Perhaps Harris/Walz should adopt the Imperial March from Star Wars as their theme song. Between Biden/Harris uncontrolled immigration disaster helping to destroy New York City, Harris’ statement that she won’t do anything differntly from Biden/Harris is alarming.
The NY Empire survey crashed from +11.5 to -11.9 – the lowest since May. That is the biggest MoM drop since January…
A measure of current new orders plunged nearly 20 points to -10.2 after climbing a month earlier to the highest since April 2023.
The index of shipments decreased almost 21 points to minus 2.7.
The employment index, however, rebounded to 4.1 – the first expansion in a year – while a measure of hours worked also climbed.
Meanwhile, the New York Fed’s gauge of prices paid for materials increased to a six-month high of 29, while an index of prices received by state manufacturers also accelerated.
And with this awful news, the US Treasury yield curve remains downward/upward sloping. I call this the schizophenic yield curve.
Biden/Harris will be remembered for many things, mostly BAD. Uncontrolled immigration, crime out of control, endless wars, grossly incompetent government administrators, 200k+ missing immigrant children, etc. But wreckless inflation coming from insane government spending takes the cake. And it is heating up again, with the help of The Feral Reserve. Yes, The FERAL Reserve.
Under Biden/Harris, prices are WAY up, real weekly earnings are WAY down.
For the 52nd straight month, core consumer prices rose on a MoM basis in September (+0.3% MoM – hotter than the 0.2% expected) – the strongest since March. That left Core CPI YoY up 3.3%, hotter than the 3.2% expected…
Source: Bloomberg
The headline CPI also printed hotter than expected (+0.2% MoM vs +0.1% MoM exp), with the YoY CPI up 2.4% (hotter than the 2.3% expected but lowest since Feb 2021)…
Source: Bloomberg
Core Services and Food costs surged in September…
Source: Bloomberg
Overall, headline consumer prices are up over 20% (5.1% p.a.) since the Biden-Harris admin took over, which compares to around 8% (1.97% p.a) during Trump’s first term…
Source: Bloomberg
The so-called SuperCore CPI also increased on a YoY basis to +4.6%…
Source: Bloomberg
A surge in Transportation Services costs (record high auto insurance) and Medical Care Supplies lifted Super Core…
Source: Bloomberg
Why is the cost of auto insurance up 56% since Biden and Harris took over?
Source: Bloomberg
Real wages are down since the start of the Biden-Harris administration…
Source: Bloomberg
Finally, we note that money supply is resurgent once again, suggesting The Fed’s confidence in CPI’s decline may be misplaced…
Source: Bloomberg
Could we really replay the ’70s once again?
Source: Bloomberg
Will that really be Powell’s legacy? Or will the timing of this resurgence in inflation be perfectly timed to coincide with Trump’s election victory… and offer a perfect patsy for who is to blame?
It turns out that Powell’s “emergency” 50bps rate cut was – drumroll – another major policy mistake by the Fed. Or it is Presidential election interference by The Biden/Harris Administration giving Cacklin’ Kamala as talking point?
Moments ago, the BLS reported that at a time when prevailing consensus was for jobs to continue their recent downward slide sparked by the near-record annual jobs revision and several months of downbeat jobs reports, in September the US unexpectedly added a whopping 254K jobs, the biggest monthly increase since March…
There’s more: unlike previous months where we saw repeat downward job revisions, the BLS said that both prior months were revised up, to wit: the change in total nonfarm payroll employment for July was revised up by 55,000, from +89,000 to +144,000, and the change for August was revised up by 17,000, from +142,000 to +159,000. With these revisions, employment in July and August combined is 72,000 higher than previously reported.
Some context: as UBS notes, the moving six-month average on nonfarm payrolls is 167k. The estimate is that 150k is about consistent with a return of the economy to trend growth. Which means that inflation is about to come back with a vengeance, just as the Fed launches its easing cycle.
Remarkably, while payrolls jumped by the most in half a year, the number of employed people also surged, rising by a whopping 430K, also the biggest one-month jump since March.
It wasn’t just the payrolls, however, which came in far stronger than estimates: the unemployment rate also came in stronger than expected, and thanks to the jump in employed workers coupled with the decline in unemployed workers (from 7.115MM to 6.834MM), it dropped from 4.2% to 4.1% (and down from 4.3% two months ago which spared the entire recession panic).
Among the major worker groups, the unemployment rate for adult men (3.7 percent) decreased in September. The jobless rates for adult women (3.6 percent), teenagers (14.3 percent), Whites (3.6 percent), Blacks (5.7 percent), Asians (4.1 percent), and Hispanics (5.1 percent) showed little or no change over the month.
And here is the rub, because in a vacuum the super strong jobs numbers would have been fantastic, the only issue is that the September blowout comes as the Fed launches an easing cycle and as wages are once again rising as we have warned for the past 3 months. Indeed, in September, the average hourly earnings rose 0.4% sequentially, beating the estimate of 0.3%, while on an annual basis, wage growth was 4.0%, up from an upward revised 3.9% and beating the 3.8% estimate.
