflation trends, I still expect the Fed to stay on hold this year.
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.
6/Adjusting wage growth for sectoral and skill composition using a correction method from the
@atlantafed.org June month/month hourly wage growth remained at 0.2% but went up to 0.4% for May; production & non-supervisory workers' wage data was not affected.
@atlantafed.org June month/month hourly wage growth remained at 0.2% but went up to 0.4% for May; production & non-supervisory workers' wage data was not affected.
July 7, 2025 at 12:19 PM
6/Adjusting wage growth for sectoral and skill composition using a correction method from the
@atlantafed.org June month/month hourly wage growth remained at 0.2% but went up to 0.4% for May; production & non-supervisory workers' wage data was not affected.
@atlantafed.org June month/month hourly wage growth remained at 0.2% but went up to 0.4% for May; production & non-supervisory workers' wage data was not affected.
5/Hourly #wage growth was +0.2% m/m (down from an unrevised 0.4% in May) and 3.7% y/y, down from 3.8%. For production & non-supervisory workers, June m/m hourly wage growth was similar to May at +0.3%, n y/y terms is was also stable at 3.9%.
July 7, 2025 at 12:19 PM
5/Hourly #wage growth was +0.2% m/m (down from an unrevised 0.4% in May) and 3.7% y/y, down from 3.8%. For production & non-supervisory workers, June m/m hourly wage growth was similar to May at +0.3%, n y/y terms is was also stable at 3.9%.
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%.
2/The #Unemployment rate declined 10bps to 4.1% in June. More precisely, it went from 4.244% to 4.117%. This was the first decline in the 3-digit UR in 2025. Household employment grew 93k and the labor force participation dropped from 62.4% to 62.3%.
July 7, 2025 at 12:19 PM
2/The #Unemployment rate declined 10bps to 4.1% in June. More precisely, it went from 4.244% to 4.117%. This was the first decline in the 3-digit UR in 2025. Household employment grew 93k and the labor force participation dropped from 62.4% to 62.3%.
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.
END/I continue to expect unchanged policy rates in 2025, keeping the Fed funds target to 4.25%-4.50%. The #FederalReserve could very well take policy rate cuts for 2025 publicly off the table at its September #FOMC meeting.
June 19, 2025 at 3:15 PM
END/I continue to expect unchanged policy rates in 2025, keeping the Fed funds target to 4.25%-4.50%. The #FederalReserve could very well take policy rate cuts for 2025 publicly off the table at its September #FOMC meeting.
7/The yr/yr core PCE #inflation path in the June #SEP suggests that average m/m core inflation rate for June-Dec 2025 should be about 0.3% and this should result in a significant acceleration in H2 2025. July PCE data will differentiate the SEP’s path from a more muted path akin to 2024.
June 19, 2025 at 3:15 PM
7/The yr/yr core PCE #inflation path in the June #SEP suggests that average m/m core inflation rate for June-Dec 2025 should be about 0.3% and this should result in a significant acceleration in H2 2025. July PCE data will differentiate the SEP’s path from a more muted path akin to 2024.
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.
3/The updated #SEP saw many #FOMC members shifting their outlook with a modest increase for the 2025 #unemployment rate, and (again) a large upward core #PCE #inflation revision for 2025. Despite this, the median 2025 Fed funds rate projection stayed at two cuts.
June 19, 2025 at 3:15 PM
3/The updated #SEP saw many #FOMC members shifting their outlook with a modest increase for the 2025 #unemployment rate, and (again) a large upward core #PCE #inflation revision for 2025. Despite this, the median 2025 Fed funds rate projection stayed at two cuts.
2/Chair Powell’s post-meeting remarks really sang the same tune as at previous meetings this year: the labor market remains relatively stable, slowing #GDP growth, #inflation likely to accelerate & uncertainty peaked but remains historically elevated.
June 19, 2025 at 3:15 PM
2/Chair Powell’s post-meeting remarks really sang the same tune as at previous meetings this year: the labor market remains relatively stable, slowing #GDP growth, #inflation likely to accelerate & uncertainty peaked but remains historically elevated.
1/As expected, the #FOMC kept the Fed funds target range at 4.25%-4.50% at its June meeting, with a post-meeting statement that continues to acknowledge the impact of elevated economic uncertainty.
June 19, 2025 at 3:15 PM
1/As expected, the #FOMC kept the Fed funds target range at 4.25%-4.50% at its June meeting, with a post-meeting statement that continues to acknowledge the impact of elevated economic uncertainty.
For more detail (as well as my views on May #retailsales) visit Macro Market Notes: janjjgroen.substack.com/p/may-retail...
May Retail Sales and June FOMC Preview
May real retail sales on goods excl. gas and autos bounced back, but real bar/restaurant spending contracted. The Fed will likely stay on hold.
janjjgroen.substack.com
June 18, 2025 at 5:58 PM
For more detail (as well as my views on May #retailsales) visit Macro Market Notes: janjjgroen.substack.com/p/may-retail...
The #FederalReserve's SEP will be updated today. I don’t expect major changes & 2025’s expected rate cuts should remain at 2.
Post-meeting remarks will likely continue to emphasize #inflation expectations' role in shaping the Fed’s response to this administration's policies.
Post-meeting remarks will likely continue to emphasize #inflation expectations' role in shaping the Fed’s response to this administration's policies.
June 18, 2025 at 5:58 PM
The #FederalReserve's SEP will be updated today. I don’t expect major changes & 2025’s expected rate cuts should remain at 2.
Post-meeting remarks will likely continue to emphasize #inflation expectations' role in shaping the Fed’s response to this administration's policies.
Post-meeting remarks will likely continue to emphasize #inflation expectations' role in shaping the Fed’s response to this administration's policies.
END/While the #unemployment rate likely will grind higher, the #FederalReserve will remain on hold for a while given the underlying #inflation trend as well as the expected inflationary impact of import #tariff hikes.
June 13, 2025 at 8:03 PM
END/While the #unemployment rate likely will grind higher, the #FederalReserve will remain on hold for a while given the underlying #inflation trend as well as the expected inflationary impact of import #tariff hikes.
14/While initial #joblessclaims maybe historically low, this does NOT indicate a tight labor market. With initial claims remaining above the CBO-based benchmark (orange line in chart 👆) into June there continues a buildup of upside risks to #unemployment over the near term.
June 13, 2025 at 8:03 PM
14/While initial #joblessclaims maybe historically low, this does NOT indicate a tight labor market. With initial claims remaining above the CBO-based benchmark (orange line in chart 👆) into June there continues a buildup of upside risks to #unemployment over the near term.