The writer is founder and president of MacroPolicy Perspectives and clinical associate professor of finance at University of Texas at Austin
In cutting interest rates last week, the Federal Reserve pointed to “downside risks to employment”. The Fed is right to worry.
Policy disruption is leaving its fingerprints all over the US labour market, and it doesn’t bode well for the outlook. Even as the artificial intelligence boom has spurred a surge in investment and boosted a handful of equity valuations, hiring has ground nearly to a halt. At the heart of every economic growth cycle is a virtuous interplay between jobs and consumer spending. The latter comprises more two-thirds of the US economy and if you lose the engine of job gains, the economy won’t grow.