The Cold Reality of Bidenomics And The Jobs Market: Philadelphia Fed Admits US Payrolls Overstated By At Least 800,000 (All New Jobs Over Past Year Were Part-time Jobs!)

Well, ain’t this a kick in the head!

The Philadelphia Fed says the US Payrolls overstated by at least 800,000. While Biden was in New York City with the other former Presidents (Clinton and Obama) raising money for Biden’s reelection bid, Trump attended a wake for a fallen police officer.

The jobs market is much worse than Biden and his mouthpieces claim.

The first red flags emerged in the summer of 2022: that’s when the Biden Labor Department started well and truly rigging the labor market data.

Something has snapped in the labor market: that’s when a staggering discrepancy emerged between the number of Payrolls (as measured by the BLS’ Establishment Survey, a far more crude and imprecise, yet much more market-moving data series), and the number of actual Employed Workers (as measured by the BLS’ far more accurate Household Survey). As we showed at the time, after the two series had tracked each other tick for tick, a gap opened in March 2022 which quickly grew to 1.5 million jobs in just 3 months…

… and has since exploded to a whopping gap of 5 million “jobs” that apparently do not exist.

And while some of this discrepancy could be explained with the record surge in multiple jobholders, which increased by 1 million since March 2022 to an all time high of 8.6 million at the end of 2023 (as a reminder, the Establishment Survey counts 1 worker have 2 or 3 (or more) multiple jobs as, well, 2 or 3 (or more) separate jobs, even if it is just one worker trying to make ends meet under the roaring inflation of Bidenomics), most of the gap remained unexplained.

There was more: it was around the summer of 2022 that the Biden labor department – in its zeal to show job growth no matter the cost, or quality of jobs – also started fooling around with the composition of the labor market, with most of the monthly gains going to part-time workers, even as full-time workers stagnated or declined. The culmination, as we reported earlier this month, is that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Which is great… until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

In other words, starting in 2022 and accelerating to present days, less and less full-time jobs were added, until we got to the absurd situation that all the new jobs in the past year have been part-time jobs!

And then there was, of course, the great jobs replacement theory, only as we first showed well over a year ago, it wasn’t a theory but practice, and following countless months in which native-born workers lost their jobs, including a near-record 3-month plunge to start 2024…

… offset by a record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February…

Or, as we first pointed out several months ago, not only has all job creation in the past 6 years – since May 2018 – has been exclusively for foreign-born workers…

… but there has been zero job-creation for native born workers since June 2018!

Ok fine, but all of the above are really just example of the Biden admin Labor Department playing around with statistics and trying (and succeeding) to fool the greatest number of people. There is really nothing about outright data rigging and fabrication… and also while we realize that the Household survey shows a far uglier labor market – one where part-time jobs, illegal immigrants, and multiple jobholders dominate – what about the Establishment survey, which is behind the actual payrolls number, the only number that matters as far as the market is concerned?

All good points, and to address them, we first have to go back to December 2022, when it reported something shocking: as part of its data analysis of the “more comprehensive, accurate job estimates released by the BLS as part of its Quarterly Census of Employment and Wages (QCEW) program“, the Philadelphia Fed found that the BLS had overstated jobs to the tune of 1.1 million! This is what the Philadelphia Fed wrote in its quarterly Early Benchmark Revision of State Payroll Employment report at the time:

Our estimates incorporate more comprehensive, accurate job estimates released by the BLS as part of its Quarterly Census of Employment and Wages (QCEW) program to augment the sample data from the BLS’s CES that are issued monthly on a timely basis. All percentage change calculations are expressed as annualized rates. Read more about our methodology. Learn more about interpreting our early benchmark estimates.

So what did this “more accurate”, “more comprehensive” report find? It found that…

In the aggregate, 10,500 net new jobs were added during the period rather than the 1,121,500 jobs estimated by the sum of the states; the U.S. CES estimated net growth of 1,047,000 jobs for the period.

This is shown graphically in the chart below: specifically, the analysis looks at the quarter in the red box, where the green line, or the more accurate “early benchmark” revision of official data, dipped decidedly below the CES trendline (i.e., the nonfarm payrolls).

