One of the most consequential and thoughtful economic policymakers of last 30+ years--Gene Sperling--is now on Substack, I subscribed. substack.com/home/post/p-...

Double Dignity Jobs and Full Employment in the AI Era

We have the power to offset AI-driven job loss and promote a full employment economy centered on dignity and contribution by elevating and dramatically expanding dignified jobs.

substack.com

Jobs day: 57K jobs added in June (111K average for last three months), less than expected but probably more than breakeven. Unemployment rate fell to 4.2%, has been stable for 2 years now, but participation and employment rates fell. Wage growth picked up.

PCE-based ecumenical underlying inflation measure was 3.5% in May. As most metrics are highly elevated.

PCE inflation came in high. And the details were even more worrying than the headline as the risk of inflation mounting outside the tariff/Iran affected sectors. Core PCE annual rate: 1 month: 3.9% 3 months: 3.5% 6 months: 4.1% 12 months: 3.4%

Three things about today's inflation report: 1. 12-month inflation increased (because May-26 > May-25) 2. 1-month inflation slowed (because May-26 < Apr-26) 3. Inflation came in below expectations. Here is core.

Another strong month for job growth. 172K in May with upward revisions for previous months that brings the three month average to 188K. Unemployment rate stable at 4.3% while broader measures (U-6 and employment rate) both improved.

The macro data giveth and the macro data taketh. Productivity for Q1 revised down. Still a respectable pace over the last five quarters (2.1% annual rate--five quarters because shifting means Q1 & Q2 last year were two sides of the same coin).

The labor market has been steadily tightening, albeit just a notch--and maybe in absolute terms it is still loose. Unemployment rate stable/edging down while job openings stable/edging up. Ratio of V/U has risen from a low of 0.87 in December to 1.03 in April.

What I've been reading this weekend--and is off to an (unsurprisingly) excellent start. By @chadpbown.com & @soumayakeynes.ft.com . Will post a review when I'm done.

Chair Warsh's preferred (?) inflation signal measure picking up a little but remains muted compared to other measures. Trimmed mean PCE which throws out extremes was a 2.5% annual rate in April and 2.3% over the last year.

Some personal observations about education this past year--which are broadly applicable to everything AI this past year. www.thecrimson.com/article/2026...

My thoughts for the Class of 2026. And all I can think about for them--and future classes--is AI and how this was the last class that had any of their college experience without substantially capable and widely accessible AI. www.thecrimson.com/article/2026...

Revised GDP for Q2 suggests the first half of the year was even weaker than we thought. Growth was 1.4% at an annual rate but this overstates it because end of (most) of the shutdown led to payback from Q1. For the two quarters was 1.1% annual rate.

Core PCE inflation in April was below expectations while still very high. Annual rates: 1 month: 2.9% 3 months: 3.8% 6 months: 3.8% 12 months: 3.3%

I've been reading Zola's Les Rougon-Macquart novels on and off, each is about a specific topic in Second Empire France and all have some striking contemporary parallels or relevant insights. Most recent was Money (or L'Argent) which is about private credit. www.goodreads.com/review/show/...

Good luck to Kevin Warsh! It's a tricky macroeconomic situation right now and I have every hope that he can help lead the Fed in navigating it.

"The faculty" & "the faculty who attend faculty meetings" can be very different. Harvard's grade cap passed 70-30 in an electronic vote that was open for a week. If the vote had been in the in person faculty meeting my (admittedly wild) guess is it would have lost 60-40.

I would never, ever have written this headline but I'm secretly thrilled the editor did. Harvard just capped A grades. David Laibson & I make the case that: 1. We need to use it to improve our education 2. Other universities should follow 3. Employers & grad admissions should take not.

New @nytopinion.nytimes.com lede: "I first met Jerome Powell, the departing head of the Federal Reserve, in late 2011. I was working for Barack Obama, and Mr. Powell was interviewing for a job as one of the Fed’s governors. He was not our first choice." The rest: www.nytimes.com/2026/05/14/o...

Opinion | He Was Good at Steering the Fed, but He Was a Genius at Ignoring Trump’s Threats

nytimes.com

I got this security question on an Adobe docusign. I was born in 1970 so I selected 1981. It marked my answer as wrong. Was I supposed to answer "None of the above"?

New NYT: CPI was super hot. But core was relatively tame. Two huge one-time factors raising inflation: tariffs & Iran. Fed can't solve them because they're not about excessive demand. Only Trump or time can solve. Now the usual wonky thread I didn't have time for before.

Inflation was very high in February (pre-Iran data). Core PCE annual rate: 12 months: 3.0% 6 months: 3.4% 3 months: 4.4% 1 month: 4.5% FWIW, much of the increase was highly concentrated and idiosyncratic.

Glad to have joined with a great group in stating the obvious: the U.S. is not facing fundamental international payment problems & tariffs are not required to deal with a “large and serious US balance-of-payments deficit.” So the administration's use of 122 for 10% tariffs wasn't justified.

Stan Veuger@stanveuger.bsky.social · 4mo ago

I had the privilege of organizing economist amicus briefs in support of the parties challenging the administration’s most recent round of worldwide tariffs. The cases are Burlap and Barrel, Inc. v. Trump. and Oregon et al. v. Trump, both before the U.S. Court of International Trade.

Huge congratulations to @ludwigstraub.bsky.social for winning the Clark Medal. He is not only brilliant and original, he is also at a commensurate level in kindness and humility.

The EV tax credit that was terminated by the One Big Beautiful Bill Act was $7,500. The gas price increase--if sustained--is about $500 (per car per year).

Can someone please do this for Boston? tbhochman.github.io/dc-waymo-das...

The job market continues to be reasonably good (for an aging workforce with low net immigration). 178K jobs in March, much a bounceback from strikes and weather that resulted in -133K (revised) in February. The three month average is 68K. Urate ticked down to 4.3%.

If you have access to the NY Times, this is an interesting article on manufacturing jobs. @jasonfurman.bsky.social www.nytimes.com/2026/04/02/o...

Opinion | Every President Tries It. It Never Works.

nytimes.com

Ed Glaeser, Amy Tomasso and I discuss housing with Samantha Laine Perfas in a great podcast discussion. harvard-thinking.simplecast.com/episodes/hou...

Priced out of the American dream | Harvard Thinking

Owning a home feels increasingly unattainable for many middle-class Americans. Last year, home prices surged to nearly five times the median income. Yet the pace of building new housing, which could…

harvard-thinking.simplecast.com

Four theses on tariff impacts: 1. Evidence clearly shows they've added 0.5-1.0pp to inflation. Evidence consistent with them subtracting from growth. And no evidence they've done anything good for manufacturing or trade deficits (but they have raised revenue).