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Karen Conner



Articles by Karen Conner

Consumer Price Index: Jump in Gas Prices Pushes Overall CPI up 0.3 Percent in January

20 days ago

(This is a compilation of Dean Baker’s quick-take analysis over Twitter. Follow @DeanBaker13 on Twitter to get his quick-take analysis of government data immediately upon release.)
The overall inflation picture looks good. Inflation in the problem areas (rent, medical care, and education) continues to be under control. We will see a bounce back in hard hit sectors like airfares and hotels. 

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PREVIEW: What to Look for in the January Consumer Price Index

21 days ago

(The monthly Consumer Price Index (CPI) is scheduled for release by the Bureau of Labor Statistics on Wednesday, February 10th at 8:30 AM Eastern Time.)
There has been a sharp slowing of inflation in the main problem sectors of education, medical costs, and rent. In the last four decades, education and medical cost inflation has hugely outpaced the overall CPI. In addition, inflation in rent had been running more than a full percentage point higher than the overall CPI since 2014.
Inflation in Education
In recent months, these sectors have actually been seeing unusually low inflation. The education index has been flat for the last six months. This undoubtedly reflects many schools giving tuition breaks due to online classes substituting for in-person instruction. While many schools remain

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Unemployment Falls to 6.3 Percent, but Job Growth Weak

25 days ago

Trump is the first president to leave office with a loss of jobs since Herbert Hoover.
The unemployment rate fell by 0.4 percentage points in January to 6.3 percent. Much of this decline was due to people leaving the labor market as the employment-to-population ratio (EPOP) only rose by 0.1 percentage point. The EPOP now stands at 57.5 percent, 3.6 percentage points below its year-ago level.
The establishment survey showed an increase of just 49,000 jobs, with the private sector only accounting for 6,000 of these jobs. There were sharp downward revisions to job growth for both November and December, so the level of private sector jobs reported for January was 198,000 below the November level.
The January employment level left the economy with 2,981,000 fewer jobs than when President Trump

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PREVIEW: What to Look for in the January Jobs Report

28 days ago

(The monthly Employment Situation is scheduled for release by the Bureau of Labor Statistics on Friday, February 5th at 8:30 AM Eastern Time.)
The continued surge in coronavirus cases will again be the main story in the January employment report. We will likely again see a fall in overall employment driven by job loss in restaurants and other areas heavily affected by the pandemic. The relief package passed in December may have been a small positive, but for the most part, checks did not arrive in time to affect the employment situation much in the month.
Trump’s Last Jobs Report Will Probably Show His Presidency Was a Job Loser
This is the last jobs report of the Trump presidency. The reference period was the week that includes January 12. The economy generally adds jobs, except in

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CEPR News: The Fierce Urgency of Now

January 29, 2021

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Four Percent Fourth Quarter Growth Leaves GDP 2.5 Percent Below Year-Ago Level

January 28, 2021

Consumption spending has been contracting over the course of the fourth quarter
The economy grew at a 4.0 percent annual rate in the fourth quarter, driven largely by strong growth in housing and investment in equipment. This growth, following the extraordinary 33.4 percent post-shutdown growth in the third quarter, still leaves the GDP 2.5 percent below its year-ago level.
The growth reported for consumption is entirely due to strong third-quarter growth.
There is an important timing issue here that can be missed by just looking at the quarterly growth number. The growth rate is based on the average level of GDP in the fourth quarter compared with the average for the third quarter. GDP, and especially consumption, was growing rapidly throughout the quarter. If consumption had just

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PREVIEW: What to Look for in the Fourth Quarter 2020 GDP Report

January 26, 2021

We will see a strong but more normal rate of growth in the fourth quarter, however that is a misleading picture of the overall state of the economy. 
After falling at a 31.4 percent annual rate in the second quarter shutdown, and then rising at a 33.4 percent rate in the third quarter, we will see a strong but more normal rate of growth in the fourth quarter, however that is a misleading picture of the overall state of the economy. With growth likely coming in a bit over 5 percent for the quarter, the economy is still going to be around 2.0 percent smaller than in the fourth quarter of 2019.
There are two main points worth taking away from the fourth quarter data.
First, there are sharp differences across sectors. The other point, which I will come back to, is that there is a major issue

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Union Membership Byte 2021

January 22, 2021

The union membership rate rose by 0.5 percentage point to 10.8 percent in 2020, the Bureau of Labor Statistics reports today.
Figure 1

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CEPR News: Guide to Federal Budget Activism for Advocates, Decision-Makers, Public

January 21, 2021

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Family Benefits in US Fall Further Behind

January 14, 2021

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The New York Times recently noted that South Korea would be

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A Big Jump In Gas Prices Pushes Overall CPI Up 0.4 Percent In December

January 13, 2021

(This is a compilation of Dean Baker’s quick-take analysis over Twitter. Follow @DeanBaker13 on Twitter to get his quick-take analysis of government data immediately upon release.)
The pandemic has led to a real flip in price trends. Rent, medical care, and education had been sectors with higher inflation. This is no longer the case; now food and cars see the highest inflation. This will likely flip back when the pandemic fades, although slower rental inflation could last.

