Insight

Office of the Chief Economist

A source for unbiased economic intelligence to help improve strategic decision-making.

Constance L  Hunter

Constance L Hunter

Principal and Chief Economist, KPMG LLP

+1 212-954-3396

What’s impacting labor market participation? Why are some sectors faring better than others? How do you separate the signal from the noise? The KPMG Office of the Chief Economist answers these questions and more, providing timely insight and analysis into the economic indicators. We monitor trends and identify potential opportunities that could impact your strategic objectives. Our perspectives look at on both the short term and long term economic factors that are critical to guiding strategic decisions.


Our latest thinking


 

Our latest chartbook, Reflation vs. Stagflation: The great policy showdown, analyzes the persistent impact the pandemic is having on the economy.  The Delta speed bump is in the rearview, but businesses continue to report a shortage of workers and inflation has hit a multi-decade high. Will these price pressures be transitory? And if so, for how long? The answer to these questions is rooted in the relationship between high prices and wages, and whether pandemic-related factors will keep workers sidelined. Our analysis looks at:

How to identify periods of stagflation

  • Is it all about high prices, or are there other factors that create stagflation episodes?
  • There are reasons to be optimistic that history is not repeating itself, even if it seems to be rhyming.

Inflation Trends: Transitory or Tenacious

  • Recent inflationary pressures are likely transitory, but what does that mean? Is transitory a time period, or an economic state?

Labor Market: Whether inflation is transitory or tenacious depends on the labor market

  • The pandemic continues to impact participation in the labor market even as demand for workers remains high.
  • Wage pressures have emerged, particularly for lower-paid jobs. Will this lead to a wage price-spiral with workers demanding higher wages to offset rising costs, which would push prices even higher?

Housing Market: Will the pendulum swing back to trend

  •  The Great Reshuffle led to a surge in housing demand. Will it stay high in the face of high prices and materials shortages? 

Rising prices and a labor market that looks strong, will these factors force the Fed to raise rates?  Whether this plays out depends on the definition of transitory and whether workers re-enter the labor market. 

Download Reflation vs. Stagflation: The great policy showdown for our latest analysis of the current economic environment. 

 


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About our team

Constance L  Hunter

Constance L Hunter

Principal and Chief Economist, KPMG LLP

+1 212-954-3396
Kenneth Kim

Kenneth Kim

Senior Economist, KPMG US

+1 212-954-6144
Tim Mahedy

Tim Mahedy

Senior Director, Office of the Chief Economist, KPMG LLP

+1 415-963-5103
Henry T. Rubin

Henry T. Rubin

Sr Associate Research, Office of the Chief Economist, KPMG LLP

+1 212-954-2441