Just when you thought economics reporting could not get any worse, the NYT leads the way. The headline of a news article told readers that "Japan's recovery is complicated by a decline in household savings." The piece reports that consumption is now increasing (barely), but because real wages have not risen, it has led to a decline in household savings. The household saving rate in Japan is now negative. It then tells us that businesses are big savers, but that money is needed to finance the government's budget deficit.
Okay, now if the NYT could find someone who had taken an intro econ course that person could explain to its reporters and editors that if consumers, businesses, or the government spends more money, it will lead to additional income and employment, and additional saving. If the economy is below full employment, its spending is not limited by its current saving. (If it's not below full employment then it doesn't have a problem with a recovery, by definition its economy would have already recovered.)
Anyhow, that's what folks who learned economics would say.
Robert Samuelson (sorry, he's not going to take advantage of my vacation) gets it badly wrong about the economy again. He began his Monday column by telling readers:
"The Federal Reserve is at a crossroads, and it doesn’t know where it’s going."
Really? The Fed doesn't know where it's going? How about Robert Samuelson doesn't know where it's going?
It gets worse:
"There was a time when we were more confident. We didn’t pay attention to details, because the experts had matters in hand. During the Alan Greenspan era (1987-2006), the Fed was routinely seen as an economic superman. Its surgical shifts in the federal funds rate seemed to stabilize the economy: Expansions were long, recessions rare and mild."
Umm, no. "We" did pay attention to details. We yelled as loudly as we possibly could that there was a huge housing bubble that would sink the economy when it burst. Of course papers like the Washington Post did not pay attention to us because it did not fit their story that the Fed was an economic superman. Such nonsense was the conventional wisdom at the time and the paper did not want to give those who challenged the claim a voice. Now, it wants to pretend that people who understood the basic economics of the housing bubble, and the stock bubble before it, did not exist.
And Samuelson gives us more error:
At least this is what he says in his column today. The data strongly disagree with him. In the last four years productivity growth has averaged less than 1.0 percent a year. Productivity growth measures the rate at which robots and other technology replace people. In the years from 1995-2005 productivity growth averaged over 2.5 percent annually. In the period from 1947 to 1973 it averaged close to 3.0 percent.
The data indicate that we are seeing a slowdown in technology replacing labor (which should allow for rising living standards) rather than the speedup in the robot story. As a practical matter, workers should be far more concerned that the Federal Reserve Board will take their job, by slowing the economy with higher interest rates, than a robot will take their job.
Note: correction made, thanks Ethan.
It is amazing how many reporters want to be mind readers. I guess it's hard to make a living as a mind reader. Anyhow, David Leonhardt took some steps in the mind reading direction when he told readers:
"They both [President Obama and Hillary Clinton] consider the stagnant incomes of recent decades to be a defining national issue. They both want to address the stagnation through a combination of government programs and middle-class tax cuts. They both see climate change as a serious threat. They both think workers have too little power and corporations too much."
Wow, so David Leonhardt knows what President Obama and Hillary Clinton really "consider," "want," "see," and "think." That's impressive, but readers may want to be somewhat skeptical. After all, most of us recognize that politicians don't always reveal their true thoughts. We know what they say their priorities are, but only a mind reader would try to tell us what they really think.
There are also some objective facts that provide some basis for skepticism on this topic. First, many of the big winners from rising inequality are friends and campaign contributors to Hillary Clinton (and Barack Obama). It's possible that they both want to pursue policies that would take away large amounts of money from these people, but some folks may question this fact.
Also, the incredibly narrow list of policies that Leonhardt says is on Clinton's plate indicates that she probably is not serious about reducing inequality and promoting middle class wage growth. For example, many of the highest incomes in the economy are in the financial sector. If Clinton were serious about attacking inequality it is hard to believe that she would not be promoting a financial transactions tax. This could raise as much as $180 billion a year (more than $2 trillion over a decade). This money would come almost entirely out of the pockets of the high rollers in the financial industry. It would also increase economic efficiency and growth. Since Clinton has never indicated any interest in financial transactions taxes it is difficult to believe that she has much interest in countering inequality.
Lydia DePillis and Jim Tankersley had an interesting wonkblog piece on how even mainstream Democrats are now at least paying lip service to the argument that unions are necessary to reduce inequality. The piece includes a pro-union statement from Robert Rubin who it describes as someone "whom liberals consider overly friendly to Wall Street."
