Tthe biggest problem, which no one likes to talk about, is debt...from the gov down to the consumer.
$1.7t deficit adding to over $34T in US natl debt, up over 50% or $12T since FYE19.
Consumer credit card debt over $1T and climbing, with interest rates over 20%
OK, the economy is "strong" because people are "consuming"...but our finances suck.
One thing you often hear is that wage growth hasnt kept pace with inflation...took a quick look, and if you compare real earnings as of Feb 2020 and Nov 2023, real earnings are essentially flat (up about 60 bps).
Real hourly/weekly earnings were $11.01/$378.73 in Feb 2020 and $11.07/$380.96 in Nov 2023, per BLS.
I remember them spiking few years ago, and the majority of people in India had to suffer from hunger, due to rice being traded on Wall Street. Similar to wheat prices which helped causing the 'Arab Spring' in Egypt.
When will those Wolves of Wall Street finally be decapitated?
I guess, only another Trump could do this. And, of course, everyone of us on our own small scale, if only we cared enough to think and act, beyond our private doorstep.
The strength of the US economy and a few other economies heading into late 2023 have surprised a lot of observers.
That said, a US recession looks increasingly inevitable at this point. Hopefully inflation gets truly knocked back. Food inflation has been particularly brutal for the poor and low-income workers.
Recession start date? Hard to say. The US economy could already be in a recession. Or the US recession will start sometime between now and May 2024. With the complexity of the NBER dating system, we won't know for many months after the fact.
The current or impending recession should be relatively short and shallow. The downside risk consists of higher for longer real borrowing costs. Both the proxy war in Ukraine and the recent flare up in the former Palestinian Mandate contribute to higher real capital costs. Directly and indirectly. Among other factors, looks like there might an increase of ~$1.50 in the security premium built into the benchmark prices of oil. How that evolves and how long that last depends. Higher priced oil could nudge the Federal Reserve to once again raise overnight rates in November.
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Saw a rumour the other day that Paul Krugman was being considered for Chair of the Federal Reserve. That would be a gigantic mistake in my opinion and would certainly contribute to higher real borrowing costs for longer were that to materialize.
Bright side? Low-risk fixed income assets are offering much higher yields than they have in several decades. Great news for risk averse retirees.
Participation rate peaked about 20 ya and fell to about 63% after the Great Recession… in part due to retirement, to take care of families, off the grid gigs, lifestyle changes (I know many millennials who take a year or two off before returning to work)… and maybe a few for the reasons you imply… but I doubt it moved the needle.
Participation rate peaked about 20 ya and fell to about 63% after the Great Recession⦠in part due to retirement, to take care of families, off the grid gigs, lifestyle changes (I know many millennials who take a year or two off before returning to work)⦠and maybe a few for the reasons you imply⦠but I doubt it moved the needle.
I wonder if anyone tracks unfilled job openings. Not sure there is a good way to do it but it would be interesting to see the demand for workers
JOLTS Report showed 9.6m openings, compared to about 6.4m unemployed...but gets a little tricky when you get into marginally attached etc. https://www.bls.gov/jlt/ Lots of "good" news, but also lots to be cautious about dwindling savings, rising debt and delinquencies, fading stimulus, declining housing affordability, labor strikes, D.C.... Surge in yields has been the big story. Initially started over the summer when the good news was a recession seemed less likely...now indicates we are in for a longer period of high rates and volatile pricing. The Goldilocks era of low rates and inflation is over.
JOLTS Report showed 9.6m openings, compared to about 6.4m unemployed...but gets a little tricky when you get into marginally attached etc. https://www.bls.gov/jlt/
Lots of "good" news, but also lots to be cautious about dwindling savings, rising debt and delinquencies, fading stimulus, declining housing affordability, labor strikes, D.C....
Surge in yields has been the big story. Initially started over the summer when the good news was a recession seemed less likely...now indicates we are in for a longer period of high rates and volatile pricing. The Goldilocks era of low rates and inflation is over.
i send kids over to the bls site to look at the career outlook
I wonder if anyone tracks unfilled job openings. Not sure there is a good way to do it but it would be interesting to see the demand for workers
JOLTS Report showed 9.6m openings, compared to about 6.4m unemployed...but gets a little tricky when you get into marginally attached etc. https://www.bls.gov/jlt/
Lots of "good" news, but also lots to be cautious about dwindling savings, rising debt and delinquencies, fading stimulus, declining housing affordability, labor strikes, D.C....
Surge in yields has been the big story. Initially started over the summer when the good news was a recession seemed less likely...now indicates we are in for a longer period of high rates and volatile pricing. The Goldilocks era of low rates and inflation is over.
Inflation is a complex...a product of multiple events. And yes, it is silly to say that Joe caused it all, within 18 months of being president.
Other issues obviously include years of the Fed's easy $ policies, $T stimulus under both admins, the tax cut, wage (including min wage) hikes, and of course the Ukraine war.
Yes, yes, and yes! Side note: I understand that Corporate Egg Producers profits have risen 40%, yet have no reports of avian flu.
I know it's pretty easy/popular to blame Biden for inflation, but here is a direct line to the last administration on part of the very complicated answer to what has caused the dramatic increases in everything, including food.
With inflation continuing to skyrocket, especially for food, which reached 10.4 percent in June, it is worth examining how the ongoing U.S. trade war with China and U.S. tariff policy overall has impacted U.S. agriculture and food prices. The economic literature shows that the U.S. import tariffs and subsequent retaliatory tariffs imposed by China and other countries on U.S. agricultural exports have hurt the U.S. agricultural industry and could impact future production, further raising food prices.
Tariffs generally raise consumer prices, and while thatâs true of export tariffs too, the mechanism operates a bit differently. Limitations on exports, whether through tariffs or explicit export bans, often produce an excess in goods. If firms are unable to sell their products to the world, they must sell more of them domestically. The surplus lowers prices in the short run. But when firms invest in producing food, a highly volatile commodity, they invest based on what return they think they will be likely to earn in the future. If their access to a foreign market is limited due to another countryâs tariff policies, their profits will fall and they will invest less in future production, which would lead to higher prices in the long run.
In response to the U.S. imposition of tariffs by the Trump administration on Chinese imports, China responded with several waves of tariffs on U.S. exports to China, with tariff rates ranging from 2.5 percent to 25 percent. As China represents the U.S.âs largest agricultural export market, a large percentage of agricultural goods, including soybean and pork exports, faced tariffs. Other countries also retaliated against the U.S. for imposing Section 232 tariffs on steel and aluminum. Across all retaliatory tariffs, $30 billion in agricultural products were targeted, or about 22 percent of all retaliated goods.
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Inflation is a complex...a product of multiple events. And yes, it is silly to say that Joe caused it all, within 18 months of being president.
Other issues obviously include years of the Fed's easy $ policies, $T stimulus under both admins, the tax cut, wage (including min wage) hikes, and of course the Ukraine war.
