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All the Economic News that Fits, or Gives You Fits

By May 1, 2024Commentary

One of the supposed bright spots of the economy has been the labor market, we just seem to keep churning out jobs, all of which, however seem to be part-time and going to illegal immigrants.  But there have been weird aspects to reports from the Bureau of Lying (Labor) Statistics for over a year, and sooner or later those inconsistencies have to be reconciled.  One monthly labor report is the Job Openings, Labor Turnover and Separations, or JOLTS.  The release today covers the month of March.  Now the data is based on surveys, which have a low response rate, but it showed a significant drop in job openings, over 300,000 from February’s level, well below expectations.  And of course openings would have fallen even farther except that government keeps bulking up.   There were big declines in finance and insurance and construction.

The number of people quitting also declined significantly compared to last month, an indicator that people are less confident they can find a new job if they leave their current one.  Hires dropped by 280,000 compared to the prior month, and the number of layoffs or fires was said to be unchanged, which seems odd given the constant news reports of large companies cutting a lot of positions and/or workers.  (BLS Report)   (ZH Post)

Beyond the JOLTS report, we also learned that the Federal Reserve is nervous about inflation, but did take steps to try to increase liquidity and boost the stock market, although they wouldn’t describe it that way.  The Fed has a habit of being manipulative in ways that benefit the administration in power in an election year.  It should be banned from buying or selling securities at any time, that should be left to the private market, but it is particularly heinous for it to do that when an election is pending.  And manufacturing surveys show increasing prices but declining orders, a perfect description of stagflation.  But don’t worry, Bidementia will reassure us all that the economy is just great, or whatever the teleprompter tells him to say, pause.

The underpinning to all the economic stress is excessive federal spending and debt, the pernicious effects of which can no longer be papered over by the Federal Reserve or anyone else.  People are only willing to hold short-term debt with high interest rates, they know inflation can’t go down.  And the Federal government soon will be paying not $1 trillion a year in interest, but $2 trillion.  It is pointless to keep issuing massive amounts of short-term debt that has to be rolled-over in the near future, in the vain hope that somehow rates will be lower then, even though the feds have multi-trillion dollar deficits every single year.  We need to cut spending and get to a surplus now, right now.  If Argentina can do it, we should be able to.

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