Apr 11, 2024

The latest mixed signals on the economy.

The latest mixed signals on the economy.
Photo by Eric Prouzet / Unsplash

Plus, a reader question about the minimum wage.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

Are you new here? Get free emails to your inbox daily. Would you rather listen? You can find our podcast here.

Today's read: 11 minutes.

Today, we're breaking down the latest jobs report and the latest inflation report. Plus, a reader question about a minimum wage hike


Yesterday, we referred to the "European Union Court of Human Rights" in a quick hit about a climate change court ruling. No such court exists. The court is called the European Court of Human Rights, but a separate court called the Court of Justice of the European Union does exist. Europe is confusing. That's why we (mostly) stick to U.S. politics. 

We apologize for the error.

This is our 105th correction in Tangle's 244-week history and our first correction since Friday, April 5th. We track corrections and place them at the top of the newsletter in an effort to maximize transparency with readers.

Some big announcements.

  • First off, we are publishing a members-only Friday edition tomorrow where I am going to examine some recent claims from Elon Musk about immigration. This piece is at the intersection of two issues I care a great deal about, immigration and voter fraud. If you aren't yet a member and want to read the piece, subscribe here.
  • Our live event in New York City is next week — Wednesday, April 17th! Our guest lineup has changed slightly: We now have Catherine Rampell (Washington Post), Josh Hammer (Newsweek), and Michael Moynihan (The Fifth Column podcast) on our panel. General admission tickets are sold out, but we have a few VIP tickets left. We're working with the venue to release some more tickets, but in the meantime, you can go get yours here.
  • We have a new YouTube video up. In it, I sat down with Edwin Raymond, the author of "An Inconvenient Cop." You can watch our interview below:

Quick hits.

  1. Former President Trump said if elected he would not sign a national abortion ban, even if Congress passes one. (The comments)
  2. Hamas's political leader Ismail Haniyeh said three of his adult sons were killed in an Israeli airstrike in central Gaza. (The strike) Separately, the U.S. is once again warning that Iran or its proxies are preparing a strike against Israel. (The warning)
  3. The Environmental Protection Agency released new rules requiring public water companies to remove six substances commonly known as PFAS or "forever chemicals." (The rules)
  4. Democrats in Arizona's state legislature attempted to repeal an 1864 law banning nearly all abortions that the state Supreme Court said was enforceable, but were blocked in both chambers by Republicans. (The fight
  5. Republicans in the House of Representatives blocked a procedural vote on a bill renewing the Foreign Intelligence Surveillance Act (FISA). (The vote)

Today's topic.

The economy. In the last week, the government made two big announcements on the economy. First, on Friday, the Department of Labor reported that the economy added 303,000 jobs in March, though full-time employment decreased slightly. The total jobs added far surpassed economists' predictions that roughly 200,000 jobs would be added. Additionally, unemployment held steady at 3.8%, continuing the labor market’s hot hiring streak. 

Then, on Wednesday, the Department of Labor’s Bureau of Labor Statistics reported that the consumer price index (CPI) rose faster than expected in March.

Reminder: Inflation is measured by the Consumer Price Index (CPI), which is designed by the Bureau of Labor Statistics to track price fluctuations for urban buyers who represent the vast majority of Americans. The CPI tracks 80,000 items in a fixed basket of goods and services, representing everything from gasoline to apples to the cost of a doctor's visit.

According to the latest data, the CPI rose 0.4% for the month and the 12-month inflation rate came in at 3.5%, which was 0.3 percentage points higher than in February. The core CPI, which excludes volatile food and energy components, also rose 0.4% on a monthly basis and 3.8% year over year. Shelter costs drove much of the increase in inflation.

Officials for the Federal Reserve indicated that geopolitical turmoil and rising energy prices remain risks that could push inflation higher. “Participants generally noted their uncertainty about the persistence of high inflation and expressed the view that recent data had not increased their confidence that inflation was moving sustainably down to 2 percent,” minutes of the Fed’s meeting said.

