[tomder55]

Just to refresh your memory from the foggy days of the 70's . Stagflation is the combination of high inflation coupled with slow growth and rising unemployment. To combat inflation the Fed raises interests rates .But when they do that the intent is to slow down a hot economy. But if the economy is sluggish then raising interest rates becomes problematic.

We are not quite there yet .But we are well on the way. Economic growth this last quarter was slightly over 1 % But inflation is still at unacceptable levels according to the 2% target the Fed has set. The personal price index grew at a 4.2 percent Excluding food and energy, it rose 4.9 percent, the quickest in a year . The only thing that prevents a definite stagflation is unemployment numbers are still good . But as businesses tighten the belt ;that is likely to change.

The Fed has indicated it will raise rates in May. But then who knows ? They may pause; especially as the election cycle is entered into. Households are rapidly using up the pandemic gimmees . So we can expect consumer belt tightening . Higher interest rates have already increased mortgage rates and is cooling down the housing market.

[jlisenbe]

Whatsoever a man soweth...

[Jimgo]

Honestly, my belt been tight already with all those prices going up and up over last months. It feels like we are inches away from another economical disaster...

[tomder55]

Jim we are close to what they call a 'hard landing ' .

Hard Landing Definition (investopedia.com)

The Federal Reserve this week will most likely raise interest rates again in an attempt to slow inflation . It may have a nominal impact but will definitely slow the economy down, Then if the clowns in Washington can't agree on raising the debt ceiling to pay the countries debts then we will crash into a recession or worse.

I have no answers . For 20 years we have had a fiscally irresponsible nation (and even longer if you consider that reckless spending began in the 1960s )

[jlisenbe]

Tom, your reply seems to be right on target. And while liberal dems bear most of the blame, repubs had their big chance in Trump's first two years. Rather than reigning in irresponsible spending and moving towards a balanced budget, they stupidly chose to increase the deficit. Meanwhile, the average American couldn't care less. That could very well change soon.

[tomder55]

The French had a torture method where a board was placed on someone's chest and heavier and heavier stones were placed on the board until the person punished would be asphyxiated by the weight. It was called 'peine forte et dure'.

This is what our government is doing to the American people. The accumulated weight of the national debt is going to crush the country .

[tomder55]

Yesterday it was confirmed that we are in stagflation. Inflation is far from being tamed....in fact the rate of inflation after a short time of decline is again on the rise.... and the economy is dropping like a hot potato. Since there was growth it is not technically a recession yet. But GDP growth fell way below expectation.

“This was a worst of both worlds report – slower than expected growth, higher than expected inflation,” said David Donabedian, chief investment officer of CIBC Private Wealth US. “We are not far from all rate cuts being backed out of investor expectations. It forces [Fed Chair Jerome] Powell into a hawkish tone for next week’s [Federal Open Market Committee] meeting.”
The report comes with markets on edge about the state of monetary policy and when the Federal Reserve will start cutting its benchmark interest rate.

GDP Q1 2024: Economy increased at a 1.6% rate (cnbc.com)

Goodby rate cuts this year (The Fed promised up the 6 cuts this year ) .Goodby soft landing . It will take a recession to beat inflation. And the moron who runs the country doesn't help with policies of massive tax increases. He is letting tax cuts Trump gave us expire and wants to tax the bejezus out of capital gains .

Biden Signals Tax Hike If Re-Elected As Americans Struggle From His Inflation Crisis | The Daily Wire

That's a great campaign strategy !!!

[tomder55]

Need a job ? We're the government and we're here to help.

Yesterday we got April's job report. 175,000 new jobs were created ;less than expected ;which apparently is good news to the investor class. They think the Federal Reserve will start to reduce interest rates despite the fact that inflation is far from being tamed.

Of note ;more than half of the new jobs were government jobs or healthcare and social assistance .

Gains in government positions have recently boosted overall growth numbers, including a 51,000 gain in March and a 618,000 gain in the last year, according to the BLS. Despite the relatively small gain in April, the month marks the sixth in a row where the number of people employed by the government has hit a new record, totaling 23,271,000.

Gains in Government Jobs Couldn’t Save Biden’s Economy in April - Tennessee Star


The lie of the year

And guess what? The plan we put in place is beginning to work. We've created a record 15 million jobs since I came to office — (applause) — more than any president has — 15 million,

Remarks by President Biden on How His Investing in America Agenda is Rebuilding Infrastructure and Creating Good-Paying Jobs | Wilmington, NC | The White House


What really happened is that jobs lost during the covid lockdowns returned .



According to the BLS tracking jobs in 2020 ;

In April, employment plummeted, dropping by 20.7 million—the largest decline in the history of the CES employment series, which originated in 1939.

COVID-19 ends longest employment recovery and expansion in CES history, causing unprecedented job losses in 2020 : Monthly Labor Review: U.S. Bureau of Labor Statistics (bls.gov)

What new jobs that are created is largely being funded by the various monopoly equity injections to the states from stimulus .

He touts his investment in manufacturing . But only 20,000 new manufacturing jobs were created in the last year and only 8,000 in April .That compared to healthcare (765,000), government (618,000) and social assistance (257,000).

Deficit spending of $ 2 trillion /year is not sustainable ;especially if the bulk of the jobs it creates is service jobs.

[jlisenbe]

Deficit spending of $ 2 trillion /year is not sustainable

The understatement of the year.

He touts his investment in manufacturing . But only 20,000 new manufacturing jobs were created in the last year and only 8,000 in April .That compared to healthcare (765,000), government (618,000) and social assistance (257,000).

Lying, accompanied by gross exaggeration, has been the currency of the realm in politics forever, but this takes it to new heights.

[jlisenbe]

This is the kind of propaganda that works against us. The data is so flawed that it is ridiculous. They seem to be using figures for gross profit rather than for net profit. Even worse, corp profits were high under Trump and yet inflation was at a much lower level. The real kicker was the header that informed us that we could mistake rising prices for...inflation? I wonder what they think inflation measures?

[tomder55]

I'm guessing no one felt sorry for Exxon Mobile when in the height of the pandemic gas prices and profits plunged . Stimulus gimmies with monopoly money created a situation where demand grew at a time when the supply chain was damaged from covid and the Ukraine war . Facts don't matter