US Economic Briefing: Phillips Curve January 5, 1 Dr. Edward Yardeni 51-97-73 eyardeni@ Mali Quintana --1333 aquintana@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents Wage Inflation & Unemployment Rate 1- Wages & PCED 3 Average Hourly Earnings Quits Rate, ECI, & AHE 5- Unit Labor Costs & Inflation 7- January 5, 1 / Phillips Curve www.
1 1 1 Figure 1. Wage Inflation & Unemployment Rate WAGE INFLATION & UNEMPLOYMENT RATE (using average hourly earnings) Unemployment Rate (percent) Average Hourly Earnings* 1 1 1 7 7 7 7 7 9 9 9 9 9 1 1 1 1 1 * Production & nonsupervisory workers. 1 Figure. WAGE INFLATION & SHORT-TERM UNEMPLOYMENT RATE 1 1 Short-Term Unemployment Rate* (percent) Average Hourly Earnings** 1 7 7 7 7 7 9 9 9 9 9 1 1 1 1 1 * Unemployed for less than 7 weeks. ** Production & nonsupervisory workers. Page 1 / January 5, 1 / Phillips Curve www.
1 Figure 3. Wage Inflation & Unemployment Rate WAGE INFLATION & UNEMPLOYMENT RATE 1 1 Underemployment Rate* Plus Unemployment Rate Average Hourly Earnings*** 1 1 U- Rate** 1 1 1 1 1 7 7 7 7 7 9 9 9 9 9 1 1 1 1 1 * Total number of people working part time for economic reasons as percent of civilian labor force. ** Unemployed plus marginally attached plus part time for economic reasons as percent of civilian labor force. *** Production & nonsupervisory workers. 1 Figure. WAGE INFLATION & UNEMPLOYMENT RATE (using Employment Cost Index) 1 1 Unemployment Rate (.1) ECI: Wages & Salaries Private Industry (.) Q3 9 9 9 9 9 1 1 1 1 1 Source: US Department of Labor, Bureau of Labor Statistics. Page / January 5, 1 / Phillips Curve www.
1 1 Figure 5. WAGES & PRICES Wages & PCED 1 1 Average Hourly Earnings* Core PCED 7 7 7 7 7 9 9 9 9 9 1 1 1 1 1 * Production & nonsupervisory workers 1 Figure. PRICE INFLATION & UNEMPLOYMENT RATE 1 1 1 Unemployment Rate (percent) Core PCED 7 7 7 7 7 9 9 9 9 9 1 1 1 1 1 Source: US Department of Labor, Bureau of Labor Statistics. Nov Page 3 / January 5, 1 / Phillips Curve www.
5.5 5..5 Figure 7. Average Hourly Earnings AVERAGE HOURLY EARNINGS & TENANT-OCCUPIED RENT 5.5 5..5. 3.5 3..5. Nov. 3.5 3..5. 1.5 1..5. -.5 Average Hourly Earnings: Production & Nonsupervisory Workers CPI: Tenant-Occupied Rent 9 91 9 93 9 95 9 97 9 99 1 3 5 7 9 1 11 1 13 1 15 1 17 1 19 1.5 1..5. -.5 1 11 1 9 7 5 3 1 Figure. HEALTH CARE WAGE & PRICE INFLATION Average Hourly Earnings: Health Care (.) CPI: Medical Care Services (1.) 91 9 93 9 95 9 97 9 99 1 3 5 7 9 1 11 1 13 1 15 1 17 1 19 Oct 1 11 1 9 7 5 3 1 Page / January 5, 1 / Phillips Curve www.
1 Figure 9. Quits Rate, ECI, & AHE ECI WAGES & SALARIES vs. UNEMPLOYMENT RATE 1 Short-Term Unemployment Rate* (3.) ECI: Wages & Salaries Private Industry (.) Q3 1 3 5 7 9 91 93 95 97 99 1 3 5 7 9 11 13 15 17 19 1 * Unemployed for less than 7 weeks. Source: US Department of Labor, Bureau of Labor Statistics. Figure 1. TOTAL PRIVATE: QUITS RATE vs ECI WAGES 3 Quits Rate: Total Private (.) ECI Wages (.) 3 Q3 Oct 1 1 3 5 7 9 1 11 1 13 1 15 1 17 1 19 1 Page 5 / January 5, 1 / Phillips Curve www.
. Figure 11. AVERAGE HOURLY EARNINGS & QUITS RATE Quits Rate, ECI, & AHE... 3. 3. Quits Rate* (.) Average Hourly Earnings* (.9) 3. 3.. Sep.. Jul... 1. 1. 1. 7 9 1 11 1 13 1 15 1 17 1 1. * Private industry. 11. 1. 1. 9. 9. 9... 7. 7. 7... 5. 5. 5... 3. 3. 3... 1. 1. 1. Figure 1. ATLANTA FED S MEDIAN WAGE GROWTH TRACKER* & UNEMPLOYMENT RATE Wage Growth Tracker Overall (3.) Unemployment Rate (percent) (.1) 1997 199 1999 1 3 5 7 9 1 11 1 13 1 15 1 17 1 Nov 11. 1. 1. 9. 9. 9... 7. 7. 7... 5. 5. 5... 3. 3. 3... 1. 1. 1. * Three-month moving average of median wage growth. Source: Bureau of Labor Statistics and Federal Reserve Bank of Atlanta. Page / January 5, 1 / Phillips Curve www.
. 5. 5. Figure 13. Unit Labor Costs & Inflation NFIB "UNFILLED JOB OPENINGS" & ATLANTA FED S MEDIAN WAGE GROWTH TRACKER* 35 5... 3. 3. 3... 1. 1. 1. Wage Growth Tracker Overall (3.) NFIB Small Business Owners: Percent With Positions Not Able to Fill Right Now (3-ma)(3.) 97 9 99 1 3 5 7 9 1 11 1 13 1 15 1 17 1 Nov 3 5 15 1 5 * Three-month moving average of median wage growth, yearly percent change basis. Source: National Federation of Independent Business and Federal Reserve Bank of Atlanta. 15 Figure 1. NONFARM UNIT LABOR COSTS & CONSUMER PRICE INDEX 15 1 Unit Labor Costs Consumer Price Index Ex Food & Energy 1 5 5 Nov Q3-5 7 7 7 7 7 9 9 9 9 9 1 1 1 1 1 Source: US Bureau of Labor, Bureau of Labor Statistics. -5 Page 7 / January 5, 1 / Phillips Curve www.
1 Figure 15. Unit Labor Costs & Inflation NONFARM BUSINESS UNIT LABORS COSTS & IMPLICIT PRICE DEFLATOR 1 1 Unit Labor Costs Implicit Price Deflator 1 Q3-7 7 7 7 7 9 9 9 9 9 1 1 1 1 1 Source: US Department of Labor, Bureau of Labor Statistics. - Page / January 5, 1 / Phillips Curve www.
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