Brett House
2.4K posts
@BrettEHouse
Economist. @Columbia_Biz @ppforumca @PubPolicy_Munk @MasseyCollege (he/him)
JUST IN: NASA announces $20 billion plan to build permanent moon base
Seems like an appropriate moment to remind everyone that Pearson is undertaking a multi-billion dollar capital investment program that includes new terminal space to accommodate an additional 15 million passengers annually. torontopearson.com/en/pearson-lif…
Rideau Cottage 'inadequate' home for a PM as decision on 24 Sussex looms: internal memo. Carney government could choose fate of official residence within months, source says, @AshleyBurkeCBC reports cbc.ca/news/politics/… Find out more at nationalnewswatch.com
US companies denied refunds on Trump’s illegal tariffs via @FT attn: @scottlincicome giftarticle.ft.com/giftarticle/ac…
This is not good.
JUST IN: A dismal February jobs report. The U.S. economy LOST 92,000 jobs in February and the unemployment rate ticked back up to 4.4%. Even healthcare shed 28,000 jobs in February. December was also revised down to -17,000. January was revised to 126k. Unemployment rate: 4.4% —> highest since December (and one of the higher rates in past few years) Wage growth: 3.8% (well above 2.4% inflation)
Why does Fed target PCE instead of CPI? My pet explanation. Monetary policy controls the growth of nominal (money) demand. Inflation is the difference between money demand and the volume of goods and services, i.e. nominal PCE divided by real PCE. This inflation must measure all the goods and services consumed by households even if they didn't pay for them. Suppose the cost of health care goes up 10%, but the government pays providers a subsidy to absorb half that. The CPI, a cost of living index, would correctly record a 5% increase in what consumers pay for health care. But this would understate true inflation, and the Fed would be misled by following CPI instead of PCE. PCE's odd imputations , for non profit services, financial services, etc. are designed to capture everything consumers consume regardless of the price they pay or whether there's even a price. It's not perfect (uses same awkward measure of shelter as CPI) and throws some head fakes. It is less comprehensive than the GDP deflator. Contra @biancoresearch this is why the Fed targets PCE instead of CPI, not because it's lower. At least it ought to be why. The Fed usually advances a different reason (usually about PCE chain weighting being better than CPI fixed weights). But I like mine more.
Hundreds of layoffs in Thunder Bay could have been avoided if the Ontario Line contract had been kept in the province instead of being "sent to the States," NDP Thunder Bay—Superior North MPP Lise Vaugeois said. #onpoli thetrillium.ca/news/municipal…
