Powell/Economy

[tower912]

inflation was a major problem before Putin invaded Ukraine and the unemployment rate is very misleading because our labor participation and overall production isn't good.    I fear major job cuts in the relative near future.  And of course there are a plethora of foreign policy issues that are worrisome to put it mildly.  I think the world is as dangerous as  it's  been since pre WW2 and we need to get our heads out of our asses frankly.

Income inequality?  Agreed.
Rising fascism, including in America? agreed.
Desperate need to make painful sacrifices in order to protect our planet for future generations of humans and animals?  Agreed
There will be turbulent economic times ahead?   Agreed.

Do yourself a favor.  Step away from cable news and go get involved in something you are passionate about.   Channel that anxious energy into making a change where you are.

[MuggsyB]

Income inequality?  Agreed.
Rising fascism, including in America? agreed.
Desperate need to make painful sacrifices in order to protect our planet for future generations of humans and animals?  Agreed
There will be turbulent economic times ahead?   Agreed.

Do yourself a favor.  Step away from cable news and go get involved in something you are passionate about.   Channel that anxious energy into making a change where you are.

First of all I don't watch cable news.  I read the WSJ and look at articles in rearclearpolitics.  Secondly, what exactly is a semi-fascist which now seems to be a talking point and has now been exclaimed by the current press secretary and our president?  Is it even possible to be a "Semi-Fascist"?  That seems rather oxymoronic to me.  Lastly you are correct, this world and our country has enormous problems, but it's about whether our solutions/policies are making things better or worse?   I don't give a crap who you voted for or what political party you generally support.  This is about people hurting now and the terrible economic situation we're in presently. 

[Uncle Rico]

First of all I don't watch cable news.  I read the WSJ and look at articles in rearclearpolitics.  Secondly, what exactly is a semi-fascist which now seems to be a talking point and has now been exclaimed by the current press secretary and our president?  Is it even possible to be a "Semi-Fascist"?  That seems rather oxymoronic to me.  Lastly you are correct, this world and our country has enormous problems, but it's about whether our solutions/policies are making things better or worse?   I don't give a crap who you voted for or what political party you generally support.  This is about people hurting now and the terrible economic situation we're in presently.

I’m doing great economically. 

[ATL MU Warrior]

I’m doing great economically.

Me too. 

And, sorry to say, real clear politics is a wasteland. I’m sorry because I used to work and play basketball with one of the founders who was a great guy. Not sure any longer.

[Uncle Rico]

Me too. 

And, sorry to say, real clear politics is a wasteland. I’m sorry because I used to work and play basketball with one of the founders who was a great guy. Not sure any longer.

Economy goes up, economy goes down.  Good times, bad times, I’ve had my share

[MU82]

First of all I don't watch cable news.  I read the WSJ and look at articles in rearclearpolitics.  Secondly, what exactly is a semi-fascist which now seems to be a talking point and has now been exclaimed by the current press secretary and our president?  Is it even possible to be a "Semi-Fascist"?  That seems rather oxymoronic to me.  Lastly you are correct, this world and our country has enormous problems, but it's about whether our solutions/policies are making things better or worse?   I don't give a crap who you voted for or what political party you generally support.  This is about people hurting now and the terrible economic situation we're in presently.

“Terrible economy” is an opinion. Some economists would agree with your opinion, some would disagree.

People of one political party are motivated to repeat endlessly that the economy is “terrible”; those of the other party are motivated to say it isn’t.

[jesmu84]

Corporate/capitalist profiteering and supply disruption has screwed things up.

Congress refuses to act.

The only thing the fed can do is raise rates. Which will lead to elimination of jobs and hurting of the poor because crap rolls downhill.

There isn't a solution - if Congress won't act - that won't disproportionately impact the working class. And the owner class is totally okay with that because they won't be forced to continue to raise wages anymore due to a tight labor market.

[rocky_warrior]

Wow.  This thread is loaded.

I've been buying the market big in the last couple months.  Discounts abound.

edit:

The only thing the fed can do is raise rates. Which will lead to elimination of jobs and hurting of the poor because crap rolls downhill.

Yes, but the job market is still great.  I passed at least 5 signs today advertising $15/hr starting. Nobody willing to work right now is really "hurting" we're all just re-adjusting. I did squeeze a contractor on their rates today, they readjusted and now we're in agreement.  Everyone keeps their job!

[muwarrior69]

inflation was a major problem before Putin invaded Ukraine and the unemployment rate is very misleading because our labor participation and overall production isn't good.    I fear major job cuts in the relative near future.  And of course there are a plethora of foreign policy issues that are worrisome to put it mildly. I think the world is as dangerous as  it's  been since pre WW2 and we need to get our heads out of our asses frankly.

I was 16 during the Cuban missile crisis. That was the most dangerous period in my life time; but you are right these are dangerous times as this country is so divided.

[pbiflyer]

Dude, I can't take anyone who likes classic rock with a flute seriously. 

Yep, they’re thick as a brick. 

[jesmu84]

Wow.  This thread is loaded.

I've been buying the market big in the last couple months.  Discounts abound.

edit:
Yes, but the job market is still great.  I passed at least 5 signs today advertising $15/hr starting. Nobody willing to work right now is really "hurting" we're all just re-adjusting. I did squeeze a contractor on their rates today, they readjusted and now we're in agreement.  Everyone keeps their job!

One interesting thing I've seen lately... My Ally savings account was 2+% before the pandemic. It dropped to 0.5% early this spring. It's back up to 1.85% as of this week.

Seems like the free/cheap money is drying up.

[rocky_warrior]

Seems like the free/cheap money is drying up.

Fair enough.  I *think* we can all agree on that.  I also understand lots of us live in disparate parts of the country, where circumstances may be different.  At the same time, currently jobs that pay a living wage aren't hard to come by.  That could change quickly.