One note here: the average workweek for all employees edged down by 0.1 hour to 34.2 hours in September, which means the hourly earnings increase is not “pure” but rather a function of denominator adjustments. In manufacturing, the average workweek was unchanged at 40.0 hours, and overtime edged down by 0.1 hour to 2.9 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.7 hours.
What sector had the biggest growth? UNPRODUCTIVE government workers! A record 785,000 government workers were added in September, pushing total govt workers also to a new record high.
The Biden/Harris Administration has given away billions of dollars to foreign nations (like Ukraine) and illegal immigrants so far this year,
– $24,400,000,000 to Ukraine.
– $11,300,000,000 to Israel.
– $1,950,000,000 to Ethiopia.
– $1,600,000,000 to Jordan.
– $1,400,000,000 to Egypt.
– $1,100,000,000 to Afghanistan.
– $1,100,000,000 to Somalia.
– $1,000,000,000 to Yemen.
– $987,000,000 to Congo.
– $896,000,000 to Syria.
– $9,000 per illegal immigrant that has entered the U.S.
And claim that FEMA has no money left for Hurricane Helene victims who have received only $750 per person. So I have plenty of reasons to have no trust or confidence in the Biden/Harris Mal-administration.
The University of Michigan consumer survery is out and the results are startling.
Under Biden/Harris, buying conditions are far worse than under Trump/Pence.
In fact, buying conditions were extremely favorable (above 100) under Trump and dismal under Harris. Particularly for housing (where higher than normal mortgage rates and high housing prices made the “American Dream” the American Scream.
Since October 2019, native-born US workers have lost 1.4 million jobs; over the same period foreign-born workers have gained 3 million jobs.
Ay ay ay ay, ay ay ay ay!
The last three monthly jobs reports show aggregate job gains of 340K. Of that total 172K are accounted for by Health Care and Social Assistance and 60K by Government. Manufacturing jobs have shrunk by 34K; Professional and Business services, a 16k decline.
Biden/Harris have alliowed the US to be invaded. Under Harris, the new US national anthem will be Jesusita en Chihuahua.
I read “The Arms of Krupp” by William Manchester. A great book about the rise of ThyssenKrupp during World War II. It is one of the world’s largest steel producers, but it now has NEGATIVE ENTERPRISE VALUE.
The cause? Germany is up the creek without an economic paddle after years of gross mismanagement by Angela Merkel and her party. Mass immigration in Germany and a slowdown in the global economy aren’t helping.
These are the essential pillars of “21st century socialism” and the radical left Peronism that obliterated Argentina. These are also the main elements of the economic plan presented by Kamala Harris and the Democratic Party. Undoubtedly, this is the most radical socialist economic plan ever announced by the Democrats.
According to the Committee for a Responsible Federal Budget (CRFB), Harris’s proposals will cost $1.95 trillion over 10 years. However, it emphasizes that if certain measures become permanent, this figure could increase to $2.25 trillion.
The Harris campaign has stated that these costs will be offset by a classic excuse of socialism in any election: “higher taxes on corporations and high earners.” This is, obviously, ludicrous, because there is no revenue measure that will cover the already bloated $2 trillion annual deficit and an added $2 trillion. The mantra of “higher taxes for the rich” always means higher taxes and more inflation, a hidden tax, for you.
The Congressional Budget Office (CBO) has already warned of the fiscal disaster of the United States, with an annual deficit of 6% of GDP. Despite not accounting for a recession and projecting record tax revenues from 2024 to 2034, the CBO predicts an explosion in the budget deficit from $1.9 trillion to $2.8 trillion by 2034, even before factoring in Harris’s new spending plan. This means that the adjusted deficit will rise above 6.9 percent of GDP by 2034, almost twice the average of 3.7 percent over the previous 50 years.
Following the Harris plan, the United States public debt will likely increase by $24 trillion in a decade. As I have explained, there is no set of revenue measures that can bring $2 trillion per year in additional tax receipts, and tax hikes will harm both investment and growth.
An economy that generates an annual deficit of 6 percent of GDP to achieve a mere 2 percent annual growth is already on a dangerous path, and Harris’ plan would make it even worse.
Kamala Harris promises to cut inflation by spending and printing more money, reducing competition, and attacking businesses. It has never worked and never will because it is upside-down economics. Welcome to the US “Peronism.”.
Imagine all those United States citizens who have escaped Latin American or European economies impoverished by interventionism to find a better opportunity in the United States only to find that the same policies will be implemented by Harris.
The narrative of price gouging and greedflation is simply false. In 2023, profit margins in the grocery industry hit the lowest level since 2019, at 1.6%, according to the IMF. Corporations, even if they were stupid and reckless, cannot make all prices rise constantly. Competition would eat away at their market share; newcomers would eliminate them, and aggregate prices would fall. Furthermore, stores and businesses cannot make aggregate prices soar, maintain the increase, and consolidate it, which is the measure of inflation (CPI) we read every month. The only thing that can make all prices rise and continue increasing at a slower pace is printing money and eroding the purchasing power of the currency.
The only thing that can make aggregate prices rise constantly is the destruction of the purchasing power of the currency, which comes from massive government spending and printing currency to disguise fiscal imbalances.