Alas, since the far more accurate Quarterly Census of Employment and Wages (QCEW) numbers would not be actually incorporated into BLS benchmarks for well over a year after we wrote our analysis in Dec 2022, neither we nor the market would know just how manipulated the data was until early 2024. Which, of course, is now, and as we already know, the BLS had been consistently downward revising virtually all initial job prints in 2023 (ten of the eleven jobs reports heading into Dec 2023 were revised lower) to make the economy more realistic but only in retrospect…

… however, even though we do know now that the jobs data in 2022 was far weaker than anyone thought at the time, nobody really cares: after all there are part-time jobs and illegal immigrants to plug any and all historical holes, plus we are talking about ancient history.

Plus, we have all those great recent jobs reports to fall back on: the ones that confirm that Bidenomics is doing such a great job.

Only… that’s not true either. Presenting Exhibit A: the latest Philadelphia Fed quarterly report on Early Benchmark Revisions of State Payroll Employment. It shows that once again, the BLS has been fabricating jobs, and not just any jobs but those that make up the all-important (if highly inaccurate) payrolls reported by the Biden Bureau of Goalseeked Statistics.

The primary purpose of this analysis, in the Philly Fed’s own words, is “to produce timely estimates of state payroll jobs that closely predict the annual benchmark revisions released by the BLS each March. To do so, we incorporate more comprehensive job estimates released by the BLS as part of its Quarterly Census of Employment and Wages (QCEW) program.” This is more or less a replica of the analysis which the Philly Fed performed back in December, when it found that 1.1 million jobs were unexpectedly “missing.”

So what happened this time? Well, the analysis, which looked at state-level data, “found that “the employment changes from June through September 2023 were significantly different in 27 states compared with prebenchmark state estimates from the Bureau of Labor Statistics’ (BLS) Current Employment Statistics (CES).” Specifically, “early benchmark (EB) estimates indicated lower changes in 24 states, higher changes in three states, and lesser changes in the remaining 23 states and the District of Columbia.“

Some more details from the report:

Over the full year ending with this 2023 Q3 vintage — which includes additional QCEW data changes affecting the prior three quarters — payroll jobs in the 50 states and the District of Columbia grew 1.5 percent.

Based on the pre-benchmark CES sum of states and the U.S. CES, payroll jobs grew 1.9 percent and 2.0 percent, respectively.

The revised CES sum-of-states growth rate is 1.5 percent.

For 2023 Q3, payroll jobs in the 50 states and the District of Columbia rose 0.5 percent, after adjusting for QCEW data.

Based on both the prebenchmark CES sum of states and the U.S. CES, payroll jobs grew 1.7 percent.

The revised CES sum-of-states growth rate is 0.5 percent

We’ll go back to the chart above in a second, but first we wanted to show this scatter of state-level employment comparing the St Louis Fed’s more accurate early benchmarking process vs the BLS’ Prebenchmarking CES process: it found that most states’ labor data would be revised lower, in many substantially so.

Ok… but what does all of that mean in English?

Well, to make some more sense of the data, we went through the Early Benchmark state-level data excel spreadsheet provided by the Philly Fed (link), and simply added across the various states to obtain aggregate, country-level data so that we could compare the far more accurate QCEW data with what the BLS had been peddling for the past year.

The result was – again – shocking, and as shown in the chart below, a little over a year after we, or rather the Philly Fed, found that the BLS had overstated payrolls in 2022 by 1.1 million, here we go again, only this time the BLS had overstated payrolls by 800,000 through Dec 2023 (and more if one were to extend the data series into 2024). It’s truly statistically remarkable how every time the data error is in favor of a stronger, if fake, economy.

it also means that far from the stellar 230K average monthly increase in payrolls in 2023, which the White House would spin time and again as direct evidence of the benefits of Bidenomics, the true average monthly payroll increase in 2023 was only 130K! The full monthly change in payrolls as originally reported by the BLS (in green) and the actual monthly number, as per the QCEW (in red) is shown below.

Putting it all together, we now know – as the Philly Fed reported first – that the labor market is far weaker than conventionally believed. In fact, no less than 800,000 payrolls are “missing” when one uses the far more accurate Quarterly Census of Employment and Wages data rather than the BLS’ woefully inaccurate and politically mandated payrolls “data”, and if one looks back the the monthly gains across most of 2023, one gets not 230K jobs added on average every month but rather 130K.

