Peak Fantasy Time

If you want to know why both Wall Street and Washington are so delusional about America’s baleful economic predicament, just consider this morsel from today’s Wall Street Journal on the purportedly awesome November jobs report.
Wages rose just 2.5% from a year earlier in November – near the same lackluster pace maintained since late 2015, despite a much lower unemployment rate. But in a positive signfor Americans’ incomes, the average work week increased by about 6 minutes to 34.5 hours in November…. November marked the 86th straight month employers added to payrolls.
Six whole minutes added to a work week that has been shrinking for decades owing to the relentlessly deteriorating quality mix of the “jobs” counted by the BLS establishment survey. In fact, even by that dubious measure, the work week is still shorter than it was at the December 2007 pre-crisis peak (33.8) and well below its 2000 peak level.
The reason isn’t hard to figure: The US economy is generating fewer and fewer goods producing jobs where the work week averages 40.5 hours and weekly pay equates to $58,400 annually and far more bar, hotel and restaurant jobs, where the work week averages just 26.1 hours and weekly pay equates to only $21,000 annually.

This post was published at David Stockmans Contra Corner on Friday, December 8th, 2017.

Why Wall Street Should Be Viewed as a Major National Threat

The day before the 4th of July, when most Americans were hustling about preparing for family barbecues, the New York Times finally decided to publish an editorial warning about Wall Street’s potential threat to the nation. Unfortunately, it did so with the kind of timidity we see regularly from cowed or compromised Wall Street banking regulators. The editorial writers noted that: ‘It’s entirely possible that the system is more fragile than the Fed’s stress tests indicate,’ and they called for ‘heightened vigilance of derivatives in particular’ without providing any detailed data.
A more accurate assessment of the situation would have been this: There is only one industry in the United States that has twice in a period of less than 100 years brought about a devastating economic crisis in the country. Wild speculation coupled with poor regulation of mega Wall Street banks brought about the Great Depression in the 1930s, leading to massive job losses, bank failures, poverty and economic misery for tens of millions of innocent Americans. The precise same combination of wild speculation and crony regulators created the Wall Street crash of 2008, throwing millions of Americans into unemployment and foreclosure while creating obscene bailouts and bonuses for bankers, and leaving the U. S. with such a low economic growth rate to this day that many Americans feel they are still living in the Great Recession.

This post was published at Wall Street On Parade on July 5, 2017.

TURKEY: Reverse Regime Change, Replacing Secularism with Sultanism

Since 2002, the Republic of Turkey has been ruled by the Justice and Development Party (or AKP), founded Recep Tayyip Erdoan and other prominent figures hailing from Necmettin Erbakan’s Welfare Party (or Refah Partisi, better known under the acronym RP) that had made Islamist politics mainstream in 1990′s Turkey.
At first, Erdoan and his henchmen appeared to respect the rule of law and the political traditions established by Mustafa Kemal Atatrk (1881-1938) and his followers (colloquially known as Kemalists, adhering to the ideology of Kemalism). The economic boom of the early AKP years and the concomitant political clout have allowed AKP-led Turkey to go down a post-Kemalist path into distinctly Muslim waters where authoritarianism and Ottoman nostalgia have managed to seduce the bulk of the Turkish population.
In reality, the economic boom overseen by the AKP was nothing but a mirage, after all, largely financed by borrowed money and extreme privatization – ‘a flood of near zero-interest foreign capital.’ At present, the Turkish economy appears to be in the doldrums, with unemployment currently at 11.8%, the highest level reached since March 2010 according to the Turkish Statistical Institute (or TK in acronymized Turkish).
The well-respected Turkish economist Taner Berksoy, for example, opines that the Turkish economy will experience a major downturn this year, in spite of the government’s encouragement packages, citing internal political instability as well as geopolitical risks, including Syria’s not-so civil war next door, and a general slowing down of the global economy.

This post was published at 21st Century Wire on MARCH 5, 2017.

Brazil Retail Sales Collapse as Inflation and Unemployment Whack Consumers

A very inconvenient connection.
Brazil is in the middle of a political and corruption crisis blooming on the verdant pastures of an economic and fiscal crisis that has now produced a second year of recession in a row, with the financial curse of the Olympics still hanging over the country for years to come.
Nearly 12 million people were counted as unemployed in December. The number of employed fell to 90.4 million, from 92.1 million a year earlier. The unemployment rate has steadily climbed to reach 12% in December, up from 6.5% in December two years earlier (via Trading Economics):

This post was published at Wolf Street by Wolf Richter ‘ Feb 14, 2017.