“The recent data do not… materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2 percent on a sometimes bumpy path,” Fed Chairman Jerome Powell said last week. “On inflation, it is too soon to say whether the recent readings represent more than just a bump. We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent.”

Today, we're going to explore the mixed news on the economy and some of the reactions to it with views from the left and right, then my take.

What the left is saying.

  • The left is concerned by the latest inflation report, arguing the Fed may need to rethink its target inflation rate.
  • Some are heartened by the latest jobs numbers and credit Biden for overseeing a strong economy.
  • Others blame corporate greed for ongoing inflation.

In Bloomberg, Mohamed A. El-Erian said the “Fed faces a big risk, but it’s not the one many think.”

“I have been arguing for almost a year now, here and elsewhere, that US consumer price inflation would become sticky after a period of favorable disinflation going into the end of 2023. Wednesday’s hotter-than-expected data release, the third in a row, is evidence that this scenario is indeed unfolding,” El-Erian wrote. “At its simplified level, the continuation of favorable US disinflation required that price increases in the services sector moderate at a significantly faster rate before the outright price declines that we’ve seen in goods reversed course. This is not happening. Thus, the turn higher in the inflation metrics.”

“Rather than maintain a policy reaction function anchored by excessive dependence on backward-looking data, the Fed would be well advised to take this opportunity to undertake a belated pivot to a more strategic view of secular prospects. Such a pivot would recognize that the optimal medium-term inflation level for the US is closer to 3% and, as such, give policymakers the flexibility to not overreact to the latest inflation prints,” El-Erian said. “In doing so, it earns important policy optionality while minimizing the threat of both de-anchoring inflationary expectations and further damaging its credibility.”

In The New York Times, Paul Krugman wrote “good economy, negative vibes: the story continues.”

“When it comes to economic news, we’ve had so much winning that we’ve gotten tired of winning, or at any rate blasé about it. Last week, we got another terrific employment report — job growth for 39 straight months — and it feels as if hardly anyone noticed,” Krugman said. “Job creation under Biden has been truly amazing, especially when you recall all those confident but wrong predictions of recession. Four years ago, the economy was body-slammed by the Covid-19 pandemic, but we have more than recovered.”

“The elephant in the room — and it is mainly an elephant, although there’s a bit of donkey too — is partisanship. These days, Americans’ views of the economy tend to be determined by political affiliation rather than the other way around,” Krugman wrote. “If you ask me, more progressives should celebrate the current economy, not just to help Biden get re-elected, but because economic success vindicates the progressive vision… The truth is that the U.S. economy is a remarkable success story. Don’t let anyone tell you that it isn’t.”

In his Substack, Robert Reich suggested “monopoly power” is behind inflation.

“Corporate profits reached a record high in the fourth quarter of last year. And they’re keeping their prices sky-high,” Reich said. “This is one of the biggest reasons the American public is not yet crediting Biden with a great economy. Most people still aren’t feeling it… We’re seeing this pattern across much of the economy — especially with groceries. At the end of 2023, Americans were paying at least 30 percent more for beef, pork, and poultry products than they were in 2020.”

“First, antitrust laws must be enforced. Kudos to the Biden administration for enforcing antitrust more aggressively than any administration in the last 40 years… But given how concentrated American industry has become, there’s still a long way to go,” Reich wrote. “Second, big corporations must not be allowed to use their power to gouge consumers.” Senator Elizabeth Warren’s Price Gouging Prevention Act could help, and is “just as necessary as aggressive antitrust enforcement — and an example of what could and will be done if Democrats sweep the 2024 elections.”

What the right is saying.

  • The right criticizes Biden’s handling of the economy, pointing to the inflation report as evidence that his policies are hurting average Americans.
  • Some question the value of the jobs being added to the economy. 
  • Others say Biden needs to level with the country about how he plans to address inflation. 

In National Review, Charles C.W. Cooke said “inflation should not be a surprise.”

