While the heartbreaking human toll exacted by Hurricane Harvey is already all too clear, it will take some time to assess the macroeconomic impact. The labor market continues to bring more Americans off the sidelines and into productive employment, which is a very welcome development.
Nonetheless, there is a notable disconnect between signs that the economy is in the neighborhood of full employment and a string of lowerthan-projected inflation readings, especially since inflation has come in stubbornly below target for five years.