This misrepresents Rubin's background. Robert Rubin was a top executive at Goldman Sachs before coming to the Clinton administration. After leaving the Clinton administration he went to Citigroup where he made tens of millions of dollars from the marketing of subprime mortgage backed securities. The reason that Robert Rubin has influence in policy debates is because he is very rich from the money he made on Wall Street and he can get other very rich Wall Street types to donate money to Democratic candidates and favored causes. Given his background, referring to Robert Rubin as someone who is "close to Wall Street" would be like referring to Rich Trumka as someone who is close to organized labor.
The big money is sweating big time since it seems large segments of the American public have caught wind of the Obama administration's plans for the Trans-Pacific Partnership. After several decades in which trade has been a major factor depressing the wages and living standards of the country's workers, the Obama administration is going back to the well to push for more.
The immediate goal is the Trans-Pacific Partnership (TPP), which includes a number of countries in Asia and Latin America. While it excludes major countries like China and India, the explicit intention is to expand the pact so that these countries will eventually be included. This fact is important in assessing this deal.
For example, the Washington Post (which has a religious devotion to these sorts of trade deals) ran a column by three prominent economists, David Autor, David Dorn, and George Hanson (ADH), which tells readers the TPP is good for the country's workers. ADH is an interesting team to make this argument since they have written several papers showing that our patterns of trade have been an important force depressing the wages of a large segment of the U.S. workforce.
ADH start out by saying that manufacturing workers have little to lose in this deal because tariffs with the countries in the pact are already near zero, therefore we will not be opening ourselves to new competition if the few remaining barriers are eliminated. Here is where the possibility of expansion is important.
Many prominent economists, including many strongly pro-trade economists like Fred Bergsten, the former president of the Peterson Institute for International Economics, have argued the TPP should include rules on currency manipulation. While this may not be a big issue with most of the countries in this round, it is certainly a big deal with China and other countries that could join. According to calculations by Bergsten and others, actions of foreign central banks to raise the value of the dollar have added several hundred billions of dollars to our trade deficit and cost us millions of manufacturing jobs.
The Federal Reserve Board released data on profits for 2014 this week. The good news, for those who are not Mitt Romney-types, is that the profit share fell in 2014 from its 2013 peak. Before-tax profits were 0.6 percentage points lower as a share of GDP than they had been in 2013. After-tax profits were 1.2 percentage points lower.
There are several points worth noting here. First, the drop in profits as the labor market has begun to tighten some lends credence to the view that a substantial portion of the rise in corporate profits was cyclical, not secular.
The point is that we are not seeing a surge in profit shares because of the inherent dynamic of capitalism. We are seeing a rise in profit shares because incompetents who couldn't see an $8 trillion housing bubble were running the economy. When the bubble burst and the economy collapsed, the resulting weakness in the labor market led to a huge rise in profit shares.
Folks may point to a similar rise in profit shares in the earlier part of the last decade. For those old enough to remember, this also followed the collapse of an asset bubble. And contrary to popular belief, the resulting recession was actually very severe from the standpoint of the labor market. We did not get back the jobs lost in the downturn until January of 2005. This was the longest stretch without net job growth since the Great Depression, until the current downturn. In short, weak labor markets lead to high profits.
This takes us to the Federal Reserve Board. The plan to raise interest rates is a plan to weaken job growth. And, it looks like it also might mean a plan to prevent profit shares from falling and wage shares from rising.
That might sound like bad news to most folks, but of course most folks will probably never hear it. We'll just hear highly paid economist types wringing their hands over the rise in inequality. No doubt the major foundations will make large grants to researchers trying to understand the problem.
That would be unless the business in the oil industry. A NYT piece on the drop in inflation across Asia seems confused on this point. It notes the sharp decline in the inflation rate across the region, which is mostly due to lower oil prices, and raises the concern that this may discourage businesses from investing.
This logic doesn't work insofar as the lower inflation is simply due to lower oil prices. From the standpoint of a business considering a new investment what matters is the price of the product it sells, not prices in general. If the price of cars is expected to rise by 2 percent a year, then businesses will take this projected rate of inflation into account in planning their investment. The fact that lower oil prices will reduce the overall rate of inflation should not affect its decision, except insofar as lower oil prices could mean that consumers have more money to spend on cars.
