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  • Educating Workers For The 21st Century

    It is all about the skills. Workers need skills in order to be successful in an increasingly stratified global economy. Companies need skilled workers to compete. So says the OECD 's Andreas Schleicher . In this Big Think video, Schleicher argues that we need to rethink our approach to education. Preparing global citizens for success in the 21st century depends on educating people for "jobs that have not been created" and new technologies that will arise, not just the ones we already have.
  • China's Premier Says No to Stimulus Measures

    If you are waiting on China's government to make some policy moves to jump-start growth, you may want to find something to do with your time. As Aileen Wang and Adam Rose report for Reuters , Chinese Premier Li Keqiang has quashed any rumors of pending fiscal and/or monetary policy shifts. The almost unabated run of disappointing data this year has fuelled investor speculation the government would loosen fiscal or monetary policy more dramatically to shore up activity. But authorities so far have resisted broad stimulus measures. On Wednesday, the top economic planning agency said the government had less room to underpin growth because it did not want to inflate local debt risks. Still, authorities have take some steps to bolster growth. Earlier this month, they announced tax breaks for small firms and plans to speed up some infrastructure spending, including the building of rail lines. The national railway operator now plans to raise its annual investment by 20 billion yuan (1.9 billion pounds) to 720 billion yuan in 2014. There have also been moves to cut down on bureaucracy and to open up state-dominated sectors to private investors. In his speech, Li said China was positioned to sustain a reasonable level of growth over the long term. "We have set our annual economic growth target at around 7.5 percent," he said. "It means there is room for fluctuation. It does not matter if economic growth is a little bit higher than 7.5 percent, or a little bit lower than that." Read the full article here .
  • Federal Open Market Committee Minutes Show Measured Positive Outlook

    The Federal Reserve has released the minutes from the Federal Open Market Committee 's March meetings, and they read as measured, but also somewhat optimistic that slow, steady improvement will continue. Here is a key excerpt: In their discussion of monetary policy in the period ahead, members agreed that there was sufficient underlying strength in the broader economy to support ongoing improvement in labor market conditions. In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions since the inception of the current asset purchase program, members decided that it would be appropriate to make a further measured reduction in the pace of its asset purchases at this meeting. Members again judged that, if the economy continued to develop as anticipated, the Committee would likely reduce the pace of asset purchases in further measured steps at future meetings. Members also underscored that the pace of asset purchases was not on a preset course and would remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of purchases. Accordingly, the Committee agreed that, beginning in April, it would add to its holdings of agency mortgage-backed securities at a pace of $25 billion per month rather than $30 billion per month, and would add to its holdings of longer-term Treasury securities at a pace of $30 billion per month rather than $35 billion per month. While making a further measured reduction in its pace of purchases, the Committee emphasized that its holdings of longer-term securities were sizable and would still be increasing, which would promote a stronger economic recovery by maintaining downward pressure on longer-term interest rates, supporting mortgage markets, and helping to make broader financial conditions more accommodative. The Committee also reiterated that it would continue its asset purchases, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. One member, while concurring with this policy action, suggested that in future statements the Committee might provide further information about the trajectory of the Federal Reserve's balance sheet, including information about when the Committee might discontinue its policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in agency mortgage-backed securities. With respect to forward guidance about the federal funds rate, all members judged that, as the unemployment rate was likely to fall below 6-1/2 percent before long, it was appropriate to replace the existing quantitative thresholds at this meeting. Almost all members judged that the new language should be qualitative in nature and should indicate that, in determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee would assess progress, both realized and expected, toward its objectives of maximum employment and 2 percent inflation. However, a couple of members preferred to include language in the statement indicating that the Committee would keep rates low if projected inflation remained persistently below the Committee's 2 percent longer-run objective. One of these members argued that the Committee should continue to provide quantitative thresholds for both the unemployment rate and inflation. Members also considered statement language that would provide information about the anticipated behavior of the federal funds rate once it is raised above its effective lower bound. The Committee decided that it was appropriate to add language indicating that the Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run. In discussing this addition, a couple of members suggested that language along these lines might better be introduced at a later meeting. However, another member indicated that adding the new language at this stage could be beneficial for the effectiveness of policy because financial conditions depend on both the length of time that the federal funds rate is at the effective lower bound and on the expected path that the federal funds rate will follow once policy firming begins. It was also noted that the postmeeting statements, rather than the SEP, provide the public with information on the Committee's monetary policy decisions and that it was therefore appropriate for the postmeeting statement to convey the Committee's position on the likely future behavior of the federal funds rate. You can read the minutes here . Wall Street Journal reporter Victoria McGrane was looking forward to seeing the minutes after Fed officials seemed to reveal concern...
  • Unemployment Rate Stays at 6.7% as Employment, Labor Force Increase

