Economic and jobs news thread

[Yuli Ban]

China’s economy looks especially vulnerable to the spread of Omicron

Since the end of May, China has recorded 7,728 covid-19 infections. America has recorded 15.2m. And yet China’s curbs on movement and gathering have been tighter, especially near outbreaks (see chart 1). Its policy of “zero tolerance” towards covid-19 also entails limited tolerance for international travel. It requires visitors to endure a quarantine of at least 14 days in an assigned hotel. The number of mainlanders crossing the border has dropped by 99%, according to Wind, a data provider.


These restrictions have stopped previous variants from spreading. But periodic local lockdowns have also depressed consumption, especially of services like catering. And the restrictions on cross-border travel will inflict unseen damage on innovation. Cutting business-travel spending in half is as bad for a country’s productivity as cutting r&d spending by a quarter, according to one study by Mariacristina Piva of the Università Cattolica del Sacro Cuore in Milan and her co-authors.

If the Omicron variant is more infectious than other strains, it will increase the likelihood of covid-19 outbreaks in China, leading to more frequent lockdowns. If the restrictions were as severe as those China briefly imposed in mid-August, when it was fighting an outbreak that began in the city of Nanjing, the toll on growth could be considerable. If imposed for an entire quarter, the curbs could subtract almost $130bn from China’s gdp, according to our calculations based on a model of lockdowns by Goldman Sachs, a bank—equivalent to around 3% of quarterly output.

Omicron is not the only threat to China’s economy. Even before its emergence, most forecasters thought that China’s growth would slow to 4.5-5.5% next year, as a crackdown on private business and a property slowdown bite.

Edit: Ayyy, 2112 posts. Rush number.

[erowind]

.

[caltrek]

Meanwhile, on the inflation front back in the U.S.A.:

Blame Corporate Greed for Inflation
by Sarah Baron
December 1, 2021

https://otherwords.org/blame-corporate- ... inflation/

Introduction:

(Other Words) With vaccination rates on the rise, Americans are hoping for a return to some semblance of normalcy this holiday season. Unfortunately, as people start traveling more and buying holiday gifts, we’re facing supply chain disruptions and rising costs, from gas to groceries.

Recent polling shows that 92 percent of Americans across party lines are concerned about rising inflation, especially when it comes to groceries and gas prices. The top concern for 89 percent of those surveyed is the rising cost of groceries, where it’s harder for families to cut costs.

It would be easy to blame President Biden, but that’s just not the case. In fact, wages have increased more in the last three months than they have in the past 20 years, and millions of Americans are back to work due to his administration’s successes.

The truth is big corporations and their ultra-rich CEOs are exploiting consumers.

Big corporations have been making record profits during the pandemic. And in a year when the majority of people struggled to get by, CEOs have only gotten richer. They’ve taken every opportunity to further pad their own pockets.

[caltrek]

The One Percent Move Report- What Happened in the Markets?
December 2, 2021

https://www.morganstanley.com/content/m ... e-20211202

Introduction:

(Morgan Stanley)

• US stocks traded higher on Thursday as the S&P 500 gained 1.4% to close at 4,577. With the rally, the index is now up 21.9% year to date.

• The back and forth trading action in US equity markets continues, with the major averages rebounding on Thursday following back-to-back declines in the prior two sessions. The S&P 500 has now had five straight sessions of greater than 1% moves, the longest such streak in more than a year. Volatility has picked up as markets grapple with the newfound risks related to the Omicron variant as well as speculation around a potential hawkish pivot from the Federal Reserve. While cyclical sectors have largely lagged recently, on Thursday cyclicals and travel-oriented equities led the market higher.Treasury bonds also sold off across the curve as yields moved higher. Looking ahead, markets will focus on continued Omicron developments and economic data will be back in focus with Friday's November non-farm payrolls release.

• All 11 S&P 500 sectors were higher on the session, with Industrials (+2.9%) and Energy (+2.9%) outperforming the broader market, while Consumer Staples (+0.8%) and Health Care (+0.4%) lagged.