The basic story here is straightforward, lower oil prices are good for promoting growth except in countries that are large producers of oil. They are of course awful from the standpoint of the environment. (In addition to increasing oil consumption and greenhouse gas emissions directly, lower oil prices will also discourage investment in clean energy.)
The silly things you read in the NYT! It really doesn't matter what units oil is priced in. We get a market price that is determined by supply and demand. This will be higher measured in euros any time the euro falls in value simply because at the same price measured in other currencies, oil will cost more euros.
It would only matter if the price were in dollars if there were long-term contracts that are specified in dollars. In some cases, companies will have long-term contracts, but not all of these are in dollars. Countries and companies can contract for oil in any terms they want. They can do it yen, pounds, even peanut butter.
Brad thinks he has a winner policy with TPP, taking issue with Paul Krugman who says the deal is not worth doing. Brad argues that even if the deal is worth half of the 0.5 percent of GDP figure that is widely cited, we are still talking about 0.25 percent of GDP, or $75 billion a year for the region as a whole and $45 billion for the U.S.
He acknowledges that these gains may not be spread evenly, but wants to see evidence that the losses to workers would be larger than their share of this $75 billion. He also notes Krugman's complaint about increased protection for intellectual property, especially drug patents, and wants to see evidence that these losses will be large enough to offset the $75 billion in annual gains. Okay, let's take the DeLong challenge.
First, one of the issues raised by many TPP opponents is that it will almost certainly have nothing on currency. This mean that it will not make it any easier, and could well make it more difficult, for the United States to address the trade deficit that results from having an over-valued dollar. Whether or not that ends up being the case is of course speculative, but this could be a very big deal.
As some folks have argued, the United States has faced a serious problem of secular stagnation, meaning it does not have enough demand to bring the economy to full employment. In principle this problem can be easily addressed by a big government stimulus program. But we don't live in principle, we live in Washington, where no one in a position of power is prepared to talk about big increases in the government deficit. Hence, secular stagnation is a real live problem.
It seems the paper is having more than a few problems with logic these days. (See yesterday's concern that inflation in the euro zone will drop from a small positive to a small negative.) An article on the rise of Podemos, a left populist party in Spain, discussed Podemos' program:
"The program also calls for new taxes on the wealthy and on financial transactions. It promises higher pensions and salaries, as well as a rise in spending on health care, education and other social services — without, however, elaborating on how those plans would be paid for."
Presumably a main reason for new taxes on the wealthy and on financial transactions is to pay for the spending on health care, education, and other social services. It is also worth noting that the program calls for a shortening of the workweek (mentioned in the previous paragraph) which should help spread the work that is available. This wiill reduce Spain's unemployment rate (currently close to 24 percent) thereby reducing the need for some public transfer payments like unemployment benefits.
At one point the piece tells readers about the boast of Mariano Rajoy, Spain's current prime minister, that the country had the fastest growth in the euro zone last year at 1.4 percent. The piece did not tell readers that even with this growth Spain is still projected to have a per capita GDP in 2019 that is more than one percent lower than it was in 2007 before the recession. This would imply a far worse and more prolonged downturn than the United States experienced in the Great Depression. The I.M.F. projects the unemployment rate in 2019 will be 18.5 percent.
The piece also neglected to tell readers that Spain had been running budget surpluses before the recession. Unlike Greece, Spain did not have a problem with a profligate public sector. Its problem was a huge housing bubble and construction boom financed in large part by irresponsible German banks.
The article also at one point notes that a part of Podemos program is:
"revising the statutes of the European Central Bank to make full employment one of its goals."
It would have been worth pointing out that this change would make the goals of the European Central Bank (ECB) the same as the goals of the Federal Reserve Board. The Fed has a dual mandate of price stability and high employment. Currently the ECB's only mandate is to keep the inflation rate below 2.0 percent. As a result, its first president, Jean Claude Trichet, patted himself on the back when he left his post in 2011. Even though the euro zone's economy was in shambles, he could boast that the bank had met its inflation target.
Okay, this is no longer amusing. Can we stop the nonsense about deflation? It doesn't make a f***ing bit of difference whether prices are rising at a small positive rate or whether they are falling at a slow rate, except for the fact that the inflation rate is lower.
This really should not be hard to understand. The inflation rate is a composite of millions of price changes. When the inflation rate is very low, as it is now in the euro zone, a large portion of these price changes are already negative. Since the overall inflation rate is positive, it means that the increases are either somewhat more numerous or larger in absolute size than the decreases.
