Bottom-line: Mild Recession.
The euro area suffered the mildest possible recession during the winter after Russia’s war in Ukraine sent energy prices soaring.
The euro area suffered the mildest possible recession during the winter after Russia’s war in Ukraine sent energy prices soaring.
Docent: 미국 실업수당 청구건수가 예상을 상회하면서 이 지표에 대한 궁금증이 증가한 가운데, 모건스탠리가 이 지표에 대한 핵심 질문에 답하는 보고서를 발간함. i) 메사추세츠의 사례처럼 부정확한 데이터(실제 실업수당에 해당하지 않는 청구를 인식)에 의한 급증은 아니며, ii) 일반적으로 경기침체 39주를 앞두고 실업수당 청구건수가 증가하지만, 제조업 지표나 실업수당 지표 모두 항상 훌륭한 알람 역할을 하지는 못함. iii) 매 주 발표되는 실업수당 청구건수 사이의 변동폭은 25,000건 이내의 경우 무시할 수 있는 폭이며, 자동차 업종이나 교육 관련 업종의 경우 불규칙하거나 일시적인 일자리 끊김이 있어 계절성을 포착하기도 어렵다고 할 수 있음. iv) 실업률의 경우 노동통계국에서 집계하며, 일을 할 수 있어 구인 중이지만 실직 중인 모든 인원을 포함하지만, 실업수당 청구건수는 노동부에서 집계하며 실업 보험(UI)의 혜택을 받는 사람에 한함. 모두가 이 혜택을 신청하는 것도 아니며, 이 혜택에 해당되지 못하는 사람들도 많기 때문에 그 차이가 발생함. 평균적으로 1/3 정도의 실업자들만 이 혜택을 받을 수 있음. 그리고 처음으로 구직하는 사람도 포함되지 않음. 그러므로 앞으로는 실업률 보다는 실업수당 청구가 더 늘어날 것으로 예상하는 것이 옳음.
Jobless claims surprised to the upside this week, reaching the highest level since 2021. This week we review key questions related to this data series and recent prints. (1) Was the upward surprise a consequence of fraudulent claims? No, judging from the information we have so far, fraud does not seem to be the driver this time. Around a month ago, Massachusetts reported a steep increase in initial claims for some weeks that turned out to have been caused by fraudulent activity in the system and not actual individuals filing for benefits. A clear pattern caused by fraud is an increase in initial claims that is not followed by a boost in continuing claims (people renewing benefits on a weekly basis). Fraudulent initial claims get registered in the system automatically but are then dropped once fraud is verified. Unpaid fraudulent claims are not reflected in continuing claims data, which explains the disconnect between the two series. This is exactly what happened in Massachusetts. (2) Are initial claims a good predictor of a recession? Initial claims usually start rising 39 weeks prior to a recession, which is why the series is considered a leading indicator of economic activity. But the increase in initial claims is by no means a sufficient condition for a recession. As we pointed out in our Midyear Outlook, there have been false alarms in the past where both initial claims and ISM diffusion indexes pointed to recessions that never happened. (3) How relevant are weekly prints? They are simply too noisy to draw conclusions. The pre-Covid standard deviation of the change in weekly claims is around 15k, which means that weekly increases of 25k or less are statistically similar to zero. Moreover, volatility might increase in the coming summer months. Some auto plants often take temporary breaks, which might be at different dates depending on the year, making it hard to capture them through historical seasonal adjustments. (4) What's the link between claims and unemployment? Although both indicators highlight labor market slack, they measure different things. Unemployment comes from the Bureau of Labor Statistics (BLS) household survey, which aims to identify people out of work who actively looked for a job in the prior 4 weeks and are currently available for work. In turn, claims come from the Department of Labor, and basically count unemployed people who are receiving unemployment insurance (UI) benefits. Not all unemployed workers apply for benefits, and some are not even eligible. In fact, in ordinary times most workers don't receive UI benefits. UI does not cover people that voluntarily quit or first-time job seekers. And typically informal or undocumented workers are not eligible. Moreover, low-wage workers with intermittent hours often find it hard to reach the minimum amount of steady earnings needed to qualify for the benefits. The ratio between continuing claims and unemployed workers. On average, only a third of unemployed workers receive benefits. There was a clear jump during the pandemic because the government relaxed UI requirements, but it is evident that the ratio increases during slowdowns. Hence, we should perhaps expect more relevant upswings in claims than in unemployment ahead.
