FED: Goolsbee Sees Some Cross Currents On Warning Dashboard
Q: What indicators are you seeing that are warning signs to you?
Goolsbee: On the job market side, the u/e rate is the most known but there are a series of measures all of which are extremely informative. Job vacancies ratio to number of unemployed, that’s an important one, the hiring and quit rates. In each of these measures, they’re all saying the same thing which is directionally we’re cooling. If you overweight on the past you’d say that’s a real warning sign – e.g. the u/e rate being up 0.7pt over around a year, that’s usually a warning sign of impending a recession warning sign, as is the lower vacancies to unemployed rate. But the level remains low. The rise of consumer delinquencies on autos and credit cards, that’s another blinking sign.
But some aspects are strong, we've got some cross currents: GDP growth has been very strong, consumer spending very robust. Wage and ordinary folk’s income growth has also been quite strong, probably why spending has been stable.