Phillip's Curve Quit Working in 1971.
...Back in the good old days (when a countries imports were limited by it's gold reserves) when the USA employment shot up, inflation followed, and capacity utilization shot above 85!
Those days are gone and in it's place is a global Phillip's curve, global employment, and global capacity utilization rate, and global inflation rate. Added capacity in China counts as much as added capacity in the USA. Chinese workers moving into the cities add to the stock of potential employees as much as some one moving from a farm in Iowa to NY City.
Rather than looking a employment I focus on capacity utilization rate with 80+ being a signal for higher prices (currently at 76). Inflation really takes off at 85+, be we are so far from there it's silly to think we'll get there any time soon.
