• Work-Sharing: An Effective Tool against Chronic Unemployment

    Testimony of Dean Baker before the Congressional Black Caucus at the hearing entitled “Out of Work But Not Out of Hope: Addressing the Crisis of the Chronically Unemployed,” 17 March 2010 As is typically the case in economic downturns, the most economically vulnerable experience the greatest pain.  The overall unemployment rate has risen from 4.5 […]

  • The Only Sector Showing Robust Job Growth: “Employment Services”

    The unemployment rate remained at 9.7 percent in February in spite of snowstorms that kept millions of people out of work during the reference week.  The establishment survey showed the economy losing 36,000 jobs with all of the job loss explained by a drop in construction employment of 64,000.  With more normal conditions, it is […]

  • Housing Market: Tax Credit and Price Trends

    The seasonally adjusted Case-Shiller 20-city index again showed a modest 0.3 percent rise in December.  This index has risen at a 3.2 percent annual rate over the last quarter, although it is down by 3.1 percent over the last year.  There appears to be a growing divergence in price trends in recent data with the […]

  • Surge in Women’s Employment Brings Unemployment Rate Down to 9.7 Percent

    The unemployment rate fell to 9.7 percent in January, driven by a 0.4 percentage-point drop in the unemployment rate for women to 8.4 percent.  The unemployment rate for men fell 0.2 percentage points to 10.8 percent.  This drop came in spite of a reported loss of 20,000 jobs in the establishment survey. The improved employment […]

  • Building Permits Surge in December

    Sales may begin to increase soon if the Federal Reserve extends its program to buy mortgage-backed securities. Building permits increased by 10.9 percent in December, driven largely by a 33.7 percent increase in permits for multi-family units.  However, permits for single-family units also rose by 8.3 percent.  Permits for multi-family units are still down by […]

  • Economy Loses 85,000 Jobs in December, Ends Decade with Job Loss

    The economy lost another 85,000 jobs in December, driven by continued job losses in construction and manufacturing.  While the current data still show a 378,000 job gain for the decade, these numbers will be lowered by approximately 824,000 when the benchmark revision is incorporated into the data with the release of the January employment report. […]

  • Pending Home Sales Plunge in November, Exactly as Predicted

    The National Association of Realtors reported that pending home sales fell 16.0 percent in November, hitting their lowest level since June.  Remarkably, this decline appeared to surprise many analysts.  It should have been entirely predictable. In the prior three months, there had been a sharp surge in home sales.  This surge was obviously driven by […]

  • FHA Troubles Are Likely to Curtail Demand

    Most modification plans leave homeowners without equity and paying excessive housing costs. The Federal Housing Authority has been taking steps over the last month to tighten its standards on the loans it guarantees, most notably by dropping several initiators who have had especially bad track records.  While this is a necessary and appropriate step given […]

  • Unemployment Edges Downward, as Employment Loss Slows

    The unemployment rate fell back to 10.0 percent in November as the pace of job loss slowed to 11,000 for the month.  Job loss for the prior two months was also revised downward by 159,000, bringing the average rate of job loss over the last three months to 87,000. The improved jobs picture in the […]

  • The Failures of TARP

    Testimony at the Hearing Entitled “Taking Stock: Independent Views on TARP’s Effectiveness,” before the Congressional Oversight Panel for the Troubled Asset Relief Program, 19 November 2009 Thank you, Chairwoman Warren for inviting me to share my views on the success of the Troubled Asset Relief Program (TARP) to date and its impact on the broader […]

  • Housing Market Trails Off with Expiration of First Homebuyer Tax Credit

    The 60-day delinquency rate in the 3rd quarter was 58 percent above the year-ago level. There appeared to be a sharp falloff in the housing market in October, as the November 30th expiration date for the first-time homebuyers tax credit approached.  As expected, this credit pulled home purchases forward, leading to a substantial increase in […]

  • Defense Share of GDP at Its Highest Level since 1993

    GDP grew at a 3.5 percent annual rate in the 3rd quarter, driven by a 22.4 percent jump in car sales, the result of the Cash for Clunkers (C4C) program.  This increase in car sales accounted for 42.0 percent of the growth in the quarter.  Consumption as a whole, which grew at a 3.4 percent […]

  • Government Price Supports Create Mini-Bubble

    The August Case-Shiller 20-City index showed a 1.0 percent rise in house prices for the month.  The index has now risen at a 12.7 percent annual rate over the last three months.  Prices rose in 16 of the 20 cities in the index, with only Charlotte, Cleveland, Las Vegas, and Seattle registering price declines for […]

  • Job Loss Accelerates, Driven by Local and State Public-Sector Cutbacks

    The loss of 263,000 payroll jobs, coupled with a 0.1 hour decline in the average workweek, pushed the index of aggregate hours to 98.5, slightly below the 98.6 level in December of 1998.  Hours worked have now declined by 8.6 percent from the pre-recession peak.  In the 1981-82 recession the decline from peak to trough […]

  • Higher Energy Prices Push CPI Up 0.4 Percent in August

    The overall CPI rose by 0.4 percent in August, driven by a 4.6 percent jump in energy prices.  The core CPI increased by just 0.1 percent for the second consecutive month.  The overall CPI has risen at a 4.9 percent annual rate for the last quarter, compared to a drop of 1.5 percent over the […]

  • Unemployment Jumps to 9.7 Percent, as Economy Loses Another 216,000 Jobs

    The unemployment rate hit 9.7 percent in August, up from 9.4 percent in July. According to the establishment survey, the economy shed 216,000 jobs in August. In addition, the job loss numbers for June and July were revised up by 49,000. This puts the average rate of job loss over the last three months at […]

  • Housing Glut Pushes Rental Inflation to Record Lows

    The overall CPI was unchanged in July while the core index rose by 0.1 percent.  Over the last three months the overall index has increased at a 3.4 percent annual rate, driven by sharply higher energy prices in June.  It is down by 2.1 percent over the last year.  The core index has increased at […]

  • Pace of Job Loss Slows Sharply, As Unemployment Edges Down

    The economy lost 247,000 jobs in July, bringing the rate of job loss over the last three months to 331,000.  This is down sharply from the 700,000 monthly rate of decline in the months from November to February.  The unemployment rate actually slid slightly to 9.4 percent, although this was entirely attributable to people dropping […]

  • June Price Data Sends Mixed Signals on Inflation

    The jump in prices, combined with flat nominal wages, means real wages are falling. The overall CPI rose by 0.7 percent in June, driven by a 7.4 percent jump in energy prices.  It has now risen at a 3.3 percent annual rate over the last quarter, compared with a decline of 1.4 percent over the […]

  • Homeownership: The Fast Path to Poverty

    Price declines have been sharpest at the bottom end of the market. The collapse of the housing bubble has put downward pressure on house prices in all segments of the housing market, but the more moderate end has been by far the hardest hit.  In former bubble markets, houses in the bottom third of the […]