Alarm! Challenger Job Cuts Rise 58.8% YoY As Real Wage Growth Is Negative At -3.34% YoY (10Y-2Y Yield Curve SCREAMS Recession)

As most economists are aware, unemployment rates are not a leading indicator of a recession. But job cuts ARE a leading indicator.

Challenger US job cuts rose 58.8% YoY in June. Combine that with negative REAL wage growth (-3.34% YoY) and we have a problem.

Unemployment rate (U-3) is a poor leading indicator of recession since unemployment rates are the lowest before a recession.

Further signaling problems for the might US economy is the US Treasury yield curve (10Y-2Y). It is inverting.

In this slowing economy, there will be fewer people singing “Take This Job And Shove It!”.

Bidenflation Strikes! Dow Down 2% As Recession Fears Grow (Check Out M1 Money Growth!)

Lightning strikes!

Inflation has been a disaster for millions of Americans. As inflation grows (highest in 40 years), fears of recession are jolting markets.

The Dow today is down 2%.

Then again, Europe is down even more.

My favorite chart for explaining the surge in inflation is M1 Money Stock around the Covid outbreak in early 2020. Which has NOT been removed.

The US Treasury 10Y-2Y yield curve just inverted.

No, this is not a real ECB currency, but it might as well be.

Ted Day! Spread Between 3M Libor And 3M Treasury Yield Rising Fast (Recession Alert!)

Its Ted Day!

TED refers to the difference between the three-month Treasury bill and the three-month LIBOR based in U.S. dollars, a measure of fear in the market.

The 3-month TED spread is rising awfully fast. A sign of impending recession.

US bank credit default swaps (CDS) are rising fast as inflation gets ugly.

The US Treasury 10Y-3M curve is bumping against the zero barrier.

I am still shaking my head at President Biden chastising gasoline stations for not lowering prices at the pump when refiners are near full capacity and the Biden Administration is doing nothing to increase the supply of US-source non-green energy.

But what the heck. It’s Ted Day!

The End? Home Sellers Are Slashing Prices in Sudden Halt to Fed’s Stimulypto Boom (Dallas, Phoenix AZ And Las Vegas NV Seeing >20% Price Cuts)

As The Fed raises rates in their attempt to wrangle inflation, we are seeing an about-face in the US housing market.

The pandemic-related Fed monetary stimulypto begat a housing boom that is careening to a halt as the fastest-rising mortgage rates in at least half a century upend affordability for homebuyers, catching many sellers wrong-footed with prices that are too high. It’s an astonishing turnaround. Just a few months ago, house hunters felt pushed to make offers within days, waive inspections and bid way above asking. Now they can sleep on it and maybe even shop for a better deal.

It doesn’t mean real estate is heading for a crash on the order of 2008. But when a market reaches these heights, even a drop toward normalcy will feel steep. And of course, a recession could make everything worse.

Dallas, Phoenix AZ and Las Vegas NV are leading in the price-slashing derby.

Is this the end for the home price bubble?

Or is the music over with The Fed tightening monetary policy to fight inflation.

Slip, Slidin’ Away! US Q2 Real GDP Descends To -2.1% (Late In The Evening For The Midterm Elections!)

Slip slidin’ away
Slip slidin’ away
You know the nearer the midterm elections
The more you’re slip slidin’ away

As Bill Clinton once said about elections, “It’s the economy, stupid.”

Which is bad news for Biden and Democrats after Q1’s bad GDP report of -1.6% “growth”, we now see the Atlanta Fed’s real-time GDP report for Q2 at -2.1%.

Today’s miserable construction spending report helped tank Q2’s real GDP forecast.

Its getting late in the evening since the midterms are only a couple of months away and Biden’s approval rating is miserable.

Sing it, Joe!

S&P 500 Posts Worst First Half Rout Since 1970 As 10Y Treasury Yield Tanks 14 Basis Points (Biden Approval Drops To 38.3% On Rising Inflation, Gasoline Prices)

Run runaway! For safety to Treasuries.

A “recession shock” begins for markets following the worst first-half for the S&P 500 in more than 50 years.

And investors are running to Treasuries for safety as US Treasury 10-year yields tank 14 basis points.