“That interest rates have been raised as precipitously as they have was sadly necessary. But that’s all it was: necessary. Day in, day out, our media class wonders why the public does not like this economy, and why, as a result, it does not like this president,” Cooke wrote. “The public does not like this economy because, far from being the ‘transitory’ phenomenon that the White House promised, ‘unexpectedly’ high inflation continues to be a problem, which has to be treated with ‘unexpectedly’ higher interest rates. 

“And the public does not like this president because it understands that, rather than retrench in the wake of the bipartisan Covid-era spending spree, he and his party made things worse. Americans, history shows us, will forgive a president who is obliged to fight inflation with higher interest rates — unless, of course, he is the same president who is blamed for the inflation in the first place,” Cooke said. “That this has not yet destroyed Biden’s ersatz ‘Scranton Joe’ image is a testament to the corruption of the press. It is not ‘the rich’ who are suffering in this economy; it’s everyone else.”

In The Federalist, Joseph Lobue argued “Biden is only ‘adding’ jobs because Americans need extra side hustles to make ends meet.”

“Democrats will tell you the [jobs] report is rosy and bright, that the economy is heading in the right direction, and that your negative instincts and impressions about the economy are wrong. In reality, the report is abysmal,” Lobue wrote. “Democrats claim that the economy added 303,000 jobs in March — but it added no full-time jobs at all in March. The economy actually shed 6,000 full-time jobs that month. In fact, full-time employment in the United States has dropped in each of the past four months.”

“The vast majority of these jobs — 75 percent — are second jobs. Under the Biden economy, the number of people who have had to simultaneously work both a full-time job and a second part-time job just to make ends meet has hovered at historical highs,” Lobue said. “Perhaps Americans tolerate this situation because federal civil servants tell them times are good when they are not. Times are always good around Washington, D.C., even when they are bad everywhere else.”

In USA Today, Nicole Russell wrote “inflation is still bad. It's both Trump and Biden's fault. Who will fix it?”

“It started with former President Donald Trump and it ends with President Joe Biden. Not the election, the economy. Specifically, inflation. Something for which neither candidate wants to take responsibility, though both should,” Russell said. “Inflation began to surge as a result of the pandemic. Well-founded fears of a recession or worse drove the Trump administration to pour trillions of borrowed dollars – Trump’s infamous stimulus – into the economy to keep things afloat.”

“The Biden administration still fails to acknowledge the reality of what inflated prices on everyday goods for average Americans does to their finances. This is where he shoulders his share of the blame,” Russell added. “People don’t know how the overall economy is doing because most folks aren’t economists. They’re just purchasing goods their families need. So they know if they’re spending more than normal – and they are. Biden would earn considerable political capital if he would be honest with Americans about inflation, where it came from, his role in perpetuating it – and propose a plan to lessen it.”

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. If you have feedback, criticism, or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

  • The job reports looked good at first blush, but the details are concerning.
  • Unfortunately, inflation is not going in the right direction, which is the major story of this economy.
  • In the end, I don’t think the poor economic sentiment is that complicated. Things are just getting more expensive. 

I first saw the news about the jobs report in a CNBC article that popped up in my feed. CNBC described the labor market as "bustling and resilient;" I read the first few paragraphs of their story, then left feeling pretty good about things.

Not until I started doing research for this piece and reading some of the commentary from the right did I realize the news wasn't quite as good as I thought. Doing that work provided a nice reminder of why reading news from multiple sources is important. The CNBC story did not note the fact that the number of full-time workers fell by 6,000, while part-time workers grew by 691,000, until its 11th paragraph. As Joseph Lobue noted (under “What the right is saying”), multiple job holders also rose by over 200,000, which plenty of people could take as a negative sign instead of a positive one.

Make no mistake: The economy is still relatively healthy by most traditional measures. It isn't the disastrous hellscape that some Republicans campaigning against Biden want people to think it is — job growth has been consistent, wages are still rising, the stock market is doing well, and unemployment is under 4%. We’re outperforming almost every other country post-pandemic. But on the whole, the jobs report was genuinely a mixed bag.

And then the inflation news came.

