The latest economic numbers are out, showing the economy gained 203,000 jobs last month, and revising previous estimates somewhat. Unemployment was down to 7.0 percent. Kevin Drum updates his usual chart here showing the new number in context since the recovery. Atrios puts the number in even better perspective, pointing out that the monthly average during the entire Clinton administration was 237,000 jobs. Back then, needless to say, we weren’t digging out from a catastrophic recession.
Attention now turns to the Federal Reserve, which has been itching and sweating to start dialing back its unconventional stimulus program. Matt Yglesias makes an important point that central bank policy seems stuck in a pre-2008 mindset:
The idea of a central bank whose main job is to take the punch bowl away before the party gets too fun belongs to a time of moderate macroeconomic fluctuations. If it’s been a long time since you’ve had a prolonged or serious recession, then it makes a ton of sense to become very vigilant about inflation—even “incipient” or largely hypothetical inflation. But when you had a year of recession (2008) followed by a year of extreme recession (2009) followed by a year of slow growth in which unemployment remained high (2010) followed by another year of slow growth in which unemployment remained high (2011) followed by another year of slow growth in which unemployment remained high (2012) followed by a fourth year of slow growth in which unemployment remained high (2013) it would be very unbalanced to act hyper-vigilant about inflation. It’s been a long time since the bulk of workers have had any meaningful bargaining power, and the wise thing to say would be that, yes, we would in fact actually like to see a party get started here.