Friday, August 29, 2008

Anemic consumer spending

In spite of the tax rebates that went out in May through mid-July, consumer spending has been pretty weak. Real consumption (PCE) rose 0.3 percent in May, but then fell 0.1 and 0.4 percent in June and July.

Part of the reason real consumption (quantities) is so sluggish is because prices have been racing ahead. The PCE deflator rose 0.4, 0.7, and 0.6 percent in May, June, and July, mostly because of food and energy prices.

Wednesday, August 20, 2008

Obamanomics and an overview of recent economic trends

This Sunday's Times magazine contains an article about Barack Obama that is arguably more interesting for its historical scope.

It provides an overview of where the nation has been and seems to be heading in terms of typical economic well-being, government policies, and the interaction between the two. I'm not sure I believe the author's assertion that Obama's emerging economic policy perspective is both more liberal and more conservative than his predecessors', depending on how you look at it. Rather, I think it is a synthesis of what we have learned about the macroeconomic impacts of policies, not unlike a prevailing view in any field of study.

Friday, August 15, 2008

Japan and population decline

A Times article today discussed Japan's aging population and the economic strains produced by a shrinking labor force.

The article reports about 1 million foreign workers in Japan, or about 1.5% of a total labor force of about 67 million. By comparison, the U.S. has about 24 million foreign-born workers, or 16% of the U.S. labor force.

If you think immigration politics are brutal here in the U.S., the unease about immigration in Japan is enough to make you wince. The article reports that "no Japanese interviewed welcomed the idea of immigrants [in his or her town] or elsewhere in Japan."