What is everyones guess? ADP and JOLT both were bad this week. Weekly jobless claims have been up some and so are continuing claims. The initial claims are not alarming yet as they show employers are doing their best to hold on to who they can. But the continuing claims is what is starting to flash a little. I think they set the bar high for expectations and so the report is likely to disappoint. I wouldn't be surprised to see the UE go up a tad to 4%.
We are at peak full employment and a year into ridiculously high interest rates. Would be insane if it doesnt pull back a bit. Rare to have major layoffs this close to Christmas though so I’d be surprised with any major shifts. https://www.reuters.com/markets/us/us-weekly-jobless-claims-increase-slightly-2023-12-07/
Ridiculously high interest rates? Compared to what? Are you familiar with long term interest rate history?
Depends. There are a lot of other flashes that we need to be worried about. I think the feds will need to lower rates starting in March. Well, considering my business, livelihood and those of my employees depend on a good economy, I would rather not see bad news. I don't get into the whole political party identity BS when it comes to this stuff.
Just for a point of reference: Federal Funds Effective Rate Almost every single time the feds have raised the rate at which they did the past year, we eventually entered a recession. History is not on our side. I still think there is a chance for a soft landing but that depends on how much and how soon they cut rates.
As the graph illustrates almost the entire time from 1969 to 2001 interest rates were comparable or higher than today’s rate. How one concludes a 5% interest rate with 3.5% inflation is ridiculous defies logic.
Yes and no. We didn’t experience 3.5% inflation. We had months over 8%. Right now it’s around 3.5% which is still above their target. That means prices continue to rise faster than they want despite rates where they are at.
It doesn’t negate my point. 5% rates with 3.5% inflation is not unreasonable. 6% with 3.5% would not be totally unreasonable. Apparently citi gator thinks we should have 2% rates with 3.5% inflation. That is unreasonable
The problem is wages didn’t keep up with inflation. So not only is everything more expensive than it was pre COVID, but now higher rates are making things even more expensive to buy. We all know Americans use credit like no one else lol. Credit card delinquency rate has sky rocketed to above pre Covid levels with no sign of slowing down. Auto loan delinquencies highest levels since the 1990s especially with subprime auto loans. Fortunately mortgage delinquencies remain very low thanks to most homeowners buying or refinancing into rates lower than 4%. 62% of mortgages are below 4%. It’s estimated only 10% of mortgages have a rate higher than 6%. This alone might be the one reason we have not seen a recession yet. I think the feds need to lower the federal rate soon or we risk a hard landing.
There are many charts out there. Infographic: Real Wages Rise Again as Wage Growth Outpaces Inflation Wages Are Finally Outpacing Inflation. Will Americans Ever Feel It? | Bankrate Unfortunately, wage growth is slowing as well but at least it's still above current inflation.
No matter how hard the right wingers on here pretend it's bad and root for a disaster, Biden's historic economic engine just cant be tamed. Look what happens when you get stable leadership in the white house.. Biden just presses that magic "jobs" button and flips the "low gas" lever under the desk and.. bam! It just happens. Amazing! Seriously though... there is are some good signs for this economy. The pull back from China and the adjustment our businesses have made for higher transportation costs and uncertainty has been good for America. Our economy heals stronger than it was after it gets gashed. Miracle of capitalism. The Eyepopping Factory Construction Boom in the US | Wolf Street
Not true. Real wages are flat to 2019. Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over Not true. 2.66% vs 2.98% isnt sky rocketing and its half what it was in the 90's and 2000's. It is trending up however. People paid a bunch down with their covid windfalls. Debt service ratios are at historic lows though so it isnt showing up as an increased burden. If it doesnt flatten and keeps rising you may have a point. Delinquency Rate on Credit Card Loans, All Commercial Banks The economy looks like it is very strong even if there seems to be some ups and downs in various sectors. The conventional wisdom has called for a recession for 2 straight years with this year being called at 100% for much of the year. Nope. I have no idea where the economy is going but it is currently healthy.
That is the problem right there!!! You make the argument simple!! Real wages are flat to 2019, inflation rate only 3-4%, but what about the increase in costs that happened from 2019 till today? Costs have a 15-20% increase in the 3–4-year period but wages are flat to before the increases. They are catching up but have a way to go before the average consumer feels the effect.
Hi Gatoragman. The term "real wages" means adjusted for inflation. So wages have increased as much as the cost of stuff since 2019. That is on average which doesnt mean everyone and everything, but generally people are as good off as they were in 2019.