• Rates were higher across the curve, with the 10-year Treasury yield rising to 1.43% as of the 4 p.m. equity market close. Gold was modestly lower on the day while WTI was higher at $67 per barrel. The US Dollar was modestly stronger on the trading session, as measured by the US Dollar index.

[wjfox]

[weatheriscool]

U.S. economy adds just 210,000 jobs in November
Source: Washington Post

The U.S. economy added just 210,000 jobs in November, a disappointing month of growth that came as coronavirus cases began to rise in many parts of the country.Yet, the unemployment rate still dropped to 4.2 percent, from 4.6 percent.

October's strong report had raised hopes about a lengthy period of sustained growth, but coronavirus cases began rising the week that the surveys were taken. Supply chain issues and labor shortages remain a constraint on the economy as well. Economists had been predicting about 500,000 to 600,000 jobs for the month.

Still, economic growth has been encouraging this year so far: the country has been averaging adding more than 500,000 jobs a month, gaining back more than 5 million jobs lost in the early days of the pandemic.There have been positive signs recently as well. Weekly unemployment filings have trended steadily downward in recent months, even dipping below the pre-pandemic average to a new historical low the week before Thanksgiving.

The trade deficit in goods narrowed in October, and consumer spending increased at its fastest rate since March, according to estimates from the Commerce Department. The surveys on which the labor market data is based was taken during the second week of November, at the beginning of the recent rise in coronavirus cases, and weeks before concerns began rising about the new Omicron variant.

Read more: https://www.washingtonpost.com/business ... ment-2021/

[Yuli Ban]

[Nanotechandmorefuture]

WTF! It would be funny if it were not so horrifying. So much for a graduate getting it easier I guess since it looks like higher learning ain't making things easier.

[caltrek]

The One Percent Move Report- What Happened in the Markets?
December 2, 2021

https://www.morganstanley.com/content/m ... e-20211207

What Happened in the Markets?

• US stocks rallied on Tuesday as the S&P 500 gained 2.1% to close at 4,687. With the rally, the index is now up 24.8% year to date.

• US equities traded higher for the second day in a row as markets look to recover following back-to-back weeks of declines. US stocks opened sharply higher Tuesday morning and rallied throughout most of the session with gains led by growth-oriented technology stocks that had been recent laggards; the NASDAQ 100 ended Tuesday more than 3% higher. While there has been no obvious catalyst for this week's reversal, it would appear sentiment around Omicron is improving and may be driving markets higher. To that end, while too early to draw any conclusions, early data out of South Africa seems to suggest it is possible that while Omicron may be more transmissible than prior iterations of the virus, it may not lead to as severe outcomes; expect more conclusive data surrounding the risks posed by Omicron in the coming days and weeks.

• All 11 S&P 500 sectors were higher on the session, with Information Technology (+3.5%) and Consumer Discretionary (+2.4%) outperforming the broader market, while Utilities (+0.8%) and Consumer Staples (+0.2%) lagged.

• Rates were higher across the curve, with the 10-year Treasury yield rising to 1.45% as of the 4 p.m. equity market close. Gold was modestly higher on the day while WTI was also higher at nearly $72 per barrel. The US dollar was modestly weaker on the trading session, as measured by the US Dollar Index.

[caltrek]

Economic News Release

https://www.bls.gov/news.release/cpi.nr0.htm

Introduction:

U.S. Bureau of Labor Statistics-Consumer Price Index Summary

Transmission of material in this release is embargoed until
8:30 a.m. (ET) December 10, 2021 USDL-21-2101

Technical information: (202) 691-7000 • [email protected] • www.bls.gov/cpi
Media Contact: (202) 691-5902 • [email protected]

CONSUMER PRICE INDEX – NOVEMBER 2021

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8 percent
in November on a seasonally adjusted basis after rising 0.9 percent in October,
the U.S. Bureau of Labor Statistics reported today. Over the last 12 months,
the all items index increased 6.8 percent before seasonal adjustment.

