The US job force shrank by 363,000 people in April, the Labor Department said Friday. The labor force participation rate, or the share of American adults working or looking for a job, ticked down to 62.2% in April from 62.4% in March. ”
The lockdowns of the devastation are still with us: a demoralized workforce, women with children slow to come back, a childcare shortage, men with scaled back their professional ambitions to live off savings and accumulate debt, plus a litany of general disruption. life is not fixed.
As for this week’s GDP numbers, we all surely know that “GDP” means almost nothing, except that it means everything. More often than not, it is a purely technical measure, easily distorted by crazy inclusions and exclusions. On the other hand, data reporting alone has a huge psychological effect on markets and investor sentiment. One more quarter and the recession will be officially declared.
Two things about that. 1) If we get a second quarter negative numbers, absolutely everyone in mainstream financial media will be united in messaging that is purely a technical and very mild recession, if it is a recession at all. They will be out in full force to dial back the worry and panic. 2) It is more correct to say that we are actually entering the third year of an authentic recession. We just don’t see it in official data, due to wild government spending and money printing.
There are, however, some pieces of data that the government cannot hide. Let’s look at the latest punch in the chops: real disposable personal income. This is the stuff that people actually care about, unlike GDP. Because it directly affects their lives. Here we see the biggest shell game in modern history of government fiscal and monetary policy.
It shows that: we were rich! And then we weren’t. They gave us lots of money! Then they took all of that money away from a huge slice of purchasing power. If there is a case for mass outrage, this is it. Sadly, most people can’t figure this out. This is the cause and effect of the opaque and the lines of the TikTok generation.
We know what happened now, thanks to reporting from March. This is a beautiful yet terrifying picture of trickery and robbery.
Now let’s flow the data a bit differently, looking at the percentage change year over year. You can see here how quickly everyone caught up with this. The valley mirrors the peak almost exactly.
And guess what? Inflation is still rocking in real time, right now running at 11% according to The Data Tracker at Truflation (which I’ve come to trust). That’s a little pullback from a month ago but nothing to celebrate. And there is every indication that this problem will get worse over the summer. So you can take a ruler and plop it down to the top chart and draw a line.
Here’s a perfect picture of why so many of the not-so-ridiculously-rich people are now in seething. They sense prosperity draining away. They’re spending and collecting debt like there’s no tomorrow. And that’s because there are widespread expectations that are going to be worse tomorrow.
Consumer confidence is now lower than the depth of lockdowns. And this is because the policy has done nothing but repair the grotesque damage and make it worse.
And Yet The Flowers Bloom
Spring has bloomed all over the country and people are out and about rediscovering the meaning and beauty of life. It’s a happy time that masks deep hurt and depression. In the South and most of the West, apart from crazy California, there are no masks to be found.
In the Northeast, there are still some sad sacks out and about wearing masks, probably 5-10% of the population that are still very confused. They got vaccinated and boosted and maybe boosted again and still got Covid. They mask up, they don’t want to get it again, completely oblivious to the reality that natural infection is protective, while mask is not.
The truth is that public health messaging for two years has been nothing but obfuscation and duplicity. As a result, we lost many souls and people lost their minds too.
Still, it’s great that the pandemic is officially over. But we may ask why. It’s true that seroprevalence studies show that 60% of the population has contracted and overcome covid. Another way to say that: The two years of the kabuki dance are nothing short of inevitable.
The pandemic’s end is partly political for the real reason. The DNC has just announced its polling that faces it in absolute political calamity. The party is flying into action, doing its best to dramatically change the public mood.
The CDC went along and changed the color coding of its inflation map and what it says is that there are no more infections, only deaths. Another seasonal downturn in We Are Now, so it works out.
This leaves the opening of a complete repeat of the hysteria starting after November, according to the results of the midterms. The ruling class now has full confidence that it can turn panic and turn it off in a matter of weeks, with just the right messaging. Will anyone believe them next time? Maybe…
In the meantime, spring has sprung, the flowers look sweet, and people are glad to have a return to normalcy, no matter how degraded it is three years ago. If you would leave the markets alone, the recovery could be real. But there is almost no chance of that, regardless of who takes control of the state in November.
There are so many lessons to be learned from this remarkable episode in the history of what it is like when the government appears to be giving you something for free – stuffing your bank account full of money make you pay dearly for it later.