Monday, November 17, 2014

Tuesday: Homebuilder survey, PPI

by Bill McBride on 11/17/2014 07:10:00 PM

Some excellent research from the NY Fed Liberty Street Economics: Measuring Labor Market Slack: Are the Long-Term Unemployed Different?. The conclusion:

[W]e find that long-term unemployed workers are not less attached to the labor market than short-term unemployed workers. If anything, the long-term unemployed group has the largest share of prime-age workers, the age group likely to have the strongest labor force attachment. We also see that long-term unemployment is an economy-wide phenomenon, spread across industries and occupations. While there may be unobservable characteristics of long-term unemployed workers that make them less attached to the labor force, when looking at their observable characteristics, it’s hard to argue that they should not be considered as part of labor market slack.
The "underutilization of labor resources" may be "gradually diminishing" (from the recent FOMC statement), but based on this research, the unemployment rate, and the number of people working part time for economic reasons, it appears there is still a fair amount of slack in the labor market.

Tuesday:
• At 8:30 AM ET, the Producer Price Index for October from the BLS. The consensus is for a 0.1% decrease in prices, and a 0.1% increase in core PPI.

• At 10:00 AM, the November NAHB homebuilder survey. The consensus is for a reading of 55, up from 54 in October. Any number above 50 indicates that more builders view sales conditions as good than poor.