Biden’s approval rating has collapse with inflation and rising gasoline prices. Note that Biden’s approval rating dropped below 50 in mid-August 2021, long before the Russian invasion of Ukraine in late February 2022. Gasoline prices had risen 49% since Biden’s inauguration as President, but before the Russian invasion of Ukraine.

Winter is coming!

Slowing! US Personal Consumption Expenditures Drop To 0.2% MoM In May As PCE Deflator Hits 6.3% YoY (US Mortgage Rates Slip to 5.7%, the First Decline in Four Weeks)

The US economy is slowing as inflation ravages consumers. US Regular Gasoline prices, for example, are up 104% under President Biden which helps to slow the economy.

US personal consumption expenditures fell to +0.2% MoM in May as “inflation” or real personal consumption expenditures PRICES rose +6.3% YoY as The Fed’s balance sheet (aka, Master Blaster!) remains.

As I mentioned above, US regular gasoline prices are UP 103% under President Biden, diesel prices (the cost of shipping goods to markets like … food is up 119% under Biden while CRB foodstuffs is up 55% under China Joe.

Now we have mortgage rates in the US falling for the first time in four weeks. The average for a 30-year loan was 5.7%, down from 5.81% last week, Freddie Mac said in a statement Thursday.

This year’s Fourth of July celebration is going to cost 18% more than last year’s celebration.

Lastly, the Atlanta Fed GDPNow real time tracker for Q2 is showing … -1% GDP “growth.”

So, yes, the US economy is slowing.

Nothing From Nothing! US Q1 GDP Falls To -1.6% QoQ As GDP Price Index Soars To 8.2% With Massive Fed Stimulus

Nothing from nothing beats the numbers coming out of Washington DC.

Despite enormous Fed monetary stimulus, Q1 Real GDP fell to -1.6% QoQ while prices rose 8.2%.

And if it weren’t for real estate, it would have been worse.

Personal consumption growth in real terms QoQ declined to 1.8% as Fed money printing slows.

Can the US economy survive without Uncle Spam’s printing press?

Fed Is ‘Just at the Beginning’ of Raising US Rates, Mester Says, MBA Mortgage Purchase Applications Drop -21% WoW As Rates Rise (Mester Channels The Carpenters)

Cleveland Fed’s Mester is channeling The Carpenter’s song “We’ve only just begun … to raise rates.”

Financial markets are anticipating what Mester is saying: rapidly rising interest rates. But as you can see from the following chart, gasoline prices (orange line) are driving rising US prices. So it is doubtful that monetary tightening will slow price increases. But Mester and company can only control monetary stimulus.

Mortgage rates have soared as The Fed attempts to crush inflation. And mortgage purchase applications fell -21% WoW in the most recent Mortgage Bankers Association survey.

The Refinance Index increased 2 percent from the previous week and was 80 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index decreased 21 percent compared with the previous week and was 24 percent lower than the same week one year ago.

It almost seems like Mester is following the Taylor Rule (not really). But using CPI YoY, the Taylor Rule is saying that The Fed Funds Target Rate should be … 22.10%. It is only 1.75% after years of excessive stimulus following the banking crisis of 2008/2009. And Yellen who seemingly never met a rate hike that she liked.

If we use core PCE as our measure of inflation, the Taylor Rule is still high at 13.25%, a whopping 11.50 spread over the current target rate.

Will The Fed drive up rates and risk a recession ala Paul Volcker? Are we sitting on top of the world or about to get fried?

Bear in mind that gasoline prices are up 104% under the Biden Administration and mortgage rates are up 105%.

The Thrill Is Gone! Richmond Fed Index Plummets To Covid-era Levels (Conference Board’s Consumer Confidence Falls Below 100) As Fed Withdraws Stimulus

It took a while and trillions in fiscal and monetary stimulus to recover from Covid-era economic lockdowns, but now that the monetary stimulus is being withdrawn, the economy is stalling.

If you look at the chart below, you can see that “The Thrill Is Gone” from monetary and fiscal stimulus.

And The Conference Board’s Consumer Confidence Index fell below 100 as M2 Money Stock YoY returns to pre-Covid levels.

You are gonna have to face it, we’re addicted to gov (stimulus).