A big jump in gas prices pushes overall CPI up 0.4 percent in December; core CPI is up just 0.1 percent. Year-over-year, the overall CPI is up 1.4 percent, and the core is up 1.6 percent.
Store-bought food and restaurant prices both rose 0.4 percent in December. Prices are up an identical 3.9 percent year-over-year.

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PREVIEW: What to Look for in the December Consumer Price Index

January 12, 2021

The resurgence of the pandemic had a major impact on the economy last month, as we saw in the December jobs report. This means that we are likely to see some of the pandemic-specific price effects that occurred in the spring, although they will not be as pronounced, since the December hit was nowhere near as large as the impact of the spring shutdowns.
Food
Most obviously, we are seeing more store-bought food and fewer restaurant meals. In the spring, this led to a sharp rise in the price of store-bought food, while restaurant prices fell. The usual pattern is that restaurant prices rise by around 1.0 percentage points more than the price of store-bought food. This shutdown effect was largely reversed when the economy began to reopen in the summer. As of November, the price of store-bought

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PREVIEW: What to Look for in the December Jobs Report

January 5, 2021

(The monthly Employment Situation is scheduled for release by the Bureau of Labor Statistics on Friday, January 8th at 8:30 AM Eastern Time.)
Soaring coronavirus infection rates are likely to be the main story in the employment report in December. Fear of the pandemic, coupled with new state and local restrictions, has led to a fall in restaurant reservations to levels not seen since early June. Presumably, other businesses requiring close personal contact have been similarly affected.
In addition, the looming end of the CARES Act programs, which were not extended until the end of the month, possibly led many people to cut back on spending. As a result, we are likely to see job loss in December for the first time since April, with declines in restaurant and retail employment leading the

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Surprise Medical Billing Legislation is Good News for Patients, CEPR Co-Director Says

January 1, 2021

Washington DC — In response to Surprise Medical Billing legislation inserted into the omnibus spending and COVID relief bill introduced December 21st (passing on December 22nd), CEPR Co-Director Eileen Appelbaum issued the following statement:

“We commend Congressional leaders for passing a spending and relief package that includes legislation to end surprise medical billing. That is very good news for patients.
“With this legislation, patients will not receive surprise medical bills from providers or air ambulance services (but ground ambulance services are not covered). Patients will only be required to pay the co-pays that they would be responsible for if cared for by an in-network doctor. 
“The legislation that just passed is weaker than the bill that was defeated last December — it

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Here’s What You Helped CEPR Accomplish in 2020. Where Do You Want To Go In 2021?

January 1, 2021

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Consumer Price Index: Rental Inflation Has Slowed Sharply Since the Pandemic

December 10, 2020

(This is a compilation of Dean Baker’s quick-take analysis over Twitter. Follow @DeanBaker13 on Twitter to get his quick-take analysis of government data immediately upon release.)

Overall and core CPI both rose 0.2 percent in November. Overall CPI is up 1.2 percent year-over-year. Core CPI is up 1.6 percent year-over-year. 
Store bought food prices fell by 0.3 percent, while restaurant food rose 0.1 percent. Year-over-year increases are 3.6 percent and 3.8 percent, respectively. (Store bought food prices rose rapidly in the shutdown period).
Prices of medical care services fell for the second consecutive month: down 0.1 percent, but up 3.2 percent year-over-year. Health care insurance prices went down 1.0 percent in November, and are down 3.7 percent in the last three months.
Hotel

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Economy Adds 245,000 Jobs in November, Unemployment Falls to 6.7 Percent

December 4, 2020

Contrary to normal patterns, the workweek has actually gotten longer in the pandemic recession. 
The rebound slowed sharply in November, with the economy adding just 245,000 jobs. This would ordinarily be a very respectable gain, but with the economy still down almost 10 million jobs from the pre-pandemic level, it is not a pace that gets us back to full employment any time soon. If we need 100,000 jobs a month to keep pace with the growth of the labor market, it would take us more than five and half years to get back to full employment at this rate of job growth.
The unemployment rate fell 0.2 percentage points to 6.7 percent in November, however this was entirely due to people leaving the labor force, as employment dropped slightly. The employment-to-population ratio (EPOP) fell by 0.1

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“A Silent Pandemic”: Racism, Negligence, and Medical Assault in ICE Detention Centers

November 17, 2020

After a whistleblower revealed that an ICE detention facility in Georgia sterilized immigrant women without consent, members of the House Judiciary Committee and Hispanic Caucus visited the facility and heard directly from the whistleblower and immigrant women who experienced forced sterilizations at the facility. 
 
