And just to add extra salt to the wounds of those who are fighting for $15, those corporate mega-chains are increasingly turning to a 21st-century option for ridding themselves of the low-wage worker problem once-and-for-all: automation.
As 2020 came to a brutal end, an unequal K-shaped recovery was interrupted as the pandemic raged on while the government belatedly enacted an incomplete stimulus/relief package.
Once again, it’s time to keep our keen eyes on the target — gold’s and silver’s long-term price appreciation.
With inflation on the rise (you decide whether it’s temporary or ongoing), keeping real interest rates ultra-low, these metals are poised for a ride to the moon and beyond.
Corporate America is shelling out higher wages to employees, and business executives expect to continue doing so.
According to its new quarterly survey released today by the National Association of Business Economists, a record high 58% say they increased pay at their companies during the 3rd quarter.
Just about the same number expects that trend to continue in the months ahead.
Inflation came in like a hot potato last month.
At 6.2% for all items, virtually no economist wants to touch it, politicians just want to play the blame game, and few everyday Americans see a silver lining.
There are always a ton of ways to slice and dice inflation, including what it actually is and the best way to measure it.
One measure of that is the latest JOLTS ratio, showing that for every job opening in September, there was significantly less than one person actually seeking a job.
The 0.7 job seekers available per job is an all-time low, with the exception of one month — April 2019 — when the stat hit 0.69. That’s according to the government’s Job Openings and Labor Turnover report, released last Friday.
Market bull Phil Orlando believes the Fed will raise interest rates six times over the next two years to reign in significant ongoing consumer price increases.
Last week he said, “…we will see two quarter-point rate hikes…in the second half of , and perhaps another four quarter-point rate hikes over the course of .”
In other words, Orlando and his firm, Fidelity Hermes, see the Fed Funds rate rising from its current 0% to 0.25% range to 1.75% to 2.0% two years from now.
Jerome Powell and his colleagues at the Fed are getting advice from a new generation of college students; maybe that’s a group they’ll listen to.
They’re telling them to speed up the tapering, enhance communications with the public and finish their study on digital currency.
For a few minutes every semester or two, the students act as Fed officials and compete to pitch staffers the best direction for the economy.
Never mind the Wall Streeters. Here’s a fresh look from the next generation policymakers.
The next official government release on inflation comes Friday, as a nation of number watchers try to figure out the mixed signals sent by last week’s confusing jobs report.
Americans of all ilk — from the White House, members of Congress and Federal Reserve policymakers to mega corporations, small businesses and everyday households — are focused on persistent price gains and how they’re impacting families and the economy.
A new poll is the latest sign that job numbers are pretty strong and the stock market may be at an all-time high.
Yet, Americans are overwhelmingly grading the economy by the price they see on the shelves.
Prices paid haven't always been the top indicator of choice. When YouGov asked the question in August 2020, 44% picked the unemployment rate compared to 25% who chose inflation.
Bottom line, in the latest Economist/You Gov poll, a majority of Americans (53%) say the economy is getting worse — one point lower than the highest level of the Biden presidency, last month.
The Fed is playing catchup, thanks to the ever-changing economy and pandemic.
That they’re in the role of the proverbial tortoise, in an existential race versus hare-raising inflation and stubbornly persistent unemployment, is a no-brainer.
The only question is, will the world’s largest and most advanced central bank recover to overtake events of great consequence — or will those economic trials and tribulations force a reckoning, namely:
Is the Federal Reserve still relevant?
The nation’s worker shortage “has become a flywheel of doom, messing up our lives and society writ large,” according to Emily Peck.
“And many of the underlying problems that led to this breakdown are bigger than the pandemic.”
Because of increased restrictions on immigration and travel that began with the pandemic in early 2020, the net inflow of immigrants into the U.S. has for all intents and purposes been in a 2-year hiatus.
The surprising pace of recent job growth may be catching recent headlines. But, as Neil Irwin points out, other details contain the biggest implications for markets in the months ahead; namely, wage growth.