However, suppose the ratio shifts, from say 55 percent increases against 45 percent decreases, to the reverse. How can this shake the economy? Many businesses were already looking at falling prices, now a few more are looking falling prices, so what?
The point should be simple, the problem in the euro zone is an inflation rate that is too low, which means the real interest is higher than would be desirable given the weakness of the economy. Having the inflation fall further makes matters worse, but crossing zero does not matter. Crossing zero does not matter. Someone please tell the NYT's editors and reporters. It should not be hard to get this one straight. (Here's the I.M.F. on the topic for those who care more about authority than evidence and logic.)
David Brooks' used his column today to bemoan the fact that the vast majority of children of parents with just high school degrees grow up in single parent families. By contrast, the vast majority of children with college educated parents grow up in two parent families. Following Robert Putnam's new book, he refers to a long list of disadvantages faced by children of non college-educated parents compared with children raised by college-educated parents. His column then turns to the need to have a moral revival to break the spiral whereby disadvantaged children have disadvantaged children.
"Next it will require holding everybody responsible. America is obviously not a country in which the less educated are behaving irresponsibly and the more educated are beacons of virtue. America is a country in which privileged people suffer from their own characteristic forms of self-indulgence: the tendency to self-segregate, the comprehensive failures of leadership in government and industry. Social norms need repair up and down the scale, universally, together and all at once."
This is an interesting appeal for restoring social norms and responsibility, but apparently Brooks doesn't intend for it to mean things like locking up, or even criminally prosecuting, bankers who violate the law. But that aside, there are some things that can be done to improve the plight of the disadvantaged other than lecture them on values. Of course better education and child care would be a great place to start. Also, more family-friendly work places would be a good idea, since that might give some single parents more time to spend with their kids, one of the problems cited by Brooks. And then there is the question of letting their parents have jobs.
This is where the Federal Reserve Board comes in. If the Fed starts to raise interest rates over the course of this year, the point will be to keep workers from getting jobs. This is the logic of higher interest rates. They discourage people from buying cars and homes, they discourage businesses from investing, and they discourage state and local government from borrowing for infrastructure and other purposes. With less demand in the economy, there will be fewer jobs and therefore less upward pressure on wages.
The people who are most likely to face job loss and to have their bargaining power undermined are less-educated workers; you know, the ones who David Brooks wants to see have a moral revival. (Yeah, I know he wants that for everyone.) So here we have a story of the advantaged (in fact very advantaged since almost all of the people calling the shots at the Fed are in the one percent) acting to undermine the economic and social condition of poor and working class people.
And folks wonder why the disadvantaged won't listen to the moral appeals of folks like David Brooks.
That's inevitable, since any fair-minded newspaper that ran a column on improper approvals would surely want to balance it out. For those who missed it, the Wall Street Journal had a column by George Mason economist Mark Warshawsky and his grad student Ross Marchand complaining about a limited number of administrative-law judges who approve disability appeals at a very high rate.
The piece referred back to data from 2008, which showed that 9 percent of Social Security administrative law judges had approval rates of more than 90 percent in a year when the overall approval rate was 70 percent. They conclude that these judges cost the disability program more than $23 billion due to wrongly approved claims.
Clearly there are judges who are too lenient and accept claims that probably should be denied, however there are also judges who are too harsh and reject claims that should probably be approved. In these cases, workers are being denied the insurance benefits for which they have paid.
The Social Security Administration (SSA) analyzed the approval patterns of 12 low-allowance judges over the period from 2010-2013. It found their approval rate increased from 21 to 24 percent over this four year period. During this period the overall approval rate had fallen from 67 to 56 percent, implying gaps of between 32 percentage points and 56 percentage points. Note that the gaps between the overall approval rate and the approval rate of the low-allowance judges is considerably larger than the gap between overall approval rate and the approval rate of the high-allowance judges highlighted in the Wall Street Journal column.
The takeaway is that there are clearly judges who error on the reject side as well as the approval side. It appears that SSA has taken steps to limit unwarranted approvals. It is not clear that measures have been taken to address the problem of judges wrongly denying appeals. We should not want to waste money on undeserving claims, but we also should not want to see workers who are genuinely disabled being denied the benefits for which they have paid. It is far from clear that at present the program errors more in awarding undeserving claims than in denying deserving ones.