[MU Fan in Connecticut]

Corporate/capitalist profiteering and supply disruption has screwed things up.

Congress refuses to act.

The only thing the fed can do is raise rates. Which will lead to elimination of jobs and hurting of the poor because crap rolls downhill.

There isn't a solution - if Congress won't act - that won't disproportionately impact the working class. And the owner class is totally okay with that because they won't be forced to continue to raise wages anymore due to a tight labor market.

Saw a note yesterday that corporate profits are the highest they've been since 1950.

[tower912]

Going to see a lot of that in the short term.

[Lennys Tap]

“Terrible economy” is an opinion. Some economists would agree with your opinion, some would disagree.

People of one political party are motivated to repeat endlessly that the economy is “terrible”; those of the other party are motivated to say it isn’t.

We’ve had two consecutive quarters of negative growth. That’s a recession by definition, not opinion. We also have 40 year highs in inflation - also a fact, not an opinion. And rates will continue to rise per the Fed chief which will further stall the economy.

You can throw these facts into the “Economy Stew” and conclude that the economy currently is great, good, fair or poor and whether you like how it’s trending. That’s an opinion, and of course there’s no requirement that one’s opinion be an informed one.

[MU82]

We’ve had two consecutive quarters of negative growth. That’s a recession by definition, not opinion.informed one.

From Money magazine (and echoed by numerous other sources):

In many macroeconomics textbooks, a recession is defined as two consecutive quarters of negative growth in the GDP, according to Dawit Kebede, senior economist for the Credit Union National Association. That means, by the textbook definition, the U.S. is in a recession.

But the National Bureau of Economic Research, a nonprofit that is often looked to for business cycle tracking and the formal declaration of a recession's start and end, uses a more complex definition, considering many factors alongside GDP figures. These factors include real personal income less transfers, real personal consumption expenditures and household employment.

According to its website, "The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee's view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another."

Using the NBER's definition, some financial observers – Kebede included – say the current economic conditions don’t rise to the level of a recession. “We are not in a recession because the labor market is strong and consumption is strong,” he says.

In the latest data released by the BEA, personal income increased 0.6% in June while personal consumption expenditures, a measure of consumer spending, rose 1.1%. The current unemployment rate is 3.6%, according to the Bureau of Labor Statistics. During the recession that began in 2007, unemployment peaked at 10%.

“There are definitely a number of disconnects going on right now,” Hooper says, adding that current economic indicators are not all heading in the same direction, which makes interpreting the state of the economy more difficult.

So the outfit that officially declares if it's a recession or not hasn't done so, meaning right now it is just an opinion.

My opinion? I don't know, and I don't pretend to know. What I do know is if it is a recession, so far it's different from all others that have preceded it.

[NCMUFan]

Yep, they’re thick as a brick. 

To old to rock n roll and to young to die.
Life's a long song, but the tune ends to soon for us all.

[JWags85]

Saw a note yesterday that corporate profits are the highest they've been since 1950.

Which is a unique scenario.  Empirically, I know a couple companies, including my own, that had a fairly profitable 2021, but a pretty dreary YOY revenue.  Forced to cut costs, scale back R&D, reduced headcount as a result of the pandemic or market conditions and then were more conservative in rebuilding them, etc...

And thats not even considering countless companies who found ways to cut costs or services and blame them on the pandemic.

[jesmu84]

The Federal Open Market Committee's (FOMC) overarching focus right now is to bring inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them.

Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.

So, the Fed is going to try to force a (controlled) recession to increase unemployment. This will lead to folks not being able to afford good/services, which help with price stability.

Is that a fair interpretation of all this?

Is there a reason we appear to only be seeking labor-centric avenues to control inflation?

Powell himself says, above, that the burden of inflation falls on the lowest rung of the ladder the worst. So, can't we find another way to work on this problem?

[The Hippie Satan of Hyperbole]

So, the Fed is going to try to force a (controlled) recession to increase unemployment. This will lead to folks not being able to afford good/services, which help with price stability.

Is that a fair interpretation of all this?

Is there a reason we appear to only be seeking labor-centric avenues to control inflation?

Powell himself says, above, that the burden of inflation falls on the lowest rung of the ladder the worst. So, can't we find another way to work on this problem?

To cool inflation you need to lower demand. If you lower demand, the labor market resets. And that inevitably impacts the least skilled in the workforce.

In a consumer driven economy, I’m not sure what else you can do.

[jesmu84]

To cool inflation you need to lower demand. If you lower demand, the labor market resets. And that inevitably impacts the least skilled in the workforce.

In a consumer driven economy, I’m not sure what else you can do.

What about working on the supply side instead? Granted, the Fed can't really do that.

[The Hippie Satan of Hyperbole]

What about working on the supply side instead? Granted, the Fed can't really do that.

By doing what exactly?

[jesmu84]

By doing what exactly?

I'm unsure. Hence why I asked

[rocket surgeon]

if you want to get inflation under control, we've got to get our energy costs under control.  europe and great Britain are a mess while russia is laughing all the way to the bank.  europes energy costs are going nuts! the german people are scrambling for fire wood and the polish are standing in line for coal. they are punishing their own people mandating they curtail their own energy use with limitations on thermostat A/C settings to 27 degrees celsius (80 F)  i doubt the "leaders" are following their own rules-gasp!

      green energy is the path to poverty; it is unsustainable and not near ready to supply the worlds needs.  if we were serious about "climate change" the first thing they would outlaw would be private jets...cue in the laugh track

[TSmith34, Inc.]

Yes, you are so right. Renewable energy is called renewable because--it's not sustainable! So obvious, how did no one else see this?

Do you and ziggy have some sort of competition going on to see who can say the dumbest thing?