Of course, none of that paints Bidenomics in a flattering picture, because while one can at least pretend that issuing $1 trillion in debt every 100 days to add 3 million jos per year is somewhat acceptable, learning that that ridiculous amount buys 800,000 jobs less is hardly the endorsement that the White House needs.

Which is also why nobody in the mainstream media – which is now nothing more than the PR smokescreen for the Biden puppetmasters, the government and the deep state – will ever mention this report.

Bidenomics Reality Check! Chicago Fed’s PMI Crashes To 41.4 (Usually Found In Recessions)

Chicago Illinois used to be a shiny toy.

Soft’ survey data has been a bloodbath this week with regional Fed surveys all slumping and this morning’s Chicago PMI uglier than all expectations.

That smashed ‘hope’ – the spread between hard and soft data – back to cycle lows…

Source: Bloomberg

Today’s Chicago PMI plunged to 41.4 – its lowest since May 2023 – from 44.0 (and well below the expected bounce to 46.0)…

Source: Bloomberg

That was below all analysts expectations for the second month in a row…

Source: Bloomberg

Under the hood was even more problematic:

New orders fell at a faster pace; signaling contraction
Employment fell at a slower pace; signaling contraction
Inventories fell at a faster pace; signaling contraction
Supplier deliveries fell and a faster pace; signaling contraction
Production fell at a faster pace; signaling contraction
Order backlogs fell at a slower pace; signaling contraction

Worse still, Prices paid rose again!

So, in summary: slower growth, declining production, shrinking orders, falling employment… and accelerating inflation – is it any wonder that ‘soft survey’ data is collapsing – not exactly election-winning headlines.

Biden asking Zelenskyy for a loan so he can fix the bridge….

Fear The Talking Fed! Global Debt Fast Approaching $100 Trillion As Fed Talks Rate Cuts In Election Year

Fear The Talking Fed!

Back in mid-December, after the Fed’s first, and very shocking, dovish pivot when just two weeks after Powell said it had been “premature” to speculate on rate cuts the Fed suddenly changed its mind (despite very strong economic reports in the interim) and unexpectedly revealed it had been “discussing a timeline to start rate cuts”…

… in the process, sparking the biggest market meltup in a decade, we explained that there was no mystery behind the Fed’s sudden change of heart: it had everything to do with Biden’s woeful performance in the polls.

… maybe what that happened in the past two weeks had nothing to do with economic data, the state of the US consumer, or how hot inflation is running and everything to do with… phone calls from the increasingly angry White House, the same White House which after seeing the latest polling data putting Biden at the biggest disadvantage behind Trump despite the miracle of “Bidenomics” decided to pull its last political level, and had a back room conversation with the Fed Chair, making it very clear that it is in everyone’s best interest if the Fed ends its tightening campaign and informs the market that rate cuts are coming. It certainly would explain why despite keeping the 2026 projected fed funds rate unchanged at 2.875%, the Fed just as unexpectedly decided to pull one full rate cut out of the non-election year 2025 and push it into the pre-election 2024.

Three months later, when Powell again shocked the world with yet another exceedingly dovish press conference, this time pushing the S&P to all time highs as it became increasingly clear the Fed has raised its inflation target to 3% or more, as we first discussed in “There Goes The Fed’s Inflation Target: Terminal Rate To Rise 100bps To 3.5% And More” and as Bloomberg confirmed today in “Powell Ready to Support Job Market Even If Inflation Lingers“, there was again some confusion, most notably from the likes of Jeff Epstein BFF Larry Summers who tweeted:

I don’t know why @federalreserve is in such a hurry to be talking about moving towards the accelerator. We’ve got unemployment, if anything, below what they think is full capacity. We’ve got inflation, even in their forecast, for the next two years above target. We’ve got GDP growth rising if anything faster than potential. We have financial conditions, the holistic measure of monetary policy, at a very loose level.

… to which we again replied that there is a very simple reason why the Fed is “moving toward the accelerator” and it again had to do with the fact that Biden approval rating is now imploding, so much so that even Time magazine has stepped in with an intervention.