The Obama Legacy: ‘Crippling Debt, Massive Unemployment, Welfare-based Society, Deteriorated Infrastructure, Massive Inflation, And A Worthless Fiat Currency’

Rapacity performed by an outgoing Democratic president is intentionally downplayed or simply ignored by the mainstream media. We saw such unbridled rapacity in the atavistic way the Clintons left the White House when they departed in 2000. They stole and/or vandalized furniture and furnishings of the White House and left it in a deplorable state. From a perspective of his official actions, Bill Clinton did things such as pardon Tommy Rich and closed a few loopholes to ensure his Clinton Foundation deals did not fall apart after he surrendered the Oval Office.
The Obamas are not following suit in the manner of the Clintons with pillaging the White House for three reasons. Firstly, although he committed dozens of offenses that would have merited it, Obama was not impeached, whereas Clinton was. For those who may hold askance with the conditions of impeachment for Obama, let us remember that under the parameters of the National Defense Authorization Act and the tenets of more than half a dozen overlapping executive orders, the United States (and the world) were ‘redefined’ as a ‘battlefield’ in the war on terror. The emergency status has never been lifted: that status was affirmed and inculcated under the Bush administration shortly after 9/11 that categorized us as being in a state of war (against terrorism) and a continuous state of emergency.
Under such ‘wartime’ conditions, the words of Obama in 2012 were clearly treasonous and constituted an impeachable offense.

This post was published at shtfplan on December 30th, 2016.

What Is Quitaly?

First there was Grexit, followed by Brexit, and now there’s Quitaly. What is Quitaly? It’s Italy’s referendum that could decide if the struggling country will change its constitution.
Today’s (Sunday) Quitaly vote for constitutional reform is deemed by many as the most significant European political event of 2016.
Behind today’s vote is Italy’s floundering economy. Over the last two decades, Italy has seen virtually no growth and sky-high unemployment. Plus, Italian goods have become less and less competitive in export markets.
Italy’s Prime Minister Matteo Renzi has campaigned for a ‘yes’ vote in today’s voting, which he says will make governing easier in the country.
Reforms being voted on today would remove some of the Senate’s power. That means proposed laws would only need approval from the lower house of parliament. Under the current system, both houses must approve laws.
In a bold move, Renzi is putting his political fate on the line. He has said he would leave office if the ‘yes’ vote loses.
Lobbying for ‘no’ is the populist party Five Star Movement (5SM). The 5SM’s goal is to block reforms that would streamline Italy’s public administration and leave the current checks required in place.

This post was published at Wall Street Examiner on December 4, 2016.

Monetary Pollution

Some climate scientists, concerned with the warming impact of rising levels of carbon dioxide and other greenhouse gases in the atmosphere, have proposed that to keep temperatures cool what is needed is more pollution. More specifically, they suggest that more particulate pollution in the upper reaches of the atmosphere would reflect the sun’s radiation back into space and thereby have a cooling effect, as has been demonstrated in the past when large volcanic eruptions have led to years without summers. In a similar way, policymakers across much of the developed world, concerned about rising inequality, are recommending the introduction of a guaranteed minimum income. However, just as it appears senseless to send soot into the air to correct the atmospheric damage wrought by over a hundred years of fossil fuel burning, so too is it senseless to expect easy money for the poor to correct the damage caused by over 30 years of easy money for the banking system and the rich. The creation of money by central banks and the banking system has predictable consequences. As the economic thinker Henry Hazlitt wrote in his 1965 book, ‘What You Should Know about Inflation’ (keeping in mind that for Hazlitt, inflation refers not to an increase in prices but rather to an increase in the quantity of money): ‘Inflation makes it possible for some people to get rich by speculation and windfall instead of by hard work. It rewards gambling and penalizes thrift. It conceals and encourages waste and inefficiency in production. It finally tends to demoralize the whole community. It promotes speculation, gambling, squandering, luxury, envy, resentment, discontent, corruption, crime, and increasing drift toward more intervention which may end in dictatorship.’ From the early 1970s onwards, the ability of central banks and the banking system to create money from nothing has distorted the incentives upon which healthy market economies depend. While the reasons for expanding the quantity of money in circulation always seem benign, be they ‘to avoid a financial crisis’ or ‘to reduce unemployment’ the truth is that every dollar so created increases inequality while simultaneously sapping productivity.

