Bureau of Labor Statistics
ECB: "information of many macroeconomic announcements is known by some market participants in advance"
Translation: the market was and remains rigged
Unfortunately, the majority of analysts continue to put out increasingly worthless forecasts as they fail to understand the true nature of the problem... or rather, the predicament we are facing.
According to the National Bureau of Economic Research (NBER), the official recession arbiter, the US economy is currently at its fourth longest expansion in history. By the sheer nature of a capitalistic society with its inherent cyclicality it is a safe bet that a new economic recession will hit in the not too distant future. We have argued since June last year that the next recession is imminent and we now feel increasingly confident that our prediction will come true before November’s Presidential Election. Even mainstream forecasters seem to jump on the increasingly likely recession-bandwagon.
If nobody is working in one out of every five U.S. families, then how in the world can the unemployment rate be close to 5 percent as the Obama administration keeps insisting? The truth, of course, is that the U.S. economy is in far worse condition than we are being told.
The lesson to be learned here is that, while minimum wage laws are bad, uniform minimum wage laws imposed across dozens of diverse economies are much, much worse. Naturally, imposing minimum wages at the statewide level leads to the same problem, but on a slightly smaller scale. If politicians wanted to increase real wages, they'd instead focus on lowering the cost of living and increasing worker productivity.
Having surged to its highest since 2008 in February, Core CPI's YoY gain inched back from 2.3% to 2.2% YoY in March hovering at post-crisis highs. The food index declined in March, as did the cost of 'shelter' and medical care, but used cars and truck prices declined, as we noted previously.
For those of us who recall how the mainstream media, compromised pundits and Wall Street welfare babies “sold” us on the unconscionable banker bailouts, we vividly remember a constant repetition of the invented and preposterous mantra that “helping Wall Street in turn helps Main Street.” This fantastical idea that the fortunes of Wall Street and Main Street are inextricably linked is, of course, total garbage and always has been.
Over-supply plus a warm 2015-2016 winter have resulted in low gas prices. That is about to change because supply is decreasing.
What's a Couple Hundred Trillion Benjamins Between Friends?
"I think stagflation is starting to show - that idea of stronger nominal growth but weaker real growth is starting to show up across the economy. It certainly is showing up with real personal consumption slowing; it's showing with slower job creation growth as the wage rate rises, and it's showing up in weaker profits as the share of labor income rises reducing profit margins for corporations."
It may be almost impossible to underestimate the gullibility of professional Fed watchers. At least Lucy van Pelt needed to place an actual football on the ground to fool poor Charlie Brown. But in today’s high stakes game of Federal Reserve mind reading, the Fed doesn’t even have to make a halfway convincing bluff to make the markets look foolish.
The last thing the Fed can bear is for a recession that may be bubbling just under the surface to boil over into full view in the months heading into the election. If that occurs, we all may be seeing a great many press conferences from Mar-a-Lago. That is a development that I’m sure Janet Yellen wants to avoid at all costs.
Given that we all have to eat and that there are some concerning environmental developments out there, here’s an interesting question: has global warming led to higher or lower food prices (thus far)?
Janet Yellen is in a very difficult spot. If she continues to ignore the growing signs of recession, she runs the risk of letting one develop prior to the election. This would favor the Republican challenger who would be disinclined to reappoint her as Fed Chairwoman, if elected. Allowing the Greenspan bubble to bust on Bush’s watch sealed John McCain’s fate, allowing Obama to ride a wave of voter outrage into the White House in 2008. Yellen does not want Trump to catch a similar wave in 2016. As a result, we expect the Fed to soften its rhetoric in the very near future.
Seattle has experienced the largest 3 month job loss in its history last year, following the introduction of a $15 minimum wage. We can only imagine the impact such a change has had on the prospects of employment for the young and unskilled.