Study: Work requirements for SNAP don’t increase employment numbers

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They’re not meant to, they are an ideological tool to re-enforce the (false) belief that poverty is a personal moral failing.

OrderlyPanic

Well what do you know, if there’s only a certain number of job openings, it doesn’t matter how incentivized everyone is in getting a job, you’ll have the same number of people unemployed. It’s musical chairs. While it’s *possible* to create another chair (start a new company or something), I wouldn’t fault the unemployed to not have the wherewithal to do so.

luminarium

CPI Megathread: Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in May, 5% over the last 12 months

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I would think at least a decent chunk of this is driven by supply chain disruptions; the new and used auto figures in particular seem to point to this. In my opinion, this is not really money supply driven, at least not entirely.

BiznessCasual

Third month in a row over the 2% target. Getting harder to use base effect.

Fed tapered QE last time unemployment was this low.

Still don’t believe shelter costs only up 2.2% YoY.

fromks

The economy showed continued signs of transitory inflation in May, driven by used car prices and transportation services. This report was pretty much in line with the April report. All items rose 0.6% and core prices rose 0.7% from April. Used car prices were up 7.3% on the month and transportation services were up 1.5%.

Excluding used car prices, all items were up 0.4%, which shows that price increases are still being driven by the lack of computer chips for new cars.

Transportation services price increases are a key sign that there is a backlog of goods to be shipped to market as the economy re-opens.

Shelter was a big question market coming into May. It comprises more than 30% of all items. Prices rose 0.3% vs. 0.4% in April. Investors are keeping a close eye on this in the coming months.

Core inflation for the month of May was 0.7% vs 0.9% in April, indicating that price increases may have peaked, although it is too soon to tell.

Year over year core prices rose 3.8% and all items rose 5.0%. While alarming at first, used car prices alone accounted for approximately 1 full per centage point of core prices and 0.8 for all items. Excluding used car prices, core inflation was approximately 2.8% and all items were approximately 4.2%.

Energy prices were flat versus April, but up 28.5% yoy.

iKickdaBass

Amazing how many comments here are saying this is transitory. There is no way.

Supply constraints will not be temporary. If anything they are getting worse due to Covid outbreaks in key exporters, cyber attacks and other Covid related disruptions. That’s not even counting China simply cutting off supply to hurt the US as part of the US/China escalation. They have a vested interest in driving up prices in the US so that people lose faith in the dollar and move into another China backed or world currency. This will take time to play out but the Chinese government will see this as way to expedite the process.

Wage rate increases are also extremely inflationary. Economists even going back to Marx have understood this as a primary driver. I’m a small business owner myself and I can tell you the labour shortages and subsequent wage increases are definitely NOT going to be transitory. Once they go up they are very hard to take away. The mainstream economists/Fed are underestimating how much people reevaluated their lives during the Pandemic (over 50% of the labour force became unemployed at some point!!). This has a massive psychological and sometimes debilitating effect. They are underestimating the extent to which people are unwilling to go back to shitty jobs with shitty pay and/or are finding different ways to make money (Crypto trading, Only fans, Hiring out their cars, Roll ups, living with parents while taking unemployment cheques etc. etc.) Listen to people on the ground and this is obvious.

Business owners will have to raise wages to compensate and we are already seeing this in the data. So we’re going to see cost push and also demand pull due to the rapidly increasing money supply. Fed has stopped releasing M4 money supply data once it started going stratospheric! That basically means that they are hiding the fact that it’s probably growing even more now. They are desperately trying to manage inflation expectations.

Another thing I already see on the ground anecdotally and also in the mainstream press is the “inflation mindset”. People are beginning to expect higher prices which will lead to even more inflationary pressure. I’ve heard lots of comments recently about classic cars from people saying, “I’m going to go and buy it now because I know it will go up in value.”

Mainstream commentators are saying that “well, the bond markets are suggesting inflation is transitory” due to the fact yields on US 10 Year Treasuries have barely moved based on this print of 5%. Nor have the equity markets reacted. But they are failing to take into account that the Fed and government now owns more than $10 trillion worth of US government debt!! That’s more than foreign countries. This means the bond market should be almost totally disregarded as an indicator of future inflation. Fed will buy no matter what so why would prices drop precipitously?