But while once upon a time such a cynical, hyperbolic, and apocryphal view would have been relegated to the deep, dark corners of the financial blogosphere (duly shadowbanned and deboosted by the likes of such Democratic party stalwarts as Google, of course), that is no longer the case and in his latest note, SocGen’s in-house permaskeptic, Albert Edwards confirmed our view that the biggest driver behind the Fed’s decision making in recent months is neither the economy, nor the market, but rather the November presidential election, to wit:

The widening inequality chasm in this US election year will be a real issue for policy makers. What will the Fed do? Traditionally, the Fed would not pivot rates policy to cushion inequality, which is usually addressed by fiscal policy. But growing inequality has been a key issue ever since the 2008 Global Financial Crisis triggered a backlash against ‘The Establishment’ – most evident in the rise in popularism (although many, including myself, believe that the loose money/tight fiscal policy mix was primarily responsible).

Might the unfolding inequality crisis force the Fed to bow to intense political pressure to cut rates faster and deeper? I think that is entirely plausible. Indeed we on these pages have previously observed, somewhat cynically, that Powell’s recent ‘surprise’ December 2023 dovish pivot came exactly at a time when Donald Trump was pulling ahead in the polls – link. But it would be a diehard cynic who could contemplate that the Fed, as part of ‘The Establishment’, would balk at the thought of Trump winning in November and juice up the economy to try and lower the odds of such an outcome. (I am that cynic.)

To be fair, we find it remarkable that Edwards – a long-tenured and respected veteran of the SocGen macro commentariat – would confirm our own observations. We doubt he is the only one, of course, but the others are far more afraid of losing their jobs, at least for now.

What we find less remarkable is that Edwards – whose job is to track down gruesome and painful ways for the market to die a miserable death – has done just that again and this time, in the aftermath of the BOJ’s long overdue exit from NIRP, ETF buying and Yield Curve Control, predicts that it is now only a matter of time before the YCC that was spawned in Japan will soon shift to the west.

Edwards starts off by observing what has long been a “foolproof” signal of imminent recession: BOJ tightenging:

Market sentiment is now especially vulnerable to weak economic data because, as we pointed out last week, it seems everyone (and their dog) has left their recessionary worries far behind. But as my favorite bear, David Rosenberg, pointed out this week, recent weak retail sales, housing starts, and industrial production data might be setting us up for a negative US Q1 GDP print. Let’s see how the Fed reacts to that. And if you want one reliable predictor of a global recession, @PeterBerezinBCA notes that “In the history of modern finance, no single indicator has done a better job of predicting when the next global recession will start than when the Bank of Japan starts raising rates. Foolproof!”

He then recaps last week’s main event, namely that after almost a decade, Japan finally exited negative interest rates and Yield Curve Control (YYC), primarily on the back of soaring (nominal, not real) wage gains: “Rengo, Japan’s largest trade union confederation, announced last Friday that its members have so far secured pay deals averaging 5.28%, far outpacing the 3.8% squeezed out a year ago — itself the highest gain in 30 years (see Bloomberg here and SG Economist Jin Kenzaki’s analysis of this data and the BoJ’s move here).“

Of course, the problem in Japan is not that nominal wages are surging: it is that in real terms they are crashing, as the next chart clearly shows, and is why the BOJ will have to dramatically tighten – certainly much, much more than the laughable “dovish hike” it delivered last week which sent the yen plunging to a multi-decade low and inviting even more imported inflation – to avoid total collapse in Japan’s economy as it gradually accelerates toward hyperinflation:

Of course, Japan can not actually tighten as that would instantly vaporize the economy and the bond market of a country whose central bank owns Japanese JGBs accounting for well more than 100% of GDP. But at least Japan has something goign for it: as Edwards notes, “the OCED estimates that interest on US debt amounts to 4½% of GDP, compared to only 0.1% of GDP for Japan (link). Hence the cyclically adjusted primary (ex-interest) deficit data show Japan as the most profligate borrower (see right hand chart). But the US still has to pay that interest somehow.” In other words, when adding interest payment, “it is the US that has been running the largest deficits since the 2008 GFC – bigger than even Japan (see left hand chart).”

Which brings us to Edwards’ punchline: “decades of excessively loose monetary policy has allowed governments to ruin their fiscal situations to the point that public debt to GDP ratios are on wholly unsustainable trajectories. Just look at the CBO’s projections for the US here. Yet with an ever-intensifying populist backlash against high levels of inequality, I can only see one way out of this mess for western economies. Nothing less than Financial Repression including Yield Curve Control – yes, the very same YCC that Japan has just abandoned.”