The monthly all items seasonally adjusted increase was the result of broad
increases in most component indexes, similar to last month. The indexes for
gasoline, shelter, food, used cars and trucks, and new vehicles were among the
larger contributors. The energy index rose 3.5 percent in November as the
gasoline index increased 6.1 percent and the other major energy component
indexes also rose. The food index increased 0.7 percent as the index for food
at home rose 0.8 percent.

The index for all items less food and energy rose 0.5 percent in November
following a 0.6-percent increase in October. Along with shelter, used cars and
trucks, and new vehicles, the indexes for household furnishings and operations,
apparel, and airline fares were among those that increased. The indexes for
motor vehicle insurance, recreation, and communication all declined in November.

The all items index rose 6.8 percent for the 12 months ending October, the
largest 12-month increase since the period ending June 1982. The index for all
items less food and energy rose 4.9 percent over the last 12 months, while the
energy index rose 33.3 percent over the last year, and the food index increased
6.1 percent. These changes are the largest 12-month increases in at least 13
years in the respective series.

Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city average

Seasonally adjusted changes from
preceding month
Un-
adjusted
12-mos.
May June July Aug. Sep. Oct. Nov. ended
2021 2021 2021 2021 2021 2021 2021 Nov.
2021

All items.................. .6 .9 .5 .3 .4 .9 .8 6.8
Food...................... .4 .8 .7 .4 .9 .9 .7 6.1
Food at home............. .4 .8 .7 .4 1.2 1.0 .8 6.4
Food away from home (1).. .6 .7 .8 .4 .5 .8 .6 5.8
Energy.................... .0 1.5 1.6 2.0 1.3 4.8 3.5 33.3
Energy commodities....... -.6 2.6 2.3 2.7 1.3 6.2 5.9 57.5
Gasoline (all types).... -.7 2.5 2.4 2.8 1.2 6.1 6.1 58.1
Fuel oil (1)............ 2.1 2.9 .6 -2.1 3.9 12.3 3.5 59.3
Energy services.......... .7 .2 .8 1.1 1.2 3.0 .3 10.7
Electricity............. .3 -.3 .4 1.0 .8 1.8 .3 6.5
Utility (piped) gas
service.............. 1.7 1.7 2.2 1.6 2.7 6.6 .6 25.1
All items less food and
energy................. .7 .9 .3 .1 .2 .6 .5 4.9
Commodities less food and
energy commodities.... 1.8 2.2 .5 .3 .2 1.0 .9 9.4
New vehicles............ 1.6 2.0 1.7 1.2 1.3 1.4 1.1 11.1
Used cars and trucks.... 7.3 10.5 .2 -1.5 -.7 2.5 2.5 31.4
Apparel................. 1.2 .7 .0 .4 -1.1 .0 1.3 5.0
Medical care
commodities (1)...... .0 -.4 .2 -.2 .3 .6 .1 .2
Services less energy
services.............. .4 .4 .3 .0 .2 .4 .4 3.4
Shelter................. .3 .5 .4 .2 .4 .5 .5 3.8
Transportation services 1.5 1.5 -1.1 -2.3 -.5 .4 .7 3.9
Medical care services... -.1 .0 .3 .3 -.1 .5 .3 2.1

1 Not seasonally adjusted.


Food

The food index increased 0.7 percent in November after rising 0.9 percent in both
September and October. The food at home index increased 0.8 percent in November as
all six major grocery store food group indexes rose; this was the third consecutive
month that all six increased. The indexes for other food at home and for fruits and
vegetables both increased 1.0 percent in November. The index for meats, poultry,
fish, and eggs rose 0.9 percent in November. Within this group, the index for pork
rose sharply, increasing 2.2 percent, while the index for eggs declined in November,
falling 2.7 percent.

The cereals and bakery products index increased 0.8 percent in November after larger
increases in September and October. The index for dairy and related products
increased 0.2 percent over the month, the same increase as the prior month. The
index for nonalcoholic beverages also rose 0.2 percent, its smallest monthly
increase in the last 6 months.