Its pretty obvious to me that inflation will continue to rise and become more out of control this summer until the Fed is forced to taper and possibly lower rates come October/September.

Left leaning economists tend to look at wage growth as the primary indicator, right wing/libertarian types tend to focus on money supply growth. Both viewpoints are screaming inflation.

If I had to guess I’d say they will use the inevitable mutation of Covid variants as an excuse for the tapering so people blame a downturn on that rather than the Fed. Covid cases will start to rise again at the end of the summer due to Covid variants evading vaccines and also the high levels of vaccine hesitancy in the US so I think this is when they will begin tapering.

This means markets will correct significantly. I’d say 30%+. The Fed will crap its pants again because they all know realistically they can’t taper long term because of the shear amount of leverage in the system. They will see the drop then go into another even bigger round of QE to prop everything up, probably going full Japan style and buying equities directly. Markets will then rise again and probably go even higher than they are now.

What this means for the average investor is, stay in cash right now. Don’t be fooled into the inflation mindset. Wait for the dip and buy in.

Odd_Green_3775

What’s the rate vs. 2019? Struggling to find that in any of these reports.

edit: NVM, 2.6% / year vs. May 2019.

_Pointless_

Small businesses’ share of private sector employment has decreased by 5.8% since 1993

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This is significant for a few reasons.

1. There are many times more new small business created everyday than there are large corporations being created.

2. This outlines the conflict employees have to make in choosing an employer. Choosing an employer is a lot more than choosing a paycheck. It’s also determining what health benefits you will have, retirement benefits, life insurance options, work-life balance, feeling of accomplishment, and so much more.

My wife recently left her small company of 5 to go work for a company of 87000. The small company had promised work life balance, but in reality they were frequently busy and the owners constantly passed the buck down stream, making her life balance not as great.

Now she has affordable health insurance with good coverage, a 8% 401k match, 12 week paid maternity leave, 3 weeks of paid vacation and $20k more per year in salary.

It’s going to be near impossible for small businesses to keep up if corporations continue to grow at the pace they are.

TheVanMan2345

The one factor i always think about with entrepreneurship in the US is healthcare insurance coverage. For would-be entrepreneurs i know, that’s the single biggest hurdle to staking out on their own. Healthcare costs have risen quite a bit in the last few decades. Decent coverage today for a family can add 1000 or more a month to household expenses and, if you’re unsure about the upside of starting your business, that can loom large. And that’s not even to mention some of the other benefits you might miss out on as an entrepreneur (dental, vision, life).

doryphorus99

Seems like a pretty small decline for such a long time period, but what do I know

WarpedSt

Every rule, every regulation, every tax and fee creates a business environment that favors the mega-corporation that we scream we hate (after buying their product).

Uncle_Bill

Why are there all these comments talking about entrepreneurship? This is about consolidation of power.

Richandler

Higher interest rates would be good for the country, Treasury Secretary Yellen says

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Good for who? She gives no explanation. I’m curious why she thinks increasing the cost of borrowing will help when we’re still recovering from the forced shutdown. Small business has been devastated, and making it harder to pay those notes is good how?

canonmp11dx

Putting two and two together: 1. That she says spend big over the next couple years because borrowing costs are low. 2. higher rates would be good for the country.

She must have an understanding that the Fed will lean in hard with yield curve control to manage the short and long end?

QueefyConQueso

Interest rates set too low (last 20 years) inflate home prices more than any other factor. The chasm between landowners and others (lords and peasants) is the single biggest contributor to the wealth gap which is tearing western counties apart.

Rates have to go WAY up and stay there for decades to work out of the financial system all the rot of zombie banks, toxic loans, and speculation which is crippling the aspirations of millions and the economy as a whole.

Inertial_Mass

I can tell you who it won’t be good for and that is the federal and state governments so it’s not going to happen anytime in the near future. I honestly can’t even see us returning to 2 or 3% with out shit blowing up let alone 5% like before the housing crisis.