For those who may not have been around back in the 1940s when the US – and the Federal Reserve – was the first developed nation to utilize YCC to kickstart the US economy at a time of record debt to GDP, here is a quick primer from the SocGen strategist: “Financial Repression essentially entails holding interest rates below the rate of inflation for a lengthy period to allow debt to be ‘burned off’. This is a tried and trusted way for governments to wriggle free from excessive debt (eg the US after WW2). The leading economic historian Russell Napier explained how this works in an informative 2021 interview with The Market NZZ – link.”

And indeed, it was only a few years ago, just before the pandemic sparked a stimulus flood of epic proportions, that western policy makers were switching to average inflation targeting and stating that they would run economies hot to create that higher inflation (they got it but not because of AIT). That was the first notable attempt to shift toward Financial Repression, but as Edwards notes, “unfortunately they were too successful and let the rampant inflation cat out of the bag.”

Which brings up the $64 trillion question: “Do the Fed and ECB really want inflation to return to pre-pandemic inflation lows?” Well, with global debt now about 7x higher in just the 21st century, and fast approaching $100 trillion, meaning it will all have to be inflated away somehow…

… Edwards’ answer is: “Not in my view.” And so while western economists deride Japan for its YCC policies, Albert says “that is where I think the US and Europe are heading as intractable government deficits drive up bond yields. During the next crisis, don’t be surprised to see yet more Japanification of western central bank policy. Plus ça change.” And don’t be surprised if the dollar – while appreciating against the rest of the world’s doomed currencies in the closed fiat-system loop – hyperdevalues against such finite concepts which mercifully remain out of the fiat system, such as gold and crypto.

And wage inflation remains around 5%.

Another Terrible Jobs Report! While 275k Jobs Added In February, Jobs Were Taken By Foreign-born Workers (Full-time Jobs Fell Again While Part-time Jobs Soared)

After witnessing the debacle called “The State of the Union Address” or “Crazy Grandfather Screams At Nation To Get Off His Lawn,” I was hoping that today’s jobs report would make me happier. It didn’t. In fact, the February jobs report was downright awful.

Let’s start with the “good news.” 315k jobs were added in February.

Now for the “bad news.” The civilian labor force for NATIVE BORN Americans declined by -0.43% YoY in February while FOREIGN BORN rose by 5.50% YoY.

Then we have FULL-TIME workers falling by -0.213% YoY in February while PART-TIME workers rose by 3.41% YoY.

So for NATIVE BORN Americans, this was a terrible report. But if you are FOREIGN BORN, you can party like its 1999.

Maybe now you can understand why Biden gave his angry SOTU speech. Perhaps he saw how bad February’s jobs report was for Middle class America and was trying to redirect the rage away from himself towards the Supreme Court, MAGA Republicans, corporate America (his biggest donors?), and the 6 year old that walked across The White House Lawn uninvited.

Stop, Stop, Stop … Printing! Consumer Purchasing Power Down 97% Since Fed Creation (1913) And Down 16% Under Biden (M2 Money Velocity And Debt Velocity STINK!)

The Hollies said it best: Stop, stop, stop. FIAT Money Printing that is.

Typically, we look at M2 Money Velocity (GDP/M2) as a measure of how much the economy grows by expanding the money supply.

M2 Money Velocity is currently at 1.344, and still below where we were under Trump prior to Covid. After Powell printing palooza after Covid, M2 Money Velocity collapsed and is slowly rising, but remains low by historic standards.

Perhaps a more interest velocity is DEBT velocity (GDP/DEBT). Under Biden’s Reign of Error, Federal debt has increased by $6,539,359 million while real GDP has increased by only $1,948.731 billion (or roughly $2 trillion in GDP growth after $6.54 trillion in debt). Or a DEBT velocity of 0.3. Yikes! No wonder China is bailing on US debt!

This chart makes debt issuance look better than it really is. Again, the DEBT VELOCITY of 0.3 is terrible meaning that for every $1 of Federal debt, we get 30 cents in Real GDP under Biden. One of my macroeconomics textbooks stated that debt growth is fine as long as real GDP growth rises faster than debt growth. Apparently, Treasury Secretary Janet Yellen didn’t read that textbook! Real GDP has grown by 9.43% under Biden while Federal debt has grown by … gulp .. 24%.