Jobless claims surprised to the upside this week, reaching the highest level since 2021. This week we review key questions related to this data series and recent prints. (1) Was the upward surprise a consequence of fraudulent claims? No, judging from the information we have so far, fraud does not seem to be the driver this time. Around a month ago, Massachusetts reported a steep increase in initial claims for some weeks that turned out to have been caused by fraudulent activity in the system and not actual individuals filing for benefits. A clear pattern caused by fraud is an increase in initial claims that is not followed by a boost in continuing claims (people renewing benefits on a weekly basis). Fraudulent initial claims get registered in the system automatically but are then dropped once fraud is verified. Unpaid fraudulent claims are not reflected in continuing claims data, which explains the disconnect between the two series. This is exactly what happened in Massachusetts. (2) Are initial claims a good predictor of a recession? Initial claims usually start rising 39 weeks prior to a recession, which is why the series is considered a leading indicator of economic activity. But the increase in initial claims is by no means a sufficient condition for a recession. As we pointed out in our Midyear Outlook, there have been false alarms in the past where both initial claims and ISM diffusion indexes pointed to recessions that never happened. (3) How relevant are weekly prints? They are simply too noisy to draw conclusions. The pre-Covid standard deviation of the change in weekly claims is around 15k, which means that weekly increases of 25k or less are statistically similar to zero. Moreover, volatility might increase in the coming summer months. Some auto plants often take temporary breaks, which might be at different dates depending on the year, making it hard to capture them through historical seasonal adjustments. (4) What's the link between claims and unemployment? Although both indicators highlight labor market slack, they measure different things. Unemployment comes from the Bureau of Labor Statistics (BLS) household survey, which aims to identify people out of work who actively looked for a job in the prior 4 weeks and are currently available for work. In turn, claims come from the Department of Labor, and basically count unemployed people who are receiving unemployment insurance (UI) benefits. Not all unemployed workers apply for benefits, and some are not even eligible. In fact, in ordinary times most workers don't receive UI benefits. UI does not cover people that voluntarily quit or first-time job seekers. And typically informal or undocumented workers are not eligible. Moreover, low-wage workers with intermittent hours often find it hard to reach the minimum amount of steady earnings needed to qualify for the benefits. The ratio between continuing claims and unemployed workers. On average, only a third of unemployed workers receive benefits. There was a clear jump during the pandemic because the government relaxed UI requirements, but it is evident that the ratio increases during slowdowns. Hence, we should perhaps expect more relevant upswings in claims than in unemployment ahead.
Bottom-line: hawkish pause.
The big surprise is that the median FOMC participant wants two more rate hikes this year.
The big surprise is that the median FOMC participant wants two more rate hikes this year.
Bottom-line: 중앙은행의 경제성장률 예측 변화보다 실업률 예측 변화가 중요한데, 내년도 실업률 예측치 변화(+0.4%p) 규모는 항상 경기침체를 동반하는 수준이기 때문임.
By forecasting a 0.4 ppt rise in the unemployment rate next year, (from 4.1% to 4.5%), the Fed implicitly suggests a significantly high risk of a recession, even though its GDP forecast doesn’t explicitly suggest as much. Since 1970, a rise in joblessness of this magnitude has always been accompanied by a recession.
By forecasting a 0.4 ppt rise in the unemployment rate next year, (from 4.1% to 4.5%), the Fed implicitly suggests a significantly high risk of a recession, even though its GDP forecast doesn’t explicitly suggest as much. Since 1970, a rise in joblessness of this magnitude has always been accompanied by a recession.
Powell: 인플레이션 통제가 최우선 목표임을 강조함.
Powell emphasizes that the inflation fight is still job 1.
Powell emphasizes that the inflation fight is still job 1.