76before84

lol thats not going to happen. loan growth has slowed to a crawl

bamfalamfa

Yellen Says Higher Interest Rates Would Be ‘Plus’ for U.S., Fed

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The Fed wants commercial banks to start loaning more money. The commercial banks won’t start doing it until interest rates are higher. However the government has to pay so much interest on our mountain of national debt if interest rates go higher. I feel like higher inflation is inevitable

pewwpewpew

>The debate around inflation has intensified in recent months, between those like Yellen who argue that current price increases are being driven by transitory anomalies created by the pandemic — such as supply-chain bottlenecks and a surge in spending as economies reopen

If inflation was merely because of supply side shocks than how come only the US is seeing it this high? The closest is Canada with 3.4% and they’re tied to the US economy.

ZmeiOtPirin

A long time ago, people’s retirement plans were wrapped up in pensions they earned from their employers. Those pensions went away and were replaced by 401k’s, 457’s, 403b’s, and the like. In other words, retirement moved from defined benefits to the stock market. Fast forward to a world where virtually everyone depends on the stock market to both grow and harvest their nest egg, and you end up in a world of low interest rate incentives.

Any administration, R or D has no desire at this point to raise rates. By keeping rates near zero and driving fixed income instrument into the ground, the government does a de facto torrent into equities. Boomers who are at, in, or near retirement, all want to see that nest egg continuing to grow. Oh and they tend to vote in every election. And they remember the crash from 2008. So do the politicians. After all, we had a major swing in government following that.

(Obligatory yes, I know, there were many factors including the steady drum beat of war dead from Iraq and Afghanistan that contributed. But as we saw from George H.W. Bush’s loss to Clinton, all it takes is a sharp economic drop to get voters to change their mind.)

Rocketsponge

I always liked her as Fed Chair. Personally I cannot stand Powell, I just smell Wall Street lawyer everytime I see him.

TlfT

With the public debt over $30T, every percentage point will come with $300B in interest payments. Can America pay the $1.5T annual interest that would come with a 5% rate? That would be half our annual tax receipts.

The Fed’s back is against a wall. They can never significantly raise interest rates.

volune

Global food prices rise to highest level in a decade

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Yeah, the “inflation is good, and it’s good we clip food inflation from our CPI data because it doesn’t matter to our monetary policy” is a terribly ethnocentric and nationalistic view to have.

This is how revolutions are made. Particularly if the West turns a blind eye to it while wallowing over its prices for used cars and PC video cards.

There has been some studies and, iirc, when food becomes 60, 75, 80% of a people’s total income? The cost to benefit ratio of taking up arms and forcing a regime change becomes much more attractive, even before widespread hunger sets in.

If our policies dictate a global bid up in food prices to save ourselves, ok. If that’s the corner we backed ourselves into, it is what it is.

But we need to collectively act to alleviate the pressure on those peoples that get caught up in our tsunamis of food commodity inflating policy, even if we refuse to recognize food price rises as inflation in our own jurisdictions.

QueefyConQueso

Just go through other threads here on prices. Nobody cares since CPI is showing transitory inflation. Food? Who needs that. No need to have it in the CPI

CrossfadeAMV

Until they rise again three times before new year. While wages stay stagnant for the 7th decade.
But MiLlEnNiAlS ArE JuSt EnTiTleD.
Yeah i’m sorry i want to be able to afford to stay alive with the compensation i get for working long ass hours.
I’m such a spoiled child.

SpiritBadger

Several very smug individuals here were quick to parrot the Fed jawboning that rapidly rising inflation is merely temporary. Now I assume they will backpedal attempting to redefine temporary as will the Fed. So what is it, six months, a year, three or even five years?

PeachCatFuzz

They will rise even more as less oil and gas development drives up energy costs.

aas013

European Companies to Invest More in China After Pandemic

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Isn’t the Euro formed to tackle exactly these kind of issues? They can provide incentives to keep and invest things in the region.

yalogin

I’m honestly surprised how many people completely do not understand China today in a subreddit called economics. Other than China bad, China cheap labor. Like are we so blinded by our media that we plainly do not understand productivity, real wage and geopolitics?

China is competitive in exports because they make high quality goods at competitive prices and have world class infrastructure, a stable political environment and an educated hard working population, and their productivity is constantly rising.

They are an attractive market, because they are now market leaders in many, if not most, high end and low end goods and everything in between. US tries to paint China in a broad negative stroke when in fact it is a hugely dynamic, successful and complex country.