Congress members called for an investigation of the Department of Homeland Security (DHS) in mid-September, then passed a resolution demanding DHS “pause the removal of any individual who experienced any medical procedure,” and “hold all individuals found to be involved . . . and bring them to justice.”
 
Now, Congress members, “horrified to see reports of mass hysterectomies performed on detained women” while in US custody, call for action by the United Nations Human Rights

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Economy Adds 638,000 Jobs in October, Unemployment Falls to 6.9 Percent

November 6, 2020

The number of multiple job holders stands at 17.8 percent below its year-ago level.
The labor market continued to rebound from the spring shutdown, adding 638,000 jobs. The unemployment rate fell another percentage point to 6.9 percent. This still leaves the number of jobs 6.6 percent below the February level.
The jobs gains were broadly based across sectors. Construction added 84,000 jobs, which is consistent with other data showing a boom in residential construction. Employment in construction is now down by just 3.8 percent from its pre-pandemic level. Manufacturing also had a strong month, adding 38,000 jobs, leaving employment in the sector 4.8 percent below the pre-pandemic level.
This is striking since these two sectors usually are the most hard-hit in a recession. By contrast, they

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PREVIEW: What the October Jobs Report Will Tell Us

November 4, 2020

There have been some anomalies in the data that are worth tracking.
With the period of rapid recovery from the shutdowns behind us, the labor market is likely looking at a long slog to get back to something resembling full employment. It clearly has lost considerable momentum now that the bulk of the CARES Act money has been spent. Furthermore, the economy will face serious headwinds, as the unchecked spread of the pandemic will lead to more measures curtailing business operations. It will also discourage people from visiting restaurants and using other services, even where there are no legal restrictions.
Job Growth Across Industries
The most immediate way to see how these effects are playing out is to see the mix of job growth across industries. Construction and manufacturing are likely

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Record 33.1 Percent Surge Still Leaves GDP 3.5 Percent Below Pre-Pandemic Level

October 29, 2020

The trade deficit reached a record in the third quarter.
GDP grew at a record 33.1 percent annual rate, as the economy bounced back from the pandemic-driven shutdowns in the second quarter. However, even with this record growth, the economy was still 3.5 percent below its pre-pandemic level. If we assume a modest 2.0 percent annual growth rate, the third quarter GDP would be more than 5.0 percent below the trend path from the pre-recession period.

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The Rise in Material Hardship Among Working-Class Whites and How It Could Impact the 2020 Election

October 27, 2020

Missed or late rent or mortgage payments with little confidence of being able to catch-up are hallmarks of what economists call “housing insecurity.” Black and Hispanic people are much more likely to be housing insecure than white people and have seen larger increases in housing insecurity during the pandemic. At the same time, there is considerable “hardship inequality” among white people. Hardship inequality is structured by education, income, and other factors. While housing insecurity has remained relatively stable among whites overall, it has spiked among lower-income whites (under $50,000) without college degrees. 
Lower-income whites without college degrees were the largest group of voters who voted for Obama in 2012 but switched to Trump in 2016. The rise in material hardship among

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PREVIEW: What to Look for in the Third Quarter GDP Report

October 27, 2020

While we are virtually certain to see record growth for GDP in the third quarter, without a new stimulus package a drop is likely in the fourth quarter.  
We are virtually certain to see a record growth figure for GDP in the third quarter, likely close to 35 percent at an annual rate. The sharp growth is a bounce back from a record plunge in the second quarter, which followed a sharp drop in the first quarter, when the shutdown measures first started to go into effect.
While this sort of bounce back following the shutdowns is encouraging, it still does not get the economy anywhere close to being back on track. The economy would have to grow at a 53.3 percent annual rate in the third quarter to make up the ground lost in the first and second quarters. If we assumed a modest 2.0 percent

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Trump’s Triple Failure: Virus Control, Stimulus, and the Trade Deficit

October 12, 2020

See article on original site
Given the precarious state of the economy, President Trump’s reckless decision to walk away from stimulus negotiations last week was a consequential act of political malpractice. He has since flipped and flopped on this by the hour, but his actions have been particularly rash given his administration’s failure to even try to control the virus. First they ignored the health outcomes. Now they’re playing erratic politics with the resulting economic pain.
But working Americans face yet another, less widely noticed Trump-induced economic problem: the historically large and worsening U.S. trade deficit and the drag it is creating on the economy. The failure to offset this drag with fiscal stimulus is already being felt in communities across the land.
Trump clearly

