Economists pushing the narrative that Real GDP growth will climb back to mid-single-digit percentages in 2022 have got it wrong. The combination of persistent price inflation and weak labor participation will ensure that Real GDP remains range bound between zero and 2%. The sooner Wall Street pundits learn to say "Stagflation" the more honest conversation … Continue reading Real GDP Growth Will Not Rebound In 2022
Tag: labor participation
The U.S. Bureau of Labor Statistics ("BLS"), publishes the Labor Participation Rate each month. The Labor Participation Rate accurately reflects the state of labor in the United States. The same government agency also publishes the Unemployment Rate each month (due Friday June 4th). We view the latter as a Government marketing metric as it significantly … Continue reading Labor Participation Outlook: June 2021Premium
Low wage services jobs are difficult to fill as we recently wrote (we continue to collect anecdotal data that supports our prior writing). Workers are choosing to stay home and collect Federal unemployment benefits rather than be productive. The moral hazard we warned of months ago is here. Should Biden and The Fed choose to … Continue reading Workers Choose To Collect Federal Unemployment Benefits Rather Than Work
The three-headed Hydra of low labor participation, increased debt levels and higher taxes will cripple U.S. long-term Real GDP growth for decades. Labor participation is not going back to December 2019 levels. To believe that scenario is wishful thinking. For starters, 25% of restaurants and bars are permanently closed. Those jobs are not returning. Second, … Continue reading Brace for Anemic Long-Term Real GDP Growth
The Fed would have us believe "There's nothing to see here," (to quote Frank Drebin), as it relates to inflation. Consumer spending funded by government debt is of inferior quality as compared to spending funded by increased production. In January Americans spent their debt-funded government checks that were mailed out at the end of December. … Continue reading Long Rates Continue To Climb As Inflation Persists. Nothing To See Here.