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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (53230)	7/10/2006 8:09:38 PM
From: regli	Respond to of 116555

"With overall population growth continuing to slow and labor force participation not expected to rise, we probably need to adjust our benchmarks for what level of employment growth is consistent with economic growth near potential and a steady unemployment rate. It used to be that increases in payroll employment that averaged 150,000 per month were consistent with flat unemployment. Now that number may be closer to 100,000." I can't believe he actually said that in the face of a growing population. As you say, a declining labor force participation rate in a so-called economic expansion is not a normal state of affairs. In fact, on the one hand the low unemployment rate is trumpeted all over the map but consistently low job creation rates are hardly ever mentioned either by Fed members or politicians. Somebody tell me again that the Fed is not de-facto a political body!

To: mishedlo who wrote (53230)	7/10/2006 9:32:29 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 116555

I want the Fed to keep raising rates. With this in mind, in the immediate future, I much prefer the Fed to talk down any shortfall in job growth, than to under-estimate inflation or its impact. The worst outcome now would be pressure to "stimulate" the economy with lower rates to try to forestall job losses. Job losses are inevitable in dismantling the bubble. Its unfortunate, but there you are. The crack addict needs fewer drugs and will have to feel bad for a couple of years. More drugs will only make things worse. .