Big picture, the CPI figures are concerning. Yesterday I wrote about the dangers of canceling billions of dollars in student debt when we are still fighting inflation, and that was before the CPI report — one of the most discouraging in the past year. The Fed has been doing a pretty good job of wrangling inflation, and one discouraging report doesn’t undo that. A few months ago most of the chatter was about how close we were to the much desired "soft landing" — where inflation recedes without a recession — and we even did a whole piece in January on the good economic news.

But inflation has just kept hanging around. As Byron York pointed out in The Washington Examiner, "inflation has risen slowly but steadily for the last six months… inflation rose just 0.1% last October. It rose 0.2% in November and December, 0.3% in January, and now 0.4% in February and March, for an annual basis of 3.5%. It’s been more than six months since inflation ticked downward."

Economic reports are always noisy and economic commentary is — for me — the hardest to parse. I understand the politics of the economy well, but I’m not an expert in economics. So I try to learn from the experts. Yet economists disagree on basically everything and they seem to be perpetually wrong in their predictions, so I never really know who or what to believe. All that noise often complicates political narratives. It’s hard to fully understand the economy normally, and on top of that the commentary about why the vibes don't match the data over the past year has been endless.

Right now, I'm starting to think that disconnect isn't that complicated after all. A lot of people are employed, and they are making more money than they were a few years ago. But that doesn't have to mean they feel good. Think about it this way: Someone wants to live in an apartment that costs $2,600 a month in late 2023, so they go to work and ask for a $5,000 raise. A few months later they get the raise, then they go back to rent the apartment. Now it costs $3,000 a month — $400 more a month, and $4,800 more a year. So they can still barely afford it. That person isn't going to feel great about the economy or their raise, they're going to feel like they can't improve their circumstances even when they do well.

I’m reminded of a theory in evolutionary biology called “the red queen hypothesis,” which says that constant evolution in a competitive system is only enough to subsist. The name comes from this quote from Lewis Carroll’s Alice in Wonderland: “It takes all the running you can do, to keep in the same place.” For our economy, the job market is strong and wages are climbing but prices for housing and gas and groceries keep going up. So all the good news be damned, the vibes are not just vibes — they are a product of the fact that things just keep getting more expensive. It doesn’t really matter whether it’s due to post-pandemic effects, corporate greed, or a result of our monetary or fiscal policy; everyone is running, but we’re stuck in the same place.

Take the survey: What do you think of the latest news on the economy? Let us know!

Disagree? That's okay. My opinion is just one of many. Write in and let us know why, and we'll consider publishing your feedback.

Help share Tangle.

I'm a firm believer that our politics would be a little bit better if everyone were reading balanced news that allows room for debate, disagreement, and multiple perspectives. If you can take 15 seconds to share Tangle with a few friends I'd really appreciate it — just click the button below and pick some people to email it to!

Your questions, answered.

Q: You mention in this article that a $15 minimum wage "wouldn’t make sense as a matter of overarching federal policy" – would you mind expanding on this a little bit? I live in Canada, where the federal minimum wage is $16.65 and where even the province with the lowest minimum wage stands at $14 and this is hardly a livable wage. I'm curious what your reasoning behind this is. 

— Alex from Toronto, Canada

Tangle: Thanks for the question. In a very economic edition from a few weeks ago, we covered the argument over whether we should adopt a 32-hour workweek. This question is in response to that issue, where I said that a $15 minimum wage wouldn’t make sense as federal policy.

First, I want to make two things clear. 1) The minimum wage and living wage are different things. A living wage is defined as the amount a person needs to earn as a primary source of income to support their household above the poverty line, and it’s calculated based on inflation, local economics, and the number of dependents in that household. A minimum wage is set by the government to be the minimum hourly amount that an employer must compensate an employee. Although the living wage is an older idea, it wasn’t part of the rationale for setting a federal minimum wage; the first minimum wage was set in 1938 at $0.25 per hour, (or $4.28 in today’s dollars).