This post was published at Mises Canada on OCTOBER 19, 2016.

Trade deals – a global issue

The annual Conservative Party conference commenced last Sunday, and the media focus was mostly about the Government’s stance on Brexit.
This is hardly surprising, because Mrs May is being secretive, avoiding stoking a public spat with the EU by negotiating in public. The only hard news to emerge was that Article 50, formally giving notice of Britain leaving the EU, would be triggered by the end of March, in other words before the end of this tax year.
Brexit is mostly about trade deals, which is why big business is lobbying furiously, and EU functionaries are winding up their punitive rhetoric. In the US, Donald Trump has also wound up the rhetoric over trade, threatening to tear up NAFTA and refuse to ratify the trans-Pacific partnership. He also attacked China, accusing her of stealing American production and jobs. We should never believe anything a politician says on the stump to gain votes, but if nothing else Trump does seem to have identified electoral resentment on the trade issue.
This article looks at the theory behind trade, and finds that free trade, not the promotion of vested interests, should be the clear economic objective. But it also concludes that differing approaches to this thorny subject could accentuate the split between world trade into two separate streams, between fast-growing emerging economies and an increasingly sluggish old order.
Corn laws and Smoot-Hawley
Free trade first became a political issue in Britain when the 1815 Importation Act, which imposed tariffs on imported grain, led to artificially high grain prices, benefiting landlords at the expense of the poor. This was repealed by the Importation Act 1846. These Acts were known as the corn law and its repeal respectively.
The debate prior to the 1815 Act is echoed today, with producers always seeking to disadvantage foreign competition to the detriment of the consumer. However, there’s every reason to believe that the abolition of trade barriers and tariffs would be similarly beneficial to contemporary economies as the Importation Act 1846 was to both Britain and the global economy then. Equally, if this is true, then trade restrictions and tariffs hinder economic progress, and any country embarking on greater trade restrictions is therefore pursuing a deliberate policy of unemployment. For evidence that it is indeed true, we need look no further than the catastrophic introduction of the Smoot-Hawley Act of 1930 in the US.

This post was published at GoldMoney on OCTOBER 06, 2016.

The Effects Of Money On Trade

There can be little doubt now outside of orthodox economics that the global economy is actually slowing, not accelerating as has been predicted. Economists themselves, however, continue to claim that things are getting better when the data strongly suggests otherwise. The latest depressing figures are from a pair of (orthodox) supranational organizations. First, the World Trade Organization (WTO) drastically reduced its estimates for trade growth this year, cutting them sharply from just a few months ago.
The World Trade Organization cut its forecast for global trade growth this year by more than a third on Tuesday, reflecting a slowdown in China and falling levels of imports into the United States.
The new figure of 1.7 percent, down from the WTO’s previous estimate of 2.8 percent in April, marked the first time in 15 years that international commerce was expected to lag the growth of the world economy, the trade body said.
While it will come as a shock to Janet Yellen’s public face, the WTO specifically cited both of the world’s biggest two economies and not just China as the unrelated ‘overseas’ (from the US perspective) problem. For all the reliance upon the unemployment rate here, there is a shocking disconnect in how supposedly rapid and sustained job growth just hasn’t translated into economic gains accrued anywhere. For an economy at ‘full employment’, there just isn’t any ‘demand’ growth, a fact being felt and described in grim detail especially overseas.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ September 27, 2016.

Red Ponzi Keeps Sinking – -Despite Beijing’s Desperate Efforts To Goose State-Owned Enterprizes

