Open Thread Wed. & Ben

Posted on July 11, 2013 by lmsinca

I figure a change in subject is appropriate.  I think Brent is in and out again this week so I’ll put up my big economic news of the week.

Federal Reserve Chairman Ben Bernanke said Wednesday that the Fed’s easy-money policy is still necessary, throwing cold water on fresh market expectations that the Fed’s stimulus would soon be ended.

Bernanke told an audience of economists in Cambridge, Massachusetts, that the jobs market remains too weak and inflation remains too low for comfort.

He also warned that the full impact of steep government spending cuts initiated in March was yet to be seen.

Together, the evidence underscored the need for the Fed to keep in place its highly accommodative monetary policy, he said.

“Both the employment side and the inflation side are saying that we need to be more accommodating,” he said, answering questions after a speech.

“Moreover, the other portion of macroeconomic policy, fiscal policy, is now actually quite restrictive…. Put that all together, I think you can only conclude that highly accommodative monetary policy for the foreseeable future is what’s needed in the US economy.”

His comments came just hours after the release of the minutes from the June 18-19 meeting of the Fed’s policy board, the Federal Open Market Committee, which suggested the central bank would move more rapidly toward winding up its $85 billion a month stimulus program.

 

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10 Responses

  1. lmsinca, on July 11, 2013 at 8:17 am said:

    (Reuters) – The number of Americans filing new claims for unemployment benefits rose last week, a potentially worrisome sign for the economy although the level still pointed to ongoing healing in the labor market.

    Other data on Thursday showed prices for U.S. imports and exports fell in June for the fourth straight month, hit by cooler economic growth worldwide.

    Initial claims for state unemployment benefits increased by 16,000 to a seasonally adjusted 360,000, the Labor Department said.

    “It’s a little bit worrisome,” said Russell Price, senior economist at Ameriprise Financial Services Inc in Troy, Michigan.

    Still, the reading was likely clouded by seasonal factors.

    The Labor Department can have a tough time seasonally adjusting claims in early July because many factories shut down during that period for retooling, but the scheduling for the shutdowns varies from year to year. A Labor Department analyst said there was nothing otherwise unusual in the claims data.

    Even with the increase, the number of layoffs remains in the range of levels seen over the last year, and is consistent with a continued drop in the unemployment rate.

    “The labor market has been doing pretty well,” said Joshua Dennerlein, economist at Bank of America Merrill Lynch in New York.

    http://www.reuters.com/article/2013/07/11/us-usa-economy-idUSBRE96A0G320130711

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    • markinaustin, on July 12, 2013 at 4:43 am said:

      I wrote a long reply to both NoVA’s link and Lulu’s post but did so on the face page rather than the “Comment” page and it was eaten. That has happened to me before. Lulu, is that the problem you had last week?

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      • novahockey, on July 12, 2013 at 7:10 am said:

        I haven’t had that issue mark.

        Somewhat related. a Slate “you get what you pay for” article comparing the experience of two friends who are pregnant at the same time. One in the USA and one in Canada. Of that things that jumped out is that the Canadian is a doctor and knew how to work the system.

        To her, the American attitude toward medical care comes as a dose of welcome reality. “The message in the Canadian system is that we’re all alike, and there’s something nice about that when you’re not sick,” she says, “but if you actually have medical problems, and you’re in a system that’s designed to treat the most people and save money, and not to do absolutely everything that’s possible, then that’s when it becomes an issue. If I were dying of cancer, I’d rather live here.”

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        • ScottC, on July 12, 2013 at 8:27 am said:

          nova:

          Of that things that jumped out is that the Canadian is a doctor and knew how to work the system.

          Yup, that jumped out to me, too. As ever, systems that eschew monetary incentives in favor of an assumed egalitarianism inevitably replace monetary influence with political and professional influence.

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  3. lmsinca, on July 12, 2013 at 7:18 am said:

    Mark, that happened to me last week but last weekend and early this week I couldn’t actually comment at all and most of the comments disappeared temporarily. The entire right sidebar was gone, just a blank. It would come and go. I had my tech guy out and he messed with our network and it seems fixed now but I’m not actually sure he did anything………..lol

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    • ScottC, on July 12, 2013 at 7:54 am said:

      lms:

      it seems fixed now but I’m not actually sure he did anything.

      Probably just restarted the machine. That seems to be the standard “solution” employed by my tech guys at the office any time something goes wrong. I’ve stopped calling them and learned to hit the re-boot button myself. Took years of training.

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  4. Michigoose, on July 12, 2013 at 8:23 am said:

    Scott’s right: when in doubt, reboot.

    Kind of scary, if you think about it. 🙂

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  5. jnc4p, on July 12, 2013 at 8:32 am said:

    See rent controls as the best example of this.

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  6. novahockey, on July 12, 2013 at 9:21 am said:

    “with political and professional influence.”

    [rethinks stance on single payer]

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