    The U.S. economy added 192,000 jobs in March, according to the Department of Labor . There was a slight increase in the labor force participation, as it rose 0.2% to 63.2%. The headline number--the unemployment rate--stayed at 6.7%. Here's a look at the unemployment trends from the Bureau of Labor Statistics : Here are some of the key data from other areas we like to track in the monthly jobs report: The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 7.4 million in March. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work. In March, 2.2 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 698,000 discouraged workers in March, down slightly from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in March had not searched for work for reasons such as school attendance or family responsibilities. Read the full report from the BLS here .
  • Not Much Change in the Monthly Jobs Report

    The U.S. economy added 175,000 jobs in February, according to the Department of Labor . The unemployment rate rose slightly to 6.7% (from 6.6% last month). The labor force participation was level at 63.0%. Here's a look at the unemployment trends from the Bureau of Labor Statistics : Here are some of the key data from other areas we like to track in the monthly jobs report: The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 7.2 million in February. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work. In February, 2.3 million persons were marginally attached to the labor force, a decline of 285,000 over the year. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 755,000 discouraged workers in February, down by 130,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in February had not searched for work for reasons such as school attendance or family responsibilities. Read the full report from the BLS here .
  • Unemployment Picture in Europe Stable but Bleak

    The number of unemployed men and women across Europe, as estimated by Eurostat , increased by about 17,000 in January. The unemployment rate is now at 10.8% across the EU 28 (compared to 10.7% in December) and 12.0 % in the euro area (11.9% in December). Austria and Germany are the only members states to be at 5.0% unemployment or less. The unemployment rate in Greece and Spain remains above 25%. And while there was some improvement for workers under 25, jobs remain particularly hard to come by for young workers. From the report: In January 2014, 5.556 million young persons (under 25) were unemployed in the EU28, of whom 3.539 million were in the euro area. Compared with January 2013, youth unemployment decreased by 171 000 in the EU28 and by 87 000 in the euro area. In January 2014, the youth unemployment rate5 was 23.4% in the EU28 and 24.0% in the euro area, compared with 23.7% and 24.1% respectively in January 2013. In January 2014, the lowest rates were observed in Germany (7.6%), Austria (10.5%) and the Netherlands (11.1%), and the highest in Greece (59.0% in November 2013), Spain (54.6%) and Croatia (49.8% in the fourth quarter of 2013). Read the full report here .
  • Lagarde: Three Reform Steps for Spain (and Europe)

    Christine Lagarde was in Bilbao, Spain this morning to discuss the state of the economy in Europe in general, and Spain in particular. The IMF managing director noted that there are encouraging signs of growth across the EU. But the big challenge remains the high unemployment rates in member nations. Spain, of course, is the poster child for the jobs problem. Lagarde: I am here reminded by President Rajoy who said: “Spain is out of recession but not out of the crisis….The task now is to achieve a vigorous recovery that allows us to create jobs." I fully agree—creating jobs must be the overriding focus for Spain. What does this mean in practical terms? It means there can be no let-up in the reform momentum. The strong reform momentum must be maintained. And we can see three key areas where further progress will be crucial. The first area is labor market reforms—which need to be deepened so that they can work for all. Both firms and their workers need to be assured that they can reach appropriate agreements on working conditions and wages. This is essential for jobs to be protected and created. Workers need to be directly supported as well—through enhanced skills training and job-search assistance for the unemployed. And by further cutting the tax costs of employing people, especially the low-paid, the unemployed would face fewer barriers in finding work. The second area concerns debt—which needs to be lowered. For firms, this means helping insolvent but viable ones restructure their debts, so they can stay in business and continue to invest and hire people. For the government, it means continuing to reduce the fiscal deficit in a gradual, growth-friendly way—especially by relying more on indirect taxes. The third and final area is the business environment—which needs to be strengthened. Making it easier for businesses to start up and grow will lift their capacity to create employment. Making domestic firms more competitive will also boost their employment and productivity. The government’s plans to liberalize professional services and promote free trade among Spain’s regions go very much in this direction. Read the full speech here .
  • CPI Continues Steady Rise

    The Consumer Price Index for All Urban Consumers rose 0.1% in January, according to the Bureau of Labor Statistics . The CPI-U has grown in eight of the last nine months (in October it came in at 0.0). The all items index has grown 1.6% over the last 12 months. From the Bureau of Labor Statistics release: Increases in the indexes for household energy accounted for most of the all items increase. The electricity index posted its largest increase since March 2010, and the indexes for natural gas and fuel oil also rose sharply. These increases more than offset a decline in the gasoline index, resulting in a 0.6 percent increase in the energy index. The index for all items less food and energy also rose 0.1 percent in January. A 0.3 percent increase in the shelter index was the major contributor to the rise, but the indexes for medical care, recreation, personal care, and tobacco also increased. In contrast, the indexes for airline fares, used cars and trucks, new vehicles, and apparel all declined in January. The food index rose slightly in January. The index for food at home rose 0.1 percent, with major grocery store food groups mixed. The all items index increased 1.6 percent over the last 12 months; this compares to a 1.5 percent increase for the 12 months ending December. The index for all items less food and energy has also risen 1.6 percent over the last 12 months. The energy index has risen 2.1 percent over the span, and the food index has increased 1.1 percent. Here's a look at the CPI for All Urban Consumers over the last year: Read the full release here .
  • CEA Final Report on the Effect of Recovery Act