The food away from home index rose 0.6 percent in November following a 0.8-percent
increase the prior month. The index for limited service meals continued to rise
sharply, increasing 1.0 percent over the month, while the index for full service
meals rose 0.4 percent in November.

The food at home index rose 6.4 percent over the past 12 months, the largest
12-month increase since the period ending December 2008. All of the six major
grocery store food group indexes increased over the period. The index for meats,
poultry, fish, and eggs increased 12.8 percent, with the index for beef rising
20.9 percent. The index for dairy and related products posted the smallest increase,
rising 1.6 percent over the last 12 months. The remaining major grocery store food
group indexes posted increases ranging from 4.0 percent (fruits and vegetables) to
5.7 percent (other food at home).

The index for food away from home rose 5.8 percent over the last year, the largest
12-month increase since the period ending January 1982. The index for limited
service meals rose 7.9 percent over the last 12 months, and the index for full
service meals rose 6.0 percent. The index for food at employee sites and schools,
in contrast, declined 44.9 percent over the past 12 months.

Energy

The energy index rose 3.5 percent in November after rising 4.8 percent in October.
The gasoline index rose 6.1 percent in November, the same increase as the prior
month. (Before seasonal adjustment, gasoline prices rose 2.8 percent in November.)
The electricity index increased 0.3 percent in November after rising 1.8 percent in
October. The index for natural gas rose 0.6 percent in November following a
6.6-percent increase the prior month.

The energy index rose 33.3 percent over the past 12 months with all major energy
component indexes increasing sharply. The gasoline index rose 58.1 percent over the
last year, its largest 12-month increase since the period ending April 1980. The
index for natural gas rose 25.1 percent over the last 12 months, and the electricity
index rose 6.5 percent.

All items less food and energy

The index for all items less food and energy rose 0.5 percent in November. The
shelter index increased 0.5 percent over the month, as the indexes for rent and
owners’ equivalent rent both rose 0.4 percent; these increases were the same as in
October. The index for lodging away from home rose 2.9 percent in November after
rising 1.4 percent in October. Vehicle indexes also continued to rise in November.
The index for used cars and trucks rose 2.5 percent over the month, the same
increase as in October. The index for new vehicles rose 1.1 percent in November
after a 1.4-percent increase in October.

The index for household furnishings and operations increased in November, rising
0.8 percent, the same increase as in October. The apparel index rose 1.3 percent
in November after being unchanged in October. The index for airline fares turned
up in November, rising 4.7 percent after declining in recent months.

The medical care index also rose in November, increasing 0.2 percent after rising
0.5 percent in October. The index for physicians’ services rose 0.4 percent, and
the index for prescription drugs increased 0.3 percent, while the index for hospital
services declined 0.3 percent.

A few indexes declined in November. The motor vehicle insurance index fell
0.8 percent over the month after being unchanged in October. The recreation index
fell 0.2 percent in November after rising in each of the last 9 months. The index
for communication also declined 0.2 percent in November.

The index for all items less food and energy rose 4.9 percent over the past
12 months, its largest 12-month increase since the period ending June 1991. The
index for used cars and trucks rose 31.4 percent over the last 12 months, and the
index for new vehicles rose 11.1 percent. The shelter index rose 3.8 percent, the
largest 12-month increase since the period ending June 2007. The index for medical
care increased 1.7 percent over the last year.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 6.8 percent over
the last 12 months to an index level of 277.948 (1982-84=100). For the month, the
index increased 0.5 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
increased 7.6 percent over the last 12 months to an index level of 273.042
(1982-84=100). For the month, the index rose 0.5 percent prior to seasonal
adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased
6.7 percent over the last 12 months. For the month, the index increased 0.5 percent
on a not seasonally adjusted basis. Please note that the indexes for the past
10 to 12 months are subject to revision.
_______________
The Consumer Price Index for December 2021 is scheduled to be released on Wednesday,
January 12, 2022 at 8:30 a.m. (ET).

caltrek's comment: I'm thinking for future updates we can just give the link. At any rate, being a government news release, length restrictions due to copyright considerations do not apply.