In a Washington Post column on the Trans-Pacific Partnership (TPP) Summers raises the right cautions. He argues that a trade deal should have rules that prevent countries from gaining a competitive advantage by deliberately lowering the value of their currency. He also argues that a deal should not be about special privileges for corporations. And, he says that a trade deal should not jeopardize public health by raising drug prices.
Nonetheless it looks like Summers is likely still going to come down for the TPP. His rationale is that a deal has large potential gains for the United States by making East Asian markets more open to the United States.
This is hard to see. Most of these markets are already largely open, so there will not be much gain from removing whatever barriers still exist to exporting to countries like Australia. Some of the other countries, most notably Vietnam, still have substantial barriers, but it's difficult to see large gains given their limited size.
In the case of Vietnam, our current exports are around $35 billion a year. Suppose this increases by 30 percent as a result of the TPP. (This would be a large increase; remember barriers to its imports from other countries are falling as well.) This would translate into a bit more than $10 billion a year in additional exports to Vietnam. If we assume that we get 20 percent more from selling these exports to Vietnam than they would otherwise fetch (a quite large premium) that would translate into $2 billion a year. That is equal to 0.01 percent of GDP.
Of course there will be gains from openings with other countries but the total is not likely to be very impressive. A study published by the Peterson Institute for International Economics put the gains from the TPP at $77 billion a year. This is equal to about 0.4 percent of GDP. That's not trivial, but not exactly a sea change in terms of American prosperity. (It's equal to about 2 months of normal growth.) And remember, the projection is that we don't see this full gain for a decade or more. Also, this says nothing about the distribution of the gains, which may go disproportionately to those at the top. (The model assumes full employment.)
Furthermore, this estimate took no account of measures that will almost surely slow growth, most notably higher drug prices due to stronger patent protections and higher prices for other goods due to stronger copyright protection. These increased protections have the same impact as imposing large excise taxes on the items covered. (The impact of patents on drug prices is comparable to taxes in the range of 1,000-10,000 percent.)
There is an argument that these measures will provide more incentive to innovate and do creative work, but don't hold your breath on that one. When we retroactively increased the length of copyright protection from 75 to 95 years, did we give a lot of incentive to people in 1920 to do more creative work?
Anyhow, it is likely that the actual deal will have bad provisions on drugs, will include large corporate giveaways on the regulatory front, and have nothing on currency. For this reason, the TPP looks like lots of downside with not much upside.
It's too bad the NYT can't find a conservative columnist who doesn't have to resort to name-calling to make his arguments. Apparently he is upset that some of the economists close to Hillary Clinton now believe that the upward redistribution of the last three decades is a problem and that education is not the answer. He describes these people as "redistributionist" and insists that redistribution cannot do much to help the poor and middle class.
In fact, there is nothing inherent in the "redistributionist" agenda that should slow growth. Apparently, Brooks only wants people to think about tax and transfer policy, but that is not what Brooks' "redistributionists" are talking about. Suppose, for example, that corporate directors were not all friends of the CEOs who get payoffs to turn the other way as the CEOs ripoff shareholders. We could have a corporate governance structure where the directors lose their generous stipends if they overpay the CEO (as determined for example by losing a "say on pay vote"). That would likely help to bring CEO pay down to earth while increasing efficiency.
Similarly if the government stopped subsidizing non-profits that are so inept that they can only get competent people by paying high six figure or seven figure salaries. This would also be a market oriented reform that would reduce inequality. And we can take away the tax breaks that make folks like Mitt Romney and Jeff Bezos incredibly rich. Again, this would increase efficiency and reduce inequality.
We can have more open trade for doctors to give these one percenters the benefit of international competition. And we can have a Wall Street sales tax to subject the financial sector to the same sorts of taxes as other sectors.
None of these are tax and transfer policies. These are all policies that make the economy more efficient while reducing inequality. Brooks wants to pretend such policies don't exist, but ignorance is not much of an argument.
Note: Link and typos corrected, thank ltr and Robert Salzberg.
We all know that robots are making it impossible for people without a college degree to get jobs. That's a basic fact about the economy known to all right-thinking people. And, just like most of the other "facts" about the economy known by right-thinking people, it happens not to be true.
The figure below shows the change in the employment to population ratio (EPOP) for people over 25 from before the recession to the present. (It compares the average for the last four months with the year-round average for 2006.)
