Media Statement: Decrease in the CPI is welcomed good news

Media Statement: Decrease in the CPI is welcomed good news

Erik - CPI decrease

Media Statement: Decrease in CPI is welcomed good news, but new policy is not good news for working class and poor

Today the U.S. Bureau of Labor Statistics announced that the Consumer Price Index (CPI) remained even in July, reducing the year-over-year inflation rate to 8.5%. That is a reduction in the rate from June, which was 9.1%.

The Georgia Center for Opportunity’s (GCO) take: “July’s ever-so-slight decrease in the CPI is a sliver of welcome good news in an economic environment where there doesn’t seem to be much good news,” said Erik Randolph, GCO’s director of research. “July’s price level — defined as the weighted average price across the board for goods and services purchased by households — ticked down 0.2% at an annualized rate. But we should pause before getting too enthusiastic about the news. The CPI is still 8.5% higher than 12 months ago, and it is unlikely that the miniscule CPI drop will turn into a sustainable trend. A big reason is federal policy. Congress is about to hike spending yet again with the erroneously named Inflation Reduction Act, and the Federal Reserve acknowledged that its goal is to just bring the inflation rate down to 2%, meaning they will take steps to prevent the price level from coming down from its elevated level. This is horrible policy on both accounts, especially for the working class and the poor, who carry a heavier economic burden with higher prices for what they need to purchase.”

Media Statement: Number of people working hasn’t caught up to pre-pandemic levels

Media Statement: Number of people working hasn’t caught up to pre-pandemic levels

Erik R - statement - July job numbers

Media Statement: Number of people working hasn’t caught up to pre-pandemic levels

On Friday, the U.S. Bureau of Labor Statistics announced that total non-farm payroll employment rose by 528,000 in July. The result was much higher than expected.

The Georgia Center for Opportunity’s (GCO) take: “Friday’s jobs report is being billed as great news, but peeling back a few layers reveals a worse reality,” said Erik Randolph, GCO’s director of research. “It’s true the number of jobs in the United States is now at pre-pandemic levels. The difference is that the number of people who are actually working hasn’t caught back up. That implies more people are working two or even three jobs to make ends meet in this highly inflationary environment. Meanwhile, wage growth isn’t keeping pace with inflation, putting poor and working class Americans even further behind.”

Media Statement: Assessing the GDP numbers and what it means

Media Statement: Assessing the GDP numbers and what it means

In The News

Media Statement: Assessing the GDP numbers and what it means

Today, the U.S. Bureau of Economic Analysis announced that in the second quarter of 2022, real Gross Domestic Product (GDP) declined by 0.9%. That marks two consecutive quarters of negative growth, a barometer of economic health that economists typically use to define a recession.

The Georgia Center for Opportunity’s (GCO) take:
“It’s now official. We’re having stagflation.

There has never been a time when the Business Cycle Dating Committee did not declare a recession when real GDP declined for two consecutive quarters since the availability of quarterly GDP data,” said Erik Randolph, GCO’s director of research. “In fact, the opposite is true. There have been two times, since the availability of the data, without two consecutive real GDP declines when the Committee declared them to be recessions. This happened with their declared 1960 and 2001 recessions. Who knows if and when the NBER Committee will declare whether we’re already in a recession, and for how long. But if it doesn’t declare so despite the real GDP data, it would be unprecedented and require a good explanation. In the meantime, GDP gives perhaps the broadest measure of economic activity, giving a strong signal that we’re in a recession until such time economists work out their various methodologies to affirm or deny.”

New Research Predicts Long-Term Pain for Labor Market

New Research Predicts Long-Term Pain for Labor Market

New Research Predicts Long-Term Pain for Labor Market

social distancing

Long-term pain for labor market due to the COVID-19 pandemic

New research predicts long-term pain for the labor market due to around 3 million workers who plan to remain permanently sidelined over concerns of physical illness or physical impairment due to the COVID-19 pandemic.

The Georgia Center for Opportunity’s (GCO) take: “The authors of the long social distancing study have produced very helpful data on those no coming back into the labor force, estimating a 3.5 million shortfall in March by comparing the current observed level with a linear trend using the time period of January 2015 to December 2019 as the basis for the forecast,” said Erik Randolph, GCO’s director of research. “Using the current employment statistics survey instead of the current population survey, our own research shows a shortage of 6.6 million employed persons that would include persons holding multiple jobs. We use the same method of comparison by subtracting the forecasted data from the observed data, but instead of using a linear trend as the basis for comparison that can often overestimate the forecasts, or the reverse, we use an ARIMA forecast model, not for five years but starting at the low point after the Great Recession. In addition, our research provides forecasts and analyses for each of the 50 states where there is a wide disparity when it comes to job recovery.”

For more, read Randolph’s research report on the economic impact of the pandemic shutdowns.

 

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Georgia Unemployment Rate: Lowest Record Since 1976

Georgia Unemployment Rate: Lowest Record Since 1976

Georgia Unemployment Rate: Lowest Record Since 1976

employment rate

State unemployment rate stands at a record low

On Friday, April 15th, the U.S. Bureau of Labor Statistics released state employment numbers for Georgia. They show that our state unemployment rate stands at a record low of 3.1%, the lowest since the BLS began tracking in 1976.

The Georgia Center for Opportunity’s (GCO) take: “At 3.1%, Georgia is tied with Arkansas for the 16th lowest unemployment rate, a half point below the national unemployment rate of 3.6%,” said Erik Randolph, GCO’s director of research. “Georgia is among the 16 states that have recovered all the private employment lost due to the pandemic. According to our analysis, Georgia ranks 10th in the nation when comparing private employment to each state’s pre-pandemic private employment growth trajectory.”

“Labor force participation is still an area of weakness. Georgia’s rate ranks 26th in the nation. While Georgia’s labor force participation rate edged up from 61.9% in February to 62.1% in March, it is still below its pre-pandemic rate of 62.8%. It is also well below the states with the highest rates. Nebraska leads the nation with 69.8% participation, just 0.2 points below its pre-pandemic rate”

“The national economic picture is worrisome and can put a damper on the improving job picture. Rising inflation and supply-side problems are creating uncertainty that will impact entrepreneurial decision-making and alter the economic outlook. Some economic indicators are beginning to point to a possible economic slowdown. Although these prognostications are not certain, they are concerning.”

For more, read Randolph’s research report on the economic impact of the pandemic shutdowns.

 

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