Militaryrankings

US would likely need to win the next tech race to overcome China at this point. Britain was at the top because of their new technologies, same for the US in the past having the best infrastructure left around after WW2. Today China seems to have all the economic advantages, and the only way for the US to produce everything cheaper would be with another technological revolution ahead of the competition.

dhruvnegisblog

American companies will be doing the same. There is going to be a lot of cash going into China for the next year or two. It was well understood that this was going to happen by people watching the Chinese economy.

Richandler

Why would you support anything they do? There’s nothing worth investing in from a corrupt nation like China. If you want a solid investment, just look into Computing, the US is the leader in selling computer products and components. IBM is one of the biggest that absolutely dominates the tech space

DOugdimmadab1337

Job openings soar to record 9.3 million in April – CNN

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I wonder what the downstream effects of this are going to be a year from now.

Will real wages increase? Will inflation really take off? And, of course, will this have any effect on the 2022 midterms?

Skeptix_907

It could be that most of the jobs unfilled are dead end jobs and most people realized that more so than before with time off to reflect on their career choice.

Ok-Feeling-924

Good time to go job hunting and get a pay raise. We all know companies won’t be increasing current workers pay above inflation so better shine up that resume.

azdood85

Covid really shook up the economy as well as people’s perception. I’d say probably the biggest and quickest shock since the end of WW II. Jobs open but not getting filled will have multiple causes and not just the knee jerk ‘bums on unemployment.’

One of many reasons is that some people are out of the labor force, maybe it’s childcare, maybe it’s Covid fears or maybe it’s simply not working because they don’t want to or need the extra money since there’s no place to spend it.

Someone who was working in a restaurant may have switched to food delivery and realized that there’s not 90 minutes of post shift cleaning and they’re done at a decent hour. You park the car and you’re done.

dalej42

Most of these articles seem to have a similar statement from employers, “We have openings but no one is applying,” and then blame it on the extra unemployment benefits. I can tell you that here in upstate NY around Albany there are plenty of manufacturing jobs open but the starting pay is typically about $1-2 over minimum wage. Why would anyone want to even apply for these jobs? Even fast food places are advertising well over minimum wage to try to get people.

armymike

Half of the pandemic’s unemployment money may have been stolen

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The only source cited for this claim:

> By the numbers: Blake Hall, CEO of ID.me, a service that tries to prevent this kind of fraud, tells Axios that America has lost more than $400 billion to fraudulent claims. As much as 50% of all unemployment monies might have been stolen, he says.

No other info is available. And this CEO is hardly the most impartial source given that his company’s success is directly correlated with the perceived size of the problem.

Ray192

Quotes from two people who sell products to fight this type of fraud. Smells of bias.

If this money left the country, does that mean inflation is less of a risk than I’m paranoid about?

If the 50% number is accurate, that’s still huge to the recipients of the valid 50%. Sure I’d like to see this closer to 95/100%…

apalebear

So many claims (mostly by identity proofing companies hawking their wares), so little actual evidence.

Which isn’t to say there hasn’t been a lot of it… reputable sources are estimating something like ~$65 billion.

hacksoncode

It was known back in June ’20 when White House allowed looting of the treasury. When non-qualified businesses & individuals were grabbing free dough.

VonDerBerg

“Company that makes money by finding fraud “guesses” there’s a huge amount of fraud”

Robincapitalists

In a world first, El Salvador makes bitcoin legal tender

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Seeing as El Salvador is a net importer of goods, what prevents a net capital outflow of Bitcoin from the country?

I know not all international commerce conducted with El Salvador will be done in Bitcoin, but hypothetically how would they ensure they always have sufficient supply of Bitcoin to export in exchange of physical goods?

CaptainPequod

Now we finally get to see the acid test of crypto. The real question is will buyers actually use it. The fact that it’s legal tender isn’t really relevant if it never gets used this way, because cryptos largest value proposition is that it’s a more efficient currency. If nobody actually buys anything with it, which I personally suspect will be the case in El Salvador, then the whole model is thrown into question. It’ll take a few weeks or more to see how broad use and adoption really is.

Far-Protection-4086

No coiners, you people never change. You can lead a horse to water…

paper_bull

I’ve never seen so much Bitcoin misinformation and FUD since I last watched MSNBC in 2017.

danllo2

That’ll be 0.00013 BTC. No wait it’s 0.00024. Hold on it’s 0.00009.

Wolfeman0101