Kamala Harris and her team know that their spending plan will make the national debt soar and that price controls do not reduce prices. In fact, these should not be called “price controls” but “limits to competition.” If corporations were the cause of inflation and price controls were the solution, Peronist Argentina would have enjoyed the lowest inflation in the world in the past decades.
Harris’ proposals to forgive debt are profoundly anti-social. They do not forgive any debt; they just add it to the national debt and make you pay for it. This enormous increase in public debt will be a burden for every American, particularly the poorest, with persistent inflation and lower real wages. US citizens have already endured negative real wage growth since January 2021, when Biden took office, according to the Federal reserve of St Louis. Expect worse.
Why does Harris promote the same policies that have failed everywhere? Promising free stuff and blaming others for the negative consequences is the defining strategy of socialist politicians.
Are you surprised to see how Germany, France, and other historically rich nations slump into stagnation, high debt, persistent inflation, enormous taxes, and the destruction of the middle class? Those policies are what Harris is promising. Who benefits? The vast government and its surrounding corporations reap the benefits.
Many people hold the belief that a nation cannot be considered socialist if it contains private companies. It makes no sense. State control does not limit itself to capital ownership but also to the imposition of increasingly restrictive laws, regulations, and confiscatory taxes. In fact, the government likes to absorb most of the wealth created by the private sector without the inconvenience of managing the businesses. Huerta de Soto defines socialism as “any system of institutional, methodical aggression against the free exercise of entrepreneurship” and that is precisely what Harris promises.
Higher taxes and more debt.
The government will print money to provide subsidies in a currency that is constantly losing value. It will blame stores and businesses for inflation. Interventionist policies will continue to erode the private sector. And they will repeat.
The makers of these policies are aware that they will negatively impact the economy, yet they will also engender a substantial number of enslaved citizens who rely on the government and must abide by its decisions. Voters see an alleged tsunami of free money but ignore the fact that they will pay for it through higher inflation, lower real wages, and diminishing opportunities for small businesses and families.
Yes, under Obama/Biden, then Biden/Harris,
The Harris team believes deficits do not matter and that the Federal Reserve can always disguise any budget imbalance. However, cracks have already appeared. Persistent inflation is the consequence of years of excessive spending and monetization. The next step is the risk of losing the US dollar as the world reserve currency when the world stops accepting the ever-increasing debt.
Under Obama/Biden and Biden/Harris, we have seen massive money printing and devaluation of the US Dollar. Trump/Pence too, but they were nailed with Covid. And the Democrat shut down off schools and local economies.
But all Harris (America’s Eva Peron) wants to do is dance. And not answer serious questions.
Combined Biden/Harris’ spending spree with The Fed’s monetary goonery and we got inflation (gasoline, food, shelter). With spiraling inflation in mortgage rates and shelter prices we saw a correponding decline in existing home sales under Biden/Harris.
Harris claims to lower prices on her first day in office (she has been in office as VP since 2021 and actually voted in the US Senate as tie breaker to enact policies that INCREASED Inflation). But her suggestion of $25,000 for ALL first time homebuyers is of course INFLATIONARY. And her anti-price gouging policies willl of course reduce supply of groceries avaiable, driving up INFLATION.
After watching the Democrat hate fest last night (Aka, the Democrat National Convention), I was not shocked that the DNC platform looked like a playbook to destroy the US economy. High taxes, endless spending, more regulations, etc. Not a word about the staggering side of the US debt load … with Harris’ economic plan projected to add a whopping $25 trillon in debt to the already massive $35+ trillion debt load.
And not a mention that US interest payments on the national debt already exceeds defense spending. And is booming!
Of course, Harris’s economic vision is a continutation of Biden’s disastrous visions (which are Obama’s vision of US obliteration). Most politicians in Congress are millionaires (including Bernie Sanders) and won’t suffer from their insane “progressive” policies. Watching last night’s DNC hatefest was like watching nasty 2nd graders having a party.
Of course, the drove of anti-American, anti-properity speakers spewing venom (I hate Hillary’s flat-tone speaking style) like Hillary, Jaime Raskin (aka, Rasputin), AOC, etc. all failed to acknowledge to acknowledge the already monstrous size of the US debt ($35+ trillion) or the massive size of the unfunded promises ($218+ TRILLION). Of course not.
The handle the staggering interest payments that will crowd out other spending, The Federal Reserve will be forced to lower rates.
Of course, Democrats will wheel out “economists” like Robert Reich who say that the debt doesn’t matter.
…and the head of The Conference Board says ‘nothing to see here’…
“The LEI continues to fall on a month-over-month basis, but the six-month annual growth rate no longer signals recession ahead,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.
For context, outside of the great financial crisis, this is the worst decline in LEI since the mid ’70s!!!
And what is behind the ‘no recession’ call… US equity strength!!
Thank The Feral Reserve for the equity spike!
So, to summarize – almost all the macro data signals weakening growth for years… but because stocks are up (and credit spreads down), there’s no recession anywhere on the horizon!!??
Confounded Interest - Anthony B. Sanders 
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