The US is not alone in its corporate profit slump. In China, profits at State-Owned Enterprises fell a further 6.5% year-over-year in the January to July period. Estimated to have been RMB 1.31 trillion (about $195 billion), SOE profits are being dragged down by those firms under control of the central government. Locally-administered SOE’s showed net income declining by only 0.3% in the period, whereas the larger, central SOE’s reported a 9% contraction Y/Y.
These results aren’t surprising given China’s economic condition, an unending slowdown now dragging into its fifth year. But more than that, this state-structured economic framework is being used once more this year to try to help cushion the blow from the lack of demand that once drove its vast industrial/export engine. Some economists continue to believe that the country is transitioning to an internal, consumer-oriented ‘model’ but the economic results and the pressure that central authorities are putting on especially SOE’s and the overall state-administered sector suggest otherwise.
China is an industrial economy and will sink or float based on global demand for its products. Contrary to economists here (or anywhere, really), the Chinese know very well that Janet Yellen’s economy is a myth, a figment conjured by parsing an often intentionally incomplete economic account (the unemployment rate and ‘professional forecasters’). Despite the profit pains, the Chinese government has been pushing the state sector to invest where the private sector now openly refuses.
This is a huge problem and again it belies the notion that it is simply an economy in transition. The government’s state-run news site, China Daily, is very explicit about what is now China’s growing investment problem.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ September 13, 2016.

The Percentage Of Working Age Men That Do Not Have A Job Is Similar To The Great Depression

Why are so many men in their prime working years unemployed? The Obama administration would have us believe that unemployment is low in this country, but that is not true at all. In fact, one author quoted by NPR says that ‘it’s kind of worse than it was in the depression in 1940′. Most Americans don’t realize this, but more men from ages 25 to 54 are ‘inactive’ right now than was the case during the last recession. We have millions upon millions of strong young men just sitting around doing nothing. They aren’t employed and they aren’t considered to be looking for employment either, and so they don’t show up in the official unemployment numbers. But they don’t have jobs, and nothing the Obama administration does can eliminate that fact.
According to NPR, ‘nearly 100 percent of men between the ages of 25 and 54 worked’ in the 1960s.
In those days, just about any dependable, hard working American man could get hired almost immediately. The economy was growing and the demand for labor was seemingly insatiable.
But today, one out of every six men in their prime working years does not have a job…
In a recent report, President Obama’s Council of Economic Advisers said 83 percent of men in the prime working ages of 25-54 who were not in the labor force had not worked in the previous year. So, essentially, 10 million men are missing from the workforce.
‘One in six prime-age guys has no job; it’s kind of worse than it was in the depression in 1940,’ says Nicholas Eberstadt, an economic and demographic researcher at American Enterprise Institute who wrote the book Men Without Work: America’s Invisible Crisis. He says these men aren’t even counted among the jobless, because they aren’t seeking work.

This post was published at The Economic Collapse Blog on September 7th, 2016.

The Real Economy: What The Interest Rate Fallacy Truly Means

Just a little over a year ago, the Institute for Supply Management (ISM) released its purchasing manager index for the services sector for August 2015. Though the level was down slightly from July, coming amidst the immediate aftermath of the ‘shocking’ financial quakes starting in China and spreading to markets all over the world, the 59.0 non-manufacturing PMI was welcome relief. In the mainstream narrative where the unemployment rate was meaningful, any positive indication about the services economy allowed economists and policymakers to assert that any weakness was either temporary or isolated.
When oil prices first dropped starting in late 2014, the narrative was far more the former (‘transitory’). By August last year, when financial markets far beyond WTI were drawn inward into the ‘unexpected’ maelstrom, the narrative changed to admit that weakness might be a problem but only for manufacturing. In writing about the ISM Non-manufacturing PMI for August 2015 the Wall Street Journal assured us:

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ September 6, 2016.

Why A Crisis Is Coming – – Two Charts Which Explain It All

The great ‘science’ of economics once discovered an empirical relationship between GDP and unemployment that has been dubbed Okun’s Law. It simply states that the unemployment rate rises as GDP contracts, or vice versa, as production shrinks less people will be employed. It is not exactly rocket science.
However, this made us think about another relationship we have observed lately. US government real tax receipts have been trending downwards while employment has kept up remarkably well. If we draw a chart of US withholding taxes (smoothed from all the short-term noise) and overlay that with employment growth, we find a worrisome divergence that has historically not been the

This post was published at David Stockmans Contra Corner by Eugen Von Bohm-Bawerk ‘ September 3, 2016.

