OH MY GOD!!! Inflation now at a 3.4% annual rate! Stock market meltdown, bond yields soaring!

You realize that it is May 3 and this is the original report of April numbers, right?

 

You gotta love it. If unemployment goes up, which is what we actually want if we want to lower inflation, they will scream about higher unemployment. If unemployment goes down, leading to higher inflation, they will scream about inflation. As long as they have something to scream about they're happy, I guess.

This was a really good jobs number. Not too high, not too low, and the markets are responding accordingly. NASDAQ up 2% right now.

 

Agree with you here, but you were in error earlier that Trump was responsible for more than half of the ridiculous spending since 2020. I’m not cutting him any slack; the second Covid stimulus was unnecessary and foolish. Even though it wasn’t passed until after the election, he still supported it.

I hope (but doubt) that people have learned to never allow governments to repeat 2020 again and shut economies down in a panic. Of those that haven’t learned, please know that all of this economic mess was unnecessary and will be with us for several more years.

 

Trump signed a bill for $2.3T in stimulus. Biden signed a bill for $1.9T in stimulus. That’s more than half.

 

Stimulus spending is not the only spending that drove this crap. I’m quite sure that you know this

 

Everyone wants a slowing economy. Up is down. Down is the new up.

Wall Street surges after economy adds just 175,000 jobs in April

• The job market has been expanding at a robust pace despite 11 rate hikes from the Federal Reserve meant to slow the economy. In March, the economy added a whopping 315,000 jobs, well above expectations of 205,000.
• Wall Street surged Friday on the new data, with the Dow soaring by more than 500 points at the opening bell before moving slightly lower mid-morning.
• After months of hot economic data, investors have been hoping for some sign of a slowdown in the economy, which would be a catalyst for the central bank to consider a rate cut sooner rather than later.
• Markets now expect the first cut to come in September, a change from recent bets on December.

 

Lending rates doubled in less than a year. Fed created this bonkers environment. Raising too late too much.

 

At $2.8 trillion, the FY 2021 budget deficit was the second largest in history—just short of the FY 2020 deficit of $3.1 trillion. Total spending was more in Trump’s last year than in Biden’s first. Trump is responsible for most of the spending that drove inflation. Period.

 

I’ll agree rates were tooooo low for toooooo long. Catch up and make up corrections can be painful.

 

You forget that small hiccup Pandemic thingy?

The feds probably were too slow to raise (as anyone “waiting for data” might tend to be). But the fed had to pivot wildly from a “normalizing” interest rate environment, straight back to ZIRP thanks to COVID, then a quick series of hikes. All while dealing with a bunch of shit that wasn’t truly interest rate related (Chinese Supply Chain, labor shortages). They didn’t do terribly, all things considered, esp compared to the rest of the world.

 

I am as critical as anyone on the fed. Rates are too high. They are going to miss the slowdown and put us in a bad place.. however.. they have actually guided the economy out better than anyone else and have it not too bad considering all the unknowns and craziness of covid. Maybe they’ll be lucky/good enough to do it right.

 

Again, I won’t defend Trump’s spending. You need to stop cherry picking. The 2021 fiscal year was almost 1/3 passed by the time Biden took office. By the time legislation was passed and checks started going out it was more than half way thru. The fact that are even close should tell you all you need. Why don’t you tell us about 2022 and 2023?

 

Absolutely correct. The problem politically is that a large segment of the electorate really doesn't care or alternatively is ignorant of all of the factors that caused inflation. As far as a majority of voters are concerned prices and especially food prices are considerably higher than they were in 2020 and that since Biden has been in office during the past three years the rise in prices must have been his fault.

 

Here’s a hint. The blue line (Inflation) has stalled above 3% and is rising again. The red line (GDP) has slowed significantly over last two quarters. And so, if/when the green line (unemployment) spikes, we have absolute confirmation of stagflation.

 

One of the elements of stagflation is high unemployment.

 

You realize that "Real GDP" growth is after already accounting for the inflation right?

 

I don't think you understand how it works. If unemployment goes up, inflation will come down. 'Stagflation' is just a term you guys are throwing around because it sounds really really bad. We are nowhere close to 'stagflation'.

 

Un

 

True... corrected

 

that is not true. there is no such mechanical relationship. The Phillips curve posits an inverse relationship, but there are certainly times where it does not hold & inf & UE are high.