Source: Bureau of Labor Statistics and author's calculations.
As can be seen the drop in the EPOP for college grads, at 4.0 percentage points, is somewhat smaller than the 6.1 percentage point drop for those with some college and the 5.9 percentage point drop for those with just a high school degree. But before anyone jumps on this as evidence of the education bias in today's economy, note that the EPOP for people without high school degrees is only 1.2 percentage points. The data sure make it look like the recovery has disproportionately benefited the least educated.
In fact, these comparisons actually tilt the case against the less-educated. We all know the demographic story in which we are not supposed to be concerned about the decline in EPOPs from pre-recession levels because it's the result of baby boomers retiring. For the most part this is not true (the drop in EPOPs among workers 25-54 is almost as large as for the adult population as a whole), but insofar as retirement is an issue, it would disproportionately affect less-educated workers.
The people who have crossed into their sixties since 2006 are much less educated on average than the people turning age 25 during this nine year period. This means that the percentage of people with a high school degree or less who have decided to retiree would have risen much more than the percentage of college grads. An age-adjusted measure of EPOPs would surely show a much worse story for college grads than this chart.
Don't expect these cheap statistics to affect the public debate about technology, education, and the labor market (that depends on what important people say, not data), but folks should know it ain't true.
My mistake, Will said record exports, but of course both are true, and in the real world (as opposed to the Washington Post opinion pages) it is the net that matters, and that has soared into negative territory in the last two decades. But, I don't won't to get into the sort of arithmetic that is clearly over Will and his editors' heads.
Just to explain the logic, many of our manufacturing exports are items are assembled overseas to be re-imported back to the United States. For example, if we export the car parts to an assembly plant in Mexico, instead of sending them to be assembled in Ohio, we have a big increase in U.S. exports. Fortunately for the state of U.S. manufacturing, our autoworkers understand that this does not create jobs in the United States. Unfortunately for those trying to push trade agreements like the Trans-Pacific Partnership (TPP), our autoworkers understand that this does not create jobs in the United States.
Will gets some other points in his piece wrong. He repeatedly refers to the TPP as a "free trade" agreement. Perhaps he added the word "free" to meet his word quota at the WaPo, but it is not accurate. The deal does not seek to free all trade. For example, it will do little or nothing to open up trade in the services of doctors, dentists, and lawyers and other highly paid professionals. That could save consumers hundreds of billions a year and provide a large boost to growth. But these groups have enough power that they can ensure the protectionist barriers that support their high pay remain in place.
The deal also quite explicitly seeks to increase protectionist barriers in the form of patent and copyright protection. These barriers have the same effect on markets as tariffs in the hundreds or even thousands of percents. It is wrong to call a deal with large increases in protection a "free trade" pact.
Anyhow, this is the WaPo opinion page, so no one expects much by the way of accuracy, but even by WaPo standards, Will is stretching it.
The answer appears to be no, given the lack of news coverage. Anyhow, the Commerce Department released data on the January trade deficit yesterday. The nominal numbers were good, with a drop in the deficit from $45.6 billion to $41.8 billion, but this decline was driven mostly by lower prices for imported oil.
If we look at the deficit measured in constant dollars (i.e. adjusted for inflation), it rose by almost $3 billion compared to the average monthly deficit for the prior quarter. On an annual basis, this would imply an increase of close to $36 billion. If February and March produce similar numbers (the data are erratic), the trade numbers would shave more than 0.6 percentage points off growth for the first quarter. This one should have been worth at least a mention in the business pages.
You may have heard reports on Friday's jobs numbers saying that wage growth slowed sharply from January. It did not.
As I point out each time this becomes an issue, the data on hourly wage growth are highly erratic. This means the change from one month to the next is largely driven by errors in the data. Since errors do not tend to repeat in the same direction, a sharp uptick is likely to be followed by a sharp downtick and vice-versa. This pattern should be familiar to any economist or economic reporter who deals with the topic regularly.
For this reason, I largely ignore the monthly changes. I take the average wage for the last three months and compare to the average for the prior three months. If we do this with the February data we get an annualized rate of wage growth of 1.8 percent. That's down slightly from the 2.0 percent rate over the last year. I wouldn't make much of the slowdown, but there certainly is no case for an acceleration of wage growth, nor was there in November, December, or January.