Labor Force Participation  – Weak

Labor Force Participation – Weak

Blame the various COVID relief packages for the weak labor force participation rate – 62.5% in February, up from 62.4% in January but down from 63.3% in February 2020 pre-pandemic. This at a time when the Biden Administration is proposing a $7 trillion budget. I’m not sure where demand for U.S. Treasuries to fund this budget is supposed to come from. A flood of Treasury issuances later this year and next will help keep interest rates high at a time when labor force participation / productivity is weak combined with a soaring debt load. A perfect recipe for persistent stagflation.