    On the occasion of the fifth anniversary of the American Recovery and Reinvestment Act, the Council of Economic Advisers has released a report to Congress on the economic impact of the act. The CEA stands firmly behind the act, and the report points to several measures as signs of the effectiveness of the government's plan. Among the evidence presented: GDP per capita returned to pre-crisis levels in four years, an the economy has added over 2 million jobs a year since ARRA. The estimates for the long term impact of ARRA are bullish, with the CEA touting a significant multiplier effect from overall fiscal policy: CEA Estimates of the Recovery Act and Subsequent Fiscal Measures Combined. The combined effect of the Recovery Act and the subsequent countercyclical fiscal legislation is substantially larger and longer lasting than the effect of the Recovery Act alone. The Recovery Act represents only about half of total fiscal support for the economy from the beginning of 2009 through the fourth quarter of 2012. Moreover, as shown in Figures 7 and 8, the bulk of the effects of the other fiscal measures occurred as the Recovery Act was phasing down. These other measures thus served to sustain the recovery as effects of the Recovery Act waned. The CEA multiplier model indicates that by themselves these additional measures increased the level of GDP by between 1.0 and 1.5 percent per quarter from mid-2011 through the end of calendar year 2012. Altogether, summing up the effects for all quarters through the end of calendar year 2012, the Recovery Act and subsequent fiscal measures raised GDP by an average of more than 2.4 percent of GDP annually—totaling a cumulative amount equal to about 9.5 percent of fourth quarter 2008 GDP. The contribution of all fiscal measures to employment is equally substantial. Other fiscal measures beyond the Recovery Act are estimated to have raised employment by 2.8 million job- years, cumulatively, through the end of calendar year 2012. Adding these jobs to those created or saved by the Recovery Act, the combined countercyclical fiscal measures created or saved more than 2.3 million jobs a year through the end of 2012—or 8.8 million job-years in total over the entire period. Estimates from Private Forecasters. Private forecasters and domestic and international institutions have used large-scale macroeconomic models, mostly to estimate the effects of either the Recovery Act by itself or other policies in isolation. The models used by these individuals and organizations generally employ a similar multiplier-type analysis as is found in CEA and CBO work, although they vary considerably in their structure and underlying assumptions. Although no outside estimates of the total impact of all the fiscal measures are available, Table 6 displays the estimates of the impact of the Recovery Act offered by several leading private-sector forecasters before the Act was fully implemented. Despite the differences in the models, these private-sector forecasters all estimated that the Recovery Act would raise GDP substantially from 2009 to 2011, including a boost to GDP of between 2.0 and 3.4 percent in 2010. Read the full report here . For a helpful summary, read a summary from CEA chair Jason Furman here .
  • Treasury Secretary Lew on the "End" of Too Big to Fail

    Treasury Secretary Jacob Lew is feeling good about the economy. In an interview with Charlie Rose last night, Lew expressed optimism that growth will pick up in 2014, and though he tended to remain cautious about his predictions, he suggested that our elected officials in Washington are making progress in economic policy around debt and immigration. Rose and Lew covered a lot of ground--from domestic issues to emerging markets and China. In this excerpt, Lew argued that banking rules are significantly stronger now than they were six years ago: We will post the full video when it becomes available. See also: Damian Paletta 's "12 Takeaways" from the interview at the Wall Street Journal Washington Wire blog, here .
  • BLS Jobs Report: Unemployment Rate Down to 6.6% as Economy Adds 113,000 Jobs

    The U.S. economy added 113,000 jobs in January, and the civilian labor force rose by nearly half a million (499,000) as the number of lon-term-unemployed declined and the labor force participation rate edged up, according to the Department of Labor . The unemployment rate dropped to 6.6% (from 6.7%). The labor force participation rate is back up to 63.0%. Here's a look at the unemployment trends from the Bureau of Labor Statistics : Here are some of the key data from other areas we like to track in the monthly jobs report: The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell by 514,000 to 7.3 million in January. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work. In January, 2.6 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 837,000 discouraged workers in January, about unchanged from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.8 million persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities. Read the full report from the BLS here .
  • Unemployment in Euro Zone Remains Flat