The Fed’s favorite inflation metric—the one that has Jay Powell mostly smiling during his REM dreams—showed mounting price pressures in February, as the PCE continued lrising to its highest annualized level since 1983.
Including gas and groceries (broken out by the government ostensibly because of their higher volatility), the headline Personal Consumption Expenditures index (the source of Powell’s nocturnal smiles) jumped 6.4% year over year.
Excluding food and energy prices, the so-called “core” PCE increased 5.4% from the same period in 2021.
By the way, the only reason I continue to mention the core PCE—or the core CPI for that matter—is because some readers like to know what these government-reported, nuanced numbers are doing.
So, if they’re good enough for the Fed, they're good enough for me (yes, my tongue is planted firmly in my cheek).
Neil Irwin asks: “When does a report showing a booming job market cause recession alarm bells to start clanging?”
His answer: “When exceptional jobs growth leads bond investors to bet that the Fed will raise rates so aggressively to quash inflation that it will be forced to reverse course later.” That's what happened on Friday.
When the bond yield curve inverts, as it did Friday, it usually means a recession isn’t too far behind.
And although that's being a tad presumptuous at this point, it's clear the Fed is walking a narrowing tightrope.
The Labor Department’s March employment data was strong again, with 431,000 jobs added, positive revisions to January and February numbers and a slightly falling unemployment rate.
More Americans are rejoining the labor market, and wages are showing steady growth.
Just two weeks earlier, Fed chair Jerome Powell said that he sees a "very, very tight labor market, tight to an unhealthy level."
The new numbers, however, suggest it’s becoming even more so, especially around the government’s headline unemployment rate.
That means the jobs numbers amount to full speed ahead for more aggressive Fed tightening, including what looks likely to be the first half-percentage point rate hike in 22 years at the early May policy meeting.
That's why the jobs numbers caused an 8% jump in 2-year Treasury yields, to 2.46% from 2.28% heading into last weekend. Longer-term yields rose by less, with the 10-year ending the day at 2.38%.
When long-term rates are lower than their short-term counterparts, that's called an inversion or an inverted yield curve, to be more precise.
It’s like bond investors are betting that the Fed will end up reversing those near-term rate hikes down the road (i.e., lowering them…again), presumably because of a weakening economy.
Friday’s latest government jobs report shows two ongoing trends:
First, with employers adding 428,000 in April, the economic rebound from the brutal pandemic seems to be holding together.
And second, as shown in the chart above, the level of the job rebound since the early days of the pandemic continues to depend on what industry you work in.
On the one hand, April’s seasonally adjusted figures are virtually the same as March’s, according to the Labor Department, with the growth in jobs broad-based across every major industry.
More warehouse workers, fewer waiters. More health store employees, fewer in public schools. The overall job market is getting back to its pre-pandemic strength, but it looks a lot different.
Courtenay Brown writes that disruptions over the past two years have shaken up the composition of the labor force — “with big implications for how industries will have to adjust to a longer-term worker shortfall.”
Economist Ellen Gaske at PGIM Fixed Income says, "I'm not looking for recovery to pre-pandemic levels in each industry. Some workers have left for greener pastures, and that's a good thing.”
She added, "There is more opportunity for workers to return to new jobs — where the industries are growing and the outlook is potentially brighter. That churning is what offers up a possibility of stronger productivity gains and increased standard of living."
By Dave Allen for Discount Gold & Silver
On yesterday’s Financial Survival podcast/radio program, I observed that getting the price of oil down is really the whole ballgame when it comes to how, why and when the Federal Reserve plans to bring down inflation.
And if it doesn't go down – substantially – then the Fed will only go harder and faster on rate hikes to try to scale back demand – ill-advised as that may end up being.
Whatever the case, that level of unwarranted monetary tightening will mean markets further spiraling downward and sending the economy into a recession sooner – and possibly deeper – than we think.