Powell: 대다수 위원들이 올해 더 많은 통화 긴축을 지지했다고 함.
Powell says nearly all the FOMC members expect further tightening this year.
Powell says nearly all the FOMC members expect further tightening this year.
Powell: 2% 수준의 인플레이션까지 가는 길은 아직 멀리 있음.
Powell says the process of getting inflation back to the 2% target “has a long way to go.”
Powell says the process of getting inflation back to the 2% target “has a long way to go.”
Powell: 올해 실업률 전망과 달리 내년도 실업률 전망은 높아진 것을 집으며, 노동시장 약화가 중앙은행의 금리인상에 의해 발생할 것으로 봄.
Powell points out the FOMC is projecting the unemployment rate to rise to 4.5% in 2024. So while unemployment rate forecasts were cut for this year, the FOMC still sees the labor market weakening in response to Fed hikes -- just a lot of this happening next year.
Powell points out the FOMC is projecting the unemployment rate to rise to 4.5% in 2024. So while unemployment rate forecasts were cut for this year, the FOMC still sees the labor market weakening in response to Fed hikes -- just a lot of this happening next year.
Powell: 15개월 전으로 돌아가보면, 금리를 얼마나 빨리 올려야 하냐의 문제에 있었음. 이번 회의의 동결 경우 마찬가지인데, 적정한 수준의 금리인상의 속도 조절 과정에 있는 것이며, 7월 통화정책회의 또한 데이터에 의존하게 될 것(I Do Expect That July Meeting Will Be ‘Live’ Meeting.)임.
* 그렇다면, 7월 통화정책회의가 25bp 인상을 단언하고 있지 않다는 의미임.
Keep in mind, if the July meeting is a “live” decision, that suggests a quarter-point hike isn’t baked in, then.
* 그렇다면, 7월 통화정책회의가 25bp 인상을 단언하고 있지 않다는 의미임.
Keep in mind, if the July meeting is a “live” decision, that suggests a quarter-point hike isn’t baked in, then.
Market Reaction: Stocks are getting closer to breakeven on the day. S&P 500 is down less than 0.1% now.
Powell: 점 도표에서 보여진 강경한 태도와 달리, 파월은 몇 가지 사항에 대해 정해진 바가 없다고 함으로써 주식시장에 탄력을 불어넣음.
The Powell rally is starting. The S&P has recovered most of the lost ground. Powell seems to downplay the dot plot by saying no decision has been made for the next few meetings.
The Powell rally is starting. The S&P has recovered most of the lost ground. Powell seems to downplay the dot plot by saying no decision has been made for the next few meetings.
Powell: 7월 통화정책회의 전에 우리가 볼 수 있는 경제지표가 얼마 없다는 점을 질문 받았는데, 이에 파월은 우리가 이미 본 지표들을 종합해 결론에 도달할 것이라 밝힘.
Powell is asked about the July meeting, as there isn’t a ton of economic data to come out before then. So what will the committee be using to inform their judgement? Powell says you’re adding the data to the other data the Fed has already seen -- i.e. you can draw conclusions from multi-month data.
Powell is asked about the July meeting, as there isn’t a ton of economic data to come out before then. So what will the committee be using to inform their judgement? Powell says you’re adding the data to the other data the Fed has already seen -- i.e. you can draw conclusions from multi-month data.
Powell: 충분히 제한적인 수준의 정책금리는 어디냐는 질문에, 과거와 달리 현재는 너무 낮지도 너무 높지도 않은 균형적인 수준의 정책금리에 근접한 것 같다고 함. 다만, 물가에 대한 위험은 여전하다고 밝힘.
Asked what is “sufficiently restrictive” for the Fed’s key rate, Powell says “we’ve moved much closer to that destination” with the actions taken so far. The risks of overdoing it and underdoing it are now “closer” to being in balance. But risks to inflation are still to the upside, he says.
Asked what is “sufficiently restrictive” for the Fed’s key rate, Powell says “we’ve moved much closer to that destination” with the actions taken so far. The risks of overdoing it and underdoing it are now “closer” to being in balance. But risks to inflation are still to the upside, he says.