So, it was just Labor Day weekend, and while we shouldn’t all be working, I spent part of the long holiday weekend thinking about some of my favorite Fred Charts.
Include instead all Among my favorites, I set myself a challenge: narrow the list down to the three most telling charts:
U3 is the unemployment rate: When has unemployment decreased compared to today? Pre-pandemic January 2020 3.5%, October 1968 to May 1969 3.4% and 1952-53, when the unemployment rate was below 3% and June 1953 was 2.5%.
Job Opportunities: Total Nonfarm: Consider how many jobs remain unfinished today and you have many other problems in this economy: supply chain problems, product shortages leading to inflation, etc. The good news is that the post-pandemic spike appears unwarranted and (hopefully) temporary. It’s easy to fix but not easy: more immigration, COLA minimum wage, etc.
Wages (relative to inflation): Wages have generally not kept pace with inflation over the past 50 years. (This is especially true for the bottom half of earners). What the chart below shows is that where inflation is above wages, workers are paid less than they cost. Making matters worse, most of the time where inflation is below hourly wages, it’s a recession with a sharp rise in unemployment.
If you want to look at wages alone, look at the FRED chart.
I’d be hard-pressed to find three more charts that are not only educational about the labor market, but also informative about the current economy as a whole.