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Overall and Core CPI Both Rise 0.4 Percent in August Driven by Reversals from Earlier Price Declines

September 11, 2020

Rental inflation continues to slow in high-priced areas.
The overall Consumer Price Index (CPI) rose 0.4 percent in August, bringing its increase over the last year to 1.3 percent. The core index also rose by 0.4 percent, bringing its increase over the last year to 1.7 percent.
With both indexes, the increases were driven by sharp reversals from price declines during the shutdown period. Gas prices rose 2.0 percent in August, after rises of 12.3 percent and 5.6 percent in June and July, respectively. They had fallen by 10.5 percent in March and 20.6 percent in April. They are still down 16.8 percent over the last year.
Apparel prices, which had fallen 8.8 percent from February to May, rose 0.6 percent in August after rising 1.7 percent and 1.1 percent in June and July, respectively.

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How Dairy Monopolies Keep Milk Off the Shelves

August 20, 2020

Institute for New Economic Thinking
See article on original site
Consolidation in the dairy industry has created separate, inflexible supply chains for consumers and commercial markets. When COVID killed commercial demand, perfectly good milk and cheese was wasted.
People rarely think about where the milk on supermarket shelves or the cheese on their pizzas comes from. But COVID-19 and the lock down of the economy in March 2020 brought with it the specter of unhappy dairy farmers dumping milk while supermarkets rationed milk products and food banks could not keep up with demand. The fault lines in America’s system of production and distribution of milk and dairy products stood out in bold relief. Nearly 40 years of consolidation and specialization in milk and dairy foods processing have

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Evans-Frantz: Sen. Leahy Should Lead on Global COVID Response

August 15, 2020

Brattleboro Reformer
See article on original site
While Vermont has had the lowest death rate from COVID, most of us have heard how this pandemic is killing tens of thousands of our fellow Americans. However, we have heard less about the toll this pandemic is taking in developing countries. On July 31, the U.S. House of Representatives passed historic legislation for a no-cost global COVID response that would unblock trillions of dollars worth of assets from the IMF – without costing U.S. taxpayers a cent, and without putting poor countries further into debt. U.S. Sen. Bernie Sanders, I-Vt., has led this effort in the Senate. U.S. Sen. Pat Leahy, D-Vt., should publicly support.
Last month, Senator Leahy eloquently explained the urgent need for Congress to introduce bold measures to support

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The Same Racist Rhetoric Used To Oppose D.C. Statehood Keeps The Federal Government Dysfunctional

August 15, 2020

Talking Points Memo
See article on original site
The House’s passage of legislation approving D.C. statehood in late June marked a milestone in the political struggle for full enfranchisement of the district, which, until recently, was a majority African-American city, and would become America’s most predominantly African-American state. The bill, passed largely along party lines, met pushback from Republicans who recycled the same racist rhetoric opponents of statehood have long used, suggesting that non-white places don’t deserve congressional representation. Sen. Tom Cotton (R-AR), for instance, contrasted D.C. with Wyoming, which, he said, was a “a well-rounded working-class state. A new state of Washington would not be.”
Cotton then pivoted to the other half of the GOP’s argument that

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INSIGHT: The Simple Fix For Corporate Income Tax—Tax Stock Returns

August 15, 2020

Bloomberg Tax
See article on original site
It is time for a major and simple overhaul of the corporate income tax system. The main problem with the current system is that it is focused on the wrong target. Instead of taxing corporate profits, we should be taxing stock returns. Before explaining how this alternative would work, it is worth going through some recent history.
Democrats in Congress were unanimous in opposing the Tax Cut and Jobs Act (TCJA) the Republicans pushed through Congress in 2017. However, there is one aspect to the tax cut that nearly all Democratic economists would favor: the idea of lowering the corporate tax rate in exchange for limiting deductions.
Prior to the 2017 tax cut, the corporate income tax rate was 35%, however few companies paid anything close to this

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Pandemic Leads to More Precarious Housing Situation

August 14, 2020

Over 20 million people lost jobs and wages during the initial months of the pandemic. In July 2020, the economy was still down nearly 13 million jobs from its February level. The CARES Act, which was signed into law on March 27, 2020, included a number of provisions designed to replace lost income and keep people in their homes. These federal measures, along with ones adopted in some states and cities, have undoubtedly helped millions of people stay in their homes during the pandemic. Yet, housing insecurity — as measured by missing or deferring rent or mortgage payments, or having little confidence in one’s ability to make rent or mortgage payments — was very high during the initial months of the pandemic. 
A forthcoming CEPR report will document trends and disparities in housing

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