    The number of unemployed men and women across Europe, as estimated by Eurostat , was at 26.2 million in December. That works out to an unemployment rate across the EU28 of 10.7%. Technically that is an improvement from November, when the rate was 10.8%. But it signals that employment has been flat for a few months now. In the euro area, the unemployment rate was 12.0%, down from 12.1% in November. In December 2012, the unemployment across the euro area was 11.9%, and it was 10.8% in the EU28. From the report: Among the Member States, the lowest unemployment rates were recorded in Austria (4.9%), Germany (5.1%) and Luxembourg (6.2%), and the highest in Greece (27.8% in October 2013) and Spain (25.8%). Compared with a year ago, the unemployment rate increased in fourteen Member States, fell in thirteen and remained stable in Sweden. The highest increases were registered in Cyprus (13.9% to 17.5%), Greece (26.1% to 27.8% between October 2012 and October 2013), the Netherlands (5.8% to 7.0%) and Italy (11.5% to 12.7%) The largest decreases were observed in Ireland (14.0% to 12.1%), Latvia (14.0% to 12.1% between the third quarters of 2012 and 2013), Portugal (17.3% to 15.4%), Hungary (11.0% to 9.3% between November 2012 and November 2013) and Lithuania (13.0% to 11.4%). Read the full report here .
  • Ongoing Risk of Global Jobless Recovery

    We have been tracking unemployment figures in the U.S. closely, but what about global unemployment? The International Labour Organization 's latest Global Employment Trends is out, and it shows how wide reaching the unemployment problem is. ILO researchers expect the total number of unemployed workers to keep rising in 2014 (and beyond) even as GDP improves in economies around the world. Here's a look at the latest figures and projections from the report: The global unemployment rate remained at 6.0 per cent of the global labour force, unchanged from 2012. The number of unemployed around the world is estimated to have reached 201.8 million in 2013, an increase of 4.9 million from a revised 196.9 million in the previous year. There were 31.8 million more unemployed persons around the world in 2013 than in 2007, prior to the onset of the global economic crisis (figure 4). On the basis of current macroeconomic projections, the ILO expects little improvement in the global labour market in 2014, with the global unemployment rate ticking up to 6.1 per cent and the number of un- employed rising by a further 4.2 million. Should a sustainable economic recovery fail to materialize once again, a downside scenario would imply that unemployment would rise much faster than in the baseline (figure 5). In such a scenario, global economic growth in 2014 would reach only 2.8 per cent, which is 0.1 per- centage points less than in 2013 and 0.8 percentage points below the baseline. Also, after 2014, output growth would be around 1 percentage point lower in each year than in the base- line. Based on these assumptions, unemployment is projected to increase by a further 5 mil- lion jobseekers relative to the baseline projection of 215 million in 2018. The unemployment rate would reach 6.2 per cent in 2018 compared to 6.0 per cent in the baseline. Most of the additional increase in unemployment in the downside scenario would occur in the Developed Economies and European Union region, with almost 3 million more unemployed by 2018 than in the baseline scenario. Download the full report here . And watch this summary of the report:
  • Unemployment Rate Drops to 6.7%

    The number of unemployed Americans dropped significantly in December. There were 490,000 fewer unemployed persons in December than November, according to the Department of Labor . The unemployment rate dropped to 6.7% (from 7.0% in November). The labor force participation rate dropped to 62.8% (after rising to 63.0% in November), meaning a lot of those people who had been unemployed left the labor force during the month. Here's a look at the unemployment trends from the Bureau of Labor Statistics : Here are some of the key data from other areas we like to track in the monthly jobs report: The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 7.8 million in December. These individuals were working part time because their hours had been cut back or because they were unable to find full- time work. In December, 2.4 million persons were marginally attached to the labor force , little changed from a year earlier. (The data ar e not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a j ob sometime in the prior 12 months. They were not counted as unemployed because they had not search ed for work in the 4 weeks preceding the survey. Among the marginally attached, there were 917,000 discouraged workers in December, down by 151,000 from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in December had not searched for work for reasons such as school attendance or family responsibilities. Read the full report from the BLS here .
  • Planet Money: Rise of the Service Sector

    It looks like the U.S. economy gained another 200,000 or so jobs in December ( Labor Department numbers come out Friday). Moody's chief economist Mark Zandi told USA Today that "job gains are broad-based across industries, most notably in construction and manufacturing." Any gains in the manufacturing sector are surely welcome, but those jobs make up a smaller and smaller percentage of overall U.S. jobs each month. As Planet Money 's Quoctrung Bui points out: The United States has a cultural obsession with manufacturing. When policymakers stump about job growth and job creation, they often focus on manufacturing jobs. But for more than 60 years, the number of manufacturing jobs has been stagnant, while the number of service jobs has exploded. Service jobs now account for over 80 percent of all private sector jobs. Read Where the Jobs Are, In 2 Graphs , and see the second graph, here .
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