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“Inflation in July is dramatically lower than it was last summer, as pandemic-induced shocks and corporate profiteering continue to abate."
“Robust public investments have powered our economy coming out of the pandemic and delivered one of the best labor markets in decades. Policymakers must continue to build on the strength of the job market by doubling down on critical investments to empower workers and create an economy where everyone can thrive."
"Exploring just how compatible low unemployment and low inflation are should be the North Star ... This is a vast border we could test," said Lindsay Owens, executive director of Groundwork Collaborative, a labor-focused economic policy group. "The timeline for discussing cuts is probably like October."
The first camp attributes most of the recent decline in inflation to the ebbing of these one-time supply disruptions, not rate increases, which are supposed to work through the labor market. “It’s calling into question a lot of the old assumptions,” said Lindsay Owens, executive director at the Groundwork Collaborative, a liberal think tank.
"Chair Powell and the Fed continue to push the false choice peddled by inflation hawks that we have to choose between a strong labor market and lower prices," Groundwork Collaborative executive director Lindsay Owens said Tuesday in a statement. "The data show that we can have both."
“It’s crystal clear that low inflation and low unemployment are compatible,” Rakeen Mabud, an economist at the Groundwork Collaborative, a progressive think tank, told our colleague Talmon Joseph Smith. “It’s time for the Fed to stop raising rates.”
“The dangerous reflex to hike rates, no matter the causes of inflation, is both a policy failure and a failure to imagine a world in which workers are anything other than expendable. The Fed should end its rate hiking campaign for good.”
“Biden deserves a lot of credit for never endorsing the idea that we need to destroy the labor market,” Owens said.
And that gets us to opportunity, which is what the macroeconomic shocks provide. Firms probably did experience real increases in their production costs, which gives them good reason to raise their prices…to a point. But what has been documented by Groundwork Collaborative and separately by Isabella Weber and Evan Wasner is corporate executives openly discussing increasing returns using “pricing power,” which is code for charging more than is needed to offset their costs.
“My biggest takeaway from the incredible success of the labor market recovery from the pandemic recession was that the jobless recovery that followed the Great Recession was a policy choice — a cruel and misguided policy choice,” said Lindsay Owens, the executive director of the liberal think tank Groundwork Collaborative.