Second, the minimum wage absolutely should be raised. It was set in 2009 at $7.25 an hour, and lifting it is long overdue. For reference, $7.25 would be about $10.09 in today’s dollars, and the minimum wage peaked in 1968 at $10.54 in today’s dollars. Research published last year by economists at Stanford, Penn, and Chicago found that a moderate increase in the minimum wage had short-term and long-term benefits to employees and the labor market alike.

But that doesn’t mean that a large increase would be just as beneficial. The same paper found that a large increase in the minimum wage would have short-term benefits for employees, but would be detrimental to the labor market and employees in the long run. The Congressional Budget Office reminds us that significant hikes in the minimum wage will come with a loss of available jobs, which hurts the labor force and the ability of workers to bargain collectively.

So, long story short: Raising the minimum wage makes sense, but it doesn’t need to be to the same level as a living wage. I don’t think it makes sense to require all jobs, many of which aren’t full-time posts going to workers supporting a family, be legally required to pay as if they were. 

Lastly, I’ll also state that I have no problem with the cities or states making their minimum wages higher. But setting a federal minimum to be tied to what a national average is — if it’s defined as a living wage or something else — just categorically doesn’t make sense.

Want to have a question answered in the newsletter? You can reply to this email (it goes straight to my inbox) or fill out this form.

Under the radar.

The trial of 27 people charged in connection with the worldwide Panama Papers began this week. In 2016, a massive document leak known as the Panama Papers revealed a wide-ranging money-laundering scheme that illustrated how some of the richest people in the world hide their money. The leak included a collection of 11 million secret financial documents. Repercussions from the leak were immediate, with the prime minister of Iceland resigning and leaders in Ukraine, China, Russia, and Argentina facing additional scrutiny. The long delayed trial is finally underway. The Associated Press has the story.


  • 0.7%. The 12-month percentage change in price for food at home (groceries) in May 2021, the lowest since the start of the pandemic. 
  • 13.5%. The 12-month percentage change in price for food at home in August 2022, the highest since the start of the pandemic.
  • 1.2%. The 12-month percentage change in price for food at home in March 2024.
  • 4.1%. The increase in hourly earnings for private sector employees over the past 12 months, according to the U.S. Bureau of Labor Statistics.
  • 26. The number of consecutive months that the unemployment rate has been below 4%. 
  • 71,000. Of the 303,000 nonfarm jobs added in March, the number that were government jobs.
  • 0. Of the 303,000 nonfarm jobs added in March, the number that were manufacturing or utilities jobs.
  • 7.1%. The percent increase in part-time employment between March 2023 and March 2024. 
  • 1.0%. The percent decrease in full-time employment between March 2023 and March 2024. 

The extras.

Yesterday’s survey: 1,109 readers answered our survey on Biden’s loan forgiveness with 65% finding opposing it in theory and legally. “Agree that reforming the student loan programs is key, eliminating predatory lending and better qualifying borrowers,” one respondent said.

What do you think of the latest news on the economy? Let us know!

Have a nice day.

When he first started teaching science, Patrick Moriarty passed out worksheets to his class showing the trajectories of upcoming eclipses. Since only one was expected to pass near their hometown in Upstate New York, he wanted to make it an occasion for his class to reunite. That was in 1978. 46 years later, Moriarty successfully brought his class together through Facebook and made the eclipse reunion a reality. About 100 former classmates and some of their families attended his event. “When teachers go into education, they hope that they can be that kind of teacher that would have an impact on people and make a difference for people,” Moriarty, 68, said. “And this event right here just firmed it up for me that I guess I did okay.” The Washington Post has the story.

Don't forget...

📣 Share Tangle on Twitter here, Facebook here, or LinkedIn here.

🎥 Follow us on Instagram here or subscribe to our YouTube channel here

💵 If you like our newsletter, drop some love in our tip jar.

🎉 Want to reach 100,000+ people? Fill out this form to advertise with us.

📫 Forward this to a friend and tell them to subscribe (hint: it's here).

🛍 Love clothes, stickers and mugs? Go to our merch store!

Subscribe to Tangle

Join 100,000+ people getting Tangle directly to their inbox!