Yes, the US is borrowing like the proverbial drunken sailor while they “invest” in green energy, wars in Ukraine and the Middle East, and massive social welfare programs (like the old breads and circuses from the dying Roman Empire). When watching the media’s obsession with Taylor Swift and Chief’s Tight End Travis Kelce at The Super Bowl, it reminded me of “Breads and Circuses” as our nation is collapsing like a dying star. (That is why I Iike Gold, Silver and Bitcoin!)

What about The Federal Reserve? It was created in 1913 after signed into existence by President Woodrow Wilson. Since The Fed’s inception, consumer purchasing power has declined by 97%.

And under Biden, inflation has been so bad that consumer purchasing power is down 16%.

In summary, The Federal Reserve has been printing like crazy (I would say Batshit Crazy, but I actually think bats are adorable). And Treasury (under former Fed Chair Janet Yellen) has been borrowing like crazy too. While politicians claim the economy is in great shape, it is really because The Fed is printing wildly, Yellen is borrowing wildly, and much of US GDP is not due to the private sector, but Federal government spending … to the donor class. This is NOT a sustainable and will eventually crash into a ravine.

Here is an excellent interview with Col. Douglas MacGregor who talks about Bitcoin.

That’s Bidenomics! US Leading Indicators Decline For 22nd Straight Month, Back To March 2006 Levels

That’s Bidenomics for you!

The Conference Board’s Leading Economic Indicators (LEI) continued its decline in January, dropping 0.4% MoM (notably worse than the -0.1% MoM expectations), and December’s 0.1% declin e was revised down to a 0.2% decline.

The biggest positive contributor to the leading index was stock prices (again) at +0.10
The biggest negative contributor was average workweek at -0.18

This is the 22nd straight MoM decline in the LEI (and 23rd month of 25) – equaling the longest streak of declines since ‘Lehman’ (22 straight months of declines from June 2007 to April 2008)

“The U.S. LEI fell further in January, as weekly hours worked in manufacturing continued to decline and the yield spread remained negative,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.

“While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024).

As a result, the leading index currently does not signal recession ahead.

While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”

While the Conference Board seems optimistic, we are struggling to see any signs of hope! tumbling back below the peak in March 2006…

And on a year-over-year basis, the LEI is down 7.0% (down YoY for 19 straight months) – still close to its biggest YoY drop since 2008 (Lehman) outside of the COVID lockdown-enforced collapse (but starting to inflect)…

The annual growth rate of the LEI remains deeply negative and decoupled from Real GDP…..

Finally, the massive easing of financial conditions in the last few months suggests a turn in LEI is imminent…

And hence the ‘soft landing’ mission is accomplished… so no need for rate-cuts? (Except for the banking crisis that looms in March).

Here is the roadmap for Bidenomics.

Back In The Saddle Again! Why The Fed Will RAISE Rates (Home Price Growth Reaccelerating, SuperCore Inflation Is Rising, Mass Immigration)

The Federal Reserve (aka, The Keep) is back in the saddle again. The Fed has been unable to control inflation since Federal government spending was so fast and furious after Covid that little thought was given to the long-term ramifications of insane spending. Not to mention The Fed’s overreaction to Covid.

Example?

Home price growth is rising again. Home prices in traditional “bubble cities” out west were cooling, but are reaccelerating. Even Detroit and Cleveland are seeing rapid home price acceleration.

Yes, housing inflation is sticky.

In retrospect, this wholesale dovish euphoria may have been rather short sighted, because after several strong economist reports hit the tape (with the Nov 2024 election growing closer by the day, that should hardly have been a surprise), March rate cut odds collapsed from over 100% in late December, to just 12% currently…

… as first the January CPI printed red blazing hot – with core coming in at 3.9% far higher than the 3.7% expected, with the 3-month annualized rate jumping to 4% from 3.3% and the 6-month annualized rate spiking to 3.7% vs 3.2%, but the biggest highlight was SuperCore CPI (i.e., core CPI services ex-Shelter) which soared 0.7% MoM, the biggest jump since Sept 2022…

… and then the January PPI print come in even hotter, with a core component surging in January by 0.5%, smashing expectations and beating estimates by the most since Jan 2021.