Brazil Formally Impeaches Dilma Rousseff In 61 To 20 Vote

As was widely expected, the final step of Brazil’s historic impeachment process of former president Dilma Rousseff, concluded moments ago with a decision to formally impeach the former president, with 61 senators voting for her ouster, and 20 voting against.
Dilma Rousseff thus becomes the second president to be impeached in Brazil’s 31-year-old democracy, after 13 years of her party’s leftist rule, paving the way for what the market hopes is a fundamental shift in economic policy.
Rouseff was previously charged for breaking the country’s budget laws. As a result, the just as unpopular Michel Temer is set to become Brazil’s official president until 2018. Behind the narrow allegations of breaking budget laws, what led a majority of Brazilians to back impeachment was a sense that Rousseff mismanaged the economy and was lenient on rampant corruption.
As Bloomberg reports, the decision caps a tumultuous period that began after Rousseff’s narrow re-election victory in 2014 and exacerbated the worst recession in decades.
The second impeachment since Fernando Collor was ousted in 1992 has been a traumatic experience for this young democracy, coming on top of a two-year corruption scandal and unemployment at its highest in over a decade. With his mandate as Brazil’s leader confirmed, Temer hopes he can now push more forcefully to put the economy back on track, a challenge that includes unpopular austerity measures.

This post was published at Zero Hedge on Aug 31, 2016.

Mission Impossible Looms for Renzi’s Italian Growth Target

The odds are stacked against Matteo Renzi’s economic ambitions for Italy.
The prime minister needs to see a blistering pace in the second half of this year to meet his goal of a 1.2 percent expansion in 2016. Economists say that’s not happening, spelling trouble for Renzi and the wider euro area.
With Renzi facing a referendum in the autumn that could decide his political future, a stagnant economy and banks hobbled by bad debt are adding to his challenges. While cheaper oil, a weaker euro and unprecedented European Central Bank stimulus helped the Italian economy emerge last year from its longest recession since World War II, that can only take the recovery so far.
‘Italy’s potential growth rate is, as of today, still zero if not slightly negative,’ said Raffaella Tenconi, a London-based economist at Wood & Co. ‘Companies are still too indebted, profitability in the aggregate is very low and the economy overall is in a particularly challenging position having no fiscal or monetary-policy independence.’
Renzi’s government so far is standing by the 2016 growth projection it made in April, despite an economy that stalled in the three months through June. A constitutional reform referendum expected in November is rapidly turning into a test of the 41-year-old premier’s popularity, with unemployment that unexpectedly rose to 11.6 percent in June and a banking crisis that rattled investors large and small. Renzi has said he would quit if he loses the vote.

This post was published at David Stockmans Contra Corner By Lorenzo Totaro, Bloomberg Business ‘ August 22, 2016.

The Red Ponzi Is All About Fixed Asset Investment – -And China’s Private FAI Is Now Contracting Y/Y

Economists setting their expectations for China and PBOC ‘stimulus’ should have been paying attention to retail sales; not Chinese retail sales, butAmerican. They keep seeing a rebound that just doesn’t exist. US consumers, as the central marginal marketplace for the world economy of goods, have steadfastly refused the invitation of the unemployment rate to produce a worldwide economic resurgence. While mainstream expectations are set as if US labor market data is meaningful for that future, everything about current spending and production (globally) shows them devoid of any significance at any time.
In mid-April this year, for example, Chinese industrial production for March was figured to have accelerated to 6.8%. The level of growth wasn’t the reason for enthusiasm, as nearly 7% is itself unusually low for China. Instead, what got economists excited was how favorably it compared to the alarmingly low 5.4% despair of February. Rather than seeing the US economy for what it was and has been, and thus what the Chinese economy actually was and is, deference remained strong for orthodox policies despite what they had not achieved anywhere.
Friday’s growth report revealed China’s aggressive monetary stimulus was finally bearing fruit, Jing Ulrich, managing director and vice chairman for Asia Pacific at JPMorgan Chase, told CNBC’s ‘Street Signs.’
‘Data from the investment-industry nexus show that the tried-and-tested stimulus measures of recent months have stirred up the physical part of the economy, especially towards the end of Q1, while consumption remained relatively robust,’ Louis Kuijs, head of Asia economics at Oxford Economics, echoed in a note.

This post was published at David Stockmans Contra Corner on August 12, 2016.

