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.

• Total nonfarm payroll propaganda: https://www.bls.gov/news.release/empsit.nr0.htm
• Labor force participation: https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm
• COVID relief spending through Jan. 31st 2023: https://www.usaspending.gov/disaster/covid-19?publicLaw=all

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