The result: not only has the market rapidly priced out what if formerly saw as many as 6 rate cuts in 2024, but growing speculation that a rate cut may not come at all unless the Fed tightens some more first (and with the S&P500 now over 5000, it is pretty clear that the market has already priced in virtually all rate cuts and has cornered the Fed).

Of course, the mass migration across the Mexican border (who knows? could be up to 11 million under Biden’s Reign of Error). While Paul Krugman, the resident lunatic economist for the New York Times, extols the virtues of mass immigration for driving up GDP, fails to recognize that mass migration is helping drive up prices. This is inflation that The Fed can’t control. And Biden/Mayorkas want even MORE mass immigration.

Maybe Fed Chair Powell should watch the film “The Keep” for lessons on how to control inflation. in the face of government sanctioned mass ILLEGAL immigration from Latin America, China, Africa and The Middle East.

The Bidenomics Plunge! US Retail Sales Plunged In January, Worst YoY Growth Since COVID Lockdown (Stagflation Warning!)

Like the old Nestea plunge, the US economy is plunging as well.

The Biden matter is about to hit the rotating object as they saw retail sales declining bigly (more than expected) in January judging by real-time credit card spending data…

Source: BofA

After they unexpectedly surged in November and December (driven in large part by a jump in Food Services), headline retail sales in January were expected to decline just 0.2%, but BofA nailed it once again with a large 0.8% MoM drop. That dragged the YoY retail sales down to just 0.6%…

Source: Bloomberg

That is the worst monthly decline since March 2023 and worst YoY rise since May 2020.

It wasn’t pretty…

Motor Vehicles and Parts and Building Materials saw the largest decline MoM…

Source: Bloomberg

On a YoY NSA basis, Gas Stations and Building Materials were the biggest drag, while online retailers and Food Services were the biggest upside drivers…

Source: Bloomberg

Core Retail Sales also declined (-0.5% MoM vs +0.2% exp), which dragged the YoY levels down to their lowest since the COVID lockdowns…

Source: Bloomberg

Adjusted (crudely) for inflation, this was a huge drop in ‘real’ retail sales. REAL retail sales have declined for 11 of the last 15 months – in other words, on a crude basis (Ret Sales – CPI), Americans aren’t buying more shit.

Source: Bloomberg

Finally, the control group – used to feed through to the GDP calculation – tumbled 0.4% MoM (vs expectations of +0.2%).

Soft-landing morphing into a stagflationary crash-landing?

Biden’s Mortgage Market! Mortgage Demand Down 2.3% From Last Week, Purchase Demand Down -12% From Last Year (Mortgage Rate UP 151% Under Bidenomics)

Wake Joe up before the economy go goes … down any further.

Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 9, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 12 percent lower than the same week one year ago.

The Refinance Index decreased 2 percent from the previous week and was 12 percent higher than the same week one year ago.

Mortgage rates (30Y fixed) are up 151% under Bidenomics.

That Foul Jobs Report! Full-time Jobs Tank Under Bidenomics As Serious Delinquencies On Auto Loans Soar To Highest Level Since The Great Recession (PPI Is Deflating But Inflation Remains Higher Than Under Trump)

As some fans celebrate the Kansas City Chiefs Superbowl victory over the San Francisco 49ers (the game was so much like bread and circuses from the Roman Empire except for who is being thrown to the lions), we have been distracted from the horrible state of the US economy. Just review that horrible December Jobs report where the US actually LOST full-time jobs, replaced by part-time jobs.

And with the God awful jobs report, serious delinquencies on auto loans is SOARING. To the highest rate since The Great Recession.

The Producers Price Index is deflating.

At least inflation is cooling down, but still higher than under he that can’t be mentioned on The View, Rachel Maddow or Morning Joe, Donald Trump, the Left’s Voldemort.

I admit, Travis Kelce should have been benched for shoving Head Coach Andy Reid during The Super Bowl. “Damn it, Taylor (Swift) flew here from Tokyo to watch me play and you aren’t throwing enough to me!” Welcome Travis Kelce to the elitist 1% who think the rules don’t apply to them. And your 2.0 GPA at University of Cincinnati certainly qualifies you to opine on the economy … on The View or MSNBC.