Also, at this link you can view a line graph provided courtesy of Axios:

https://www.axios.com/consumer-price-in ... 77394.html

[caltrek]

...and just in case that was not enough reading material for you to digest:

Meme Stock Hype Dies Down
by Courtenay Brown
December 10, 2021

https://www.axios.com/meme-stock-hype-d ... 7cc65.html

Introduction:

(Axios) GameStop and AMC are shedding that unprecedented Reddit day-trader chatter and those eye-popping stock swings — two defining factors for the meme stock cohort.

Why it matters: The hype for the OG meme stocks at the center of the pandemic-era phenomenon has died out.

The latest: GameStop’s stock dived 10% Thursday after the video game retailer disclosed it had been subpoenaed by the SEC related to an investigation into stock trading activity.

But there hasn’t been a plunge that steep since June — one sign that wild swings (to the downside or upside) have become less common.
By the numbers: A five-day moving average of GameStop's stock moves over the past year shows a daily shift of roughly 5%, as of Thursday. In February, that was as high as 74%.

[weatheriscool]

US inflation jumps 6.8% in November -- fastest rate in 39 years

Emily McCormick · Reporter
Fri, December 10, 2021, 8:45 AM

U.S. consumer prices rose at the fastest clip in nearly four decades last month, underscoring the persistently elevated inflationary pressures in the recovering economy.

The Labor Department's Consumer Price Index (CPI) climbed by 6.8% in November compared to last year, marking the fastest annual increase since June 1982. This rate matched consensus economists' estimates, according to Bloomberg data, but accelerated compared to the 6.2% year-over-year rate from the prior month.

Even excluding more volatile food and energy prices, the so-called core CPI rose by 4.9% over last year for the fastest increase in about three decades.

On a month-over-month basis, the CPI rose 0.8% in November, coming in ahead of the 0.7% rise anticipated. This also marked an eighteenth straight month of advances in the index. And excluding food and energy prices, the month-over-month CPI rose 0.5%, matching estimates and coming down by just a tick compared to October's 0.6% increase.

"Inflation is outpacing increases in household income and weighing heavily on consumer confidence, which is at a decade low," Greg McBride, chief financial analyst at Bankrate, wrote in an email on Friday. "It is only a matter of time before it impacts consumer spending in a material way."

Contributions to the CPI last month were broad-based, though price increases in gasoline, shelter, food and both new and used vehicles were some of the largest contributors.

Energy prices overall were up 3.5% in November over October for sixth consecutive monthly gain, as increasing consumer mobility during the reopening pushed up both demand and prices for fuel and other energy products. Gas prices alone were up 6.1% to match October's increase, and the gasoline price index was up about 58% over last year for its largest 12-month increase since 1980.

{snip}

Read more: https://finance.yahoo.com/news/consumer ... 29314.html

[caltrek]

The 1% Move Report
December 15, 2021

https://www.morganstanley.com/content/m ... e-20211215

Introduction:

(Morgan Stanley) What Happened in the Markets?

US stocks rallied on Wednesday as the S&P 500 (Standard and Poor's 500) gained 1.6% to close at 4,710. With the rally, the index is now up 25.4% year to date.

The Federal Reserve was the main focus for markets today as investors looked for clarity on the path forward for monetary policy. The December FOMC (Federal Open Market Committee) meeting came after several weeks of volatility that began with Fed Chair Powell suggesting to Congress that removal of accommodation could be accelerated. This hawkish pivot was confirmed, as the Fed committed to $30 billion of tapering per month and the dot plot indicated as many as 3 hikes in 2022. While equities traded lower to start the day, these losses quickly reversed after the 2pm FOMC statement as the Fed delivered an outcome that was largely in-line with consensus expectations. With the S&P 500 down 1.7% week-to-date after Tuesday's session, investors had positioned defensively into today’s meeting, setting the stage for a potential relief rally. Notably, the Fed indicated that it would continue to manage policy in-line with economic data and suggested that the removal of policy will remain gradual. With this risk event out of the way, equities gained, led by Tech stocks which reversed recent underperformance as the Nasdaq 100* rose more than 2%.

