Change in Labor Market Conditions Indicator: Still mediocre

During the spring of 2016, the economy stopped worsening. That trend started in mid-2014, when the Fed began the “tightening talk”. As expectations deteriorated strongly in early 2016, the Fed “eased-up”. That pattern is clear in all production/output indicators and is present in the CLMCI. It´s not a coincidence that conditions in the labor market weakened with the fall in NGDP growth, it is also not a coincidence that labor market conditions stop worsening and show a tenuous upside when NGDP growth reverses the trend. As we argued in our latest NGDP Outlook: The basic message remains the same as…

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