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This is an interesting opening, coming from the Wall Street Journal: "Millions of young males have left the workforce and civic life. Full employment? The U.S.

This is an interesting opening, coming from the Wall Street Journal: "Millions of young males have left the workforce and civic life. Full employment? The U.S. isn’t even close." If the USA is not close to full employment, then the USA does not have to work about inflation. And yet, in other commentary, the Wall Street Journal has been obsessed with the risk of inflation, for many years now. They have urged the Fed to raise rates to head off a surge in inflation. But if there is hidden unemployment, then rates can remain low longer, with little risk of inflation.

hx87 10y ago
Inflation can still happen in sectors that have both investment-like and consumption-like qualities, such as real estate, when massive amounts of investment capital try to look for safe and/or high-yielding havens.
- bsbechtel 10y ago
  Or the stock market, which keeps hitting all time highs despite anemic economic growth.
douche 10y ago
I would think, when the labor force participation rate is 62%, and there are 94 million out of the work force, it's pretty obvious that there is a lot of unemployment. Granted, included in that number are the elderly and retired, but that's still a lot of people. The thing with inflation, is that its not broad-based, 1930s-fill-a-wheelbarrow-with-Deutschmarks-for-a-loaf-of-bread inflation, it's inflation in some sectors and deflation in others. Housing, education and health care are going through the roof, but groceries and consumer goods are staying about the same or getting cheaper, and gasoline and heating costs are the lowest they've been in a decade or more.
pjc50 10y ago
Indeed - as Krugman keeps going on about, there's little risk of "classical" inflation. What there is is a lot of complaining from the rentier class (and some of the better off pensioners) that they can't make 4% for doing nothing any more.

hx87 10y ago

Inflation can still happen in sectors that have both investment-like and consumption-like qualities, such as real estate, when massive amounts of investment capital try to look for safe and/or high-yielding havens.

bsbechtel 10y ago
Or the stock market, which keeps hitting all time highs despite anemic economic growth.

douche 10y ago

I would think, when the labor force participation rate is 62%, and there are 94 million out of the work force, it's pretty obvious that there is a lot of unemployment. Granted, included in that number are the elderly and retired, but that's still a lot of people. The thing with inflation, is that its not broad-based, 1930s-fill-a-wheelbarrow-with-Deutschmarks-for-a-loaf-of-bread inflation, it's inflation in some sectors and deflation in others. Housing, education and health care are going through the roof, but groceries and consumer goods are staying about the same or getting cheaper, and gasoline and heating costs are the lowest they've been in a decade or more.

pjc50 10y ago

Indeed - as Krugman keeps going on about, there's little risk of "classical" inflation. What there is is a lot of complaining from the rentier class (and some of the better off pensioners) that they can't make 4% for doing nothing any more.