Ten of the 11 S&P 500 sectors were higher on the session, with Information Technology (+2.8%) and Health Care (+2.1%) outperforming the broader market, while Materials (+0.3%) and Energy (-0.4%) lagged.

Rates were higher across the curve, with the 10-year Treasury yield rising to 1.46% as of the 4 p.m. equity market close. Gold was modestly higher on the day while WTI was also higher at nearly $72 per barrel. The US dollar was modestly weaker on the trading session, as measured by the US Dollar Index.

*https://www.investopedia.com/terms/n/nasdaq.asp

[weatheriscool]

Kellogg's reaches tentative agreement with 1,400 striking workers
Source: CBS News

Kellogg's has reached a new tentative agreement with its 1,400 striking cereal plant workers that could bring an end to the strike that began October 5.

Members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union will vote on the new offer that includes cost-of-living adjustments and a $1.10 per hour raise for all employees on Sunday. Last week, the union overwhelmingly rejected a previous offer from the Battle Creek, Michigan-based company that included 3% raises, but only some employees would have received cost-of-living adjustments.

"We value all of our employees. They have enabled Kellogg to provide food to Americans for more than 115 years," said Kellogg Co. Chairman and CEO Steve Cahillane. "We are hopeful our employees will vote to ratify this contract and return to work."

The results of the contract vote are expected to be released Tuesday. Union officials declined to comment Thursday on the details of the new five-year deal.

Read more: https://www.msn.com/en-us/money/compani ... ar-AARVaXf

[weatheriscool]

Jobless claims: Another 206,000 individuals filed new claims, rising from 52-year low

Emily McCormick · Reporter
Thu, December 16, 2021, 8:30 AM

New weekly jobless claims ticked up slightly last week to hold near a 52-year low.

The Labor Department released its latest weekly jobless claims report Thursday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

-- Initial jobless claims, week ended Dec. 11: 206,000 vs. 200,000 expected and 184,000 during prior week

-- Continuing claims, week ended Dec. 4: 1.845 million vs. 1.943 million expected and 1.992 million during prior week

First-time unemployment filings fell sharply to reach their lowest level since 1969 in early December, coming in at a better-than-expected 184,000. As of last week, the four-week moving average for new claims -- which smooths out volatility in the weekly data - came in at the lowest level since March 2020, dropping by more than 21,000 on a week-over-week basis to reach 218,750.

And continuing claims, while still somewhat above pre-pandemic levels, have also come down sharply from their pandemic-era high. This metric tracking the total number of individuals claiming benefits across regular state programs peaked at more than 23 million in May 2020, but is expected to come in below 2 million for a third straight week in this week's report.

"After a bit of a gift in the recent sharp decline in seasonally adjusted new jobless claims, the expectation is that we may have to give back just a little of that progress this week," wrote Mark Hamrick, senior economic analyst at Bankrate, in a note on Wednesday. "Even so, the continued downward trek in new claims has been one of the pleasant surprises among economic themes this year."

The marked drop in new weekly jobless claims over the course of 2021 -- and especially in the past several weeks -- has served as one key indicator of the current tightness in the labor market.

But even as the rate of those newly unemployed per week sank to multi-decade lows, labor force participation has remained depressed compared to pre-virus levels, and job openings have held near record highs. The labor force participation rate last came in at 61.8% for November, or short of February 2020's 63.3%, and the size of the civilian labor force was still down by 2.4 million.

{snip}

Read more: https://finance.yahoo.com/news/weekly-u ... 22770.html

[caltrek]

The 1% Move Report
December 17, 2021

https://www.morganstanley.com/content/m ... e-20211217

Introduction:

(Morgan Stanley)
What Happened in the