Why Wages Aren’t Rising – – There Is Still Immense Slack In The Labor Market

Basic economics has proven that when the supply of something dwindles, absent an offsetting drop in demand the price should rise. When translating these fundamental terms to the labor market especially of the past few years, the supply means ‘slack’ or the available pool of workers not yet working; demand has been, we are told repeatedly, very robust; therefore the price of labor, the hourly wage rate, should be rising and rapidly so if only to match the rhetoric (‘best jobs market in decades’).
Monetary policy is already at a great disadvantage because its core philosophy seeks to discourage rapid growth in wages. Figuring that wage inflation leads to actual inflation, central banks believe they must act to control it even though, as noted above, it’s basic economics that shows and truly delivers the best basic economy. This policy handicap isn’t one-sided, however, as this ‘recovery’ has proven beyond any doubt. In other words, central banks have also philosophical problems about getting wages to rise in the first place.
In the past nearly decade, it all works around and toward ‘slack.’ Economists claim that the unemployment rate is the best indicator of it largely because of what we find of the past. Despite positive growth since the Great Recession, it was never at any point enough to erase the deep hole with which this post-crisis period started. But because the BLS surveys the labor force and that survey is taken as scientific verification of it, this initial deficit is just ignored as if covered by demographics or other non-economic factors. The unemployment rate says those who want to work are doing so and rapidly enough since the middle of 2014 that the recovery is full and the economy will only getter better from here (so that monetary policy must shift before it gets ‘too’ good).

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ August 10, 2016.

The Stock Market Is Disappearing In One Giant LBO – – The Wilshire 5000 is Now Down To 3607 Companies

Numbers and false advertising have a long history: 4.9% unemployment, 2.5% GDP growth, 72 virgins. Now we can add the Wilshire 5000 to the list.
What started with good intentions ended with embarrassment as American economic dynamism collapsed in a cascade of falling profit margins, financial engineering, labor devaluation, and lopsided ‘free trade’ agreements. In 1974, Wilshire Associates created the Wilshire 5000, an index of 5,000 stocks that represented nearly the entire stock market. As new companies went public, the index expanded over the years, reaching a peak of 7,562 on July 31, 1998. Since then, the number of companies has been cut in half to 3,607 as of March 31, 2016. Wilshire notes, ‘The last time the Wilshire 5000 actually contained 5,000 or more companies was December 29, 2005.’

This post was published at David Stockmans Contra Corner on August 7, 2016.

What One Million Recently Fired Chinese Coal And Steel Workers Are Doing Now

Having followed China’s biggest risk with great interest for the past year, which incidentally is not its $36 trillion in debt, nor its defaults, its zombie companies, its ponzi “wealth products”, its currency, its capital outflows, its crony capitalism and corruption, nor its gargantuan capital misallocation, but the threat of a social revolution as a result of a surge in unemployment as entire zombie industries fail, that has always been true biggest risk for Beijing (something the Politburo knows very well), we found it less than surprising when last September a Chinese coal company announced it would fires 100,000.
That was just the tip of the iceberg for China’s insolvent commodity sector, which just happens to employs tens of millions of no longer needed workers.
Things then rapidly escalated, and as we reported in March, China’s mass layoff wave was only just starting when it was revealed that China aims to lay off 5-6 million state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution.
We expect that tens of millions more will or already have been fired as China struggles to resolve it gargantuan “overcapacity” problem.

This post was published at Zero Hedge on Jul 22, 2016.

SNAP And The Snap-Back In Labor Force Participation Rates – – Hardly A Coincidence

The most troubling aspect of the payroll reports month after month through the ‘best jobs market in decades’ was how the counted labor force seemed so entirely apathetic to it. If jobs were suddenly plentiful, it would stand to reason that Americans and the deep pool of them sidelined since the Great Recession would be lining up to participate. Because that didn’t happen, questions about the validity of the headline Establishment Survey numbers and the unemployment rate were included within those very same monthly updates.
That all suddenly changed with the October 2015 release. All of a sudden, the labor force shockingly and sharply came to life, with more than 2 million joining up in only a condensed six-month period through March 2016. It happened just as the Fed decided the recovery was completing and that the economy was shifting more toward overheating. The growth in the labor force could not have come at a better time to add some much needed validity (or at least to soften some doubt) to what they were seeing and thinking.
The nature of that surge, however, was itself dubious. The rise in labor participation would not if organically-driven apply all at once; it would be, as in the past, a more sustained action rather than taking the form of a sudden and conspicuous spike. The Household Survey showed a related surge that also argued for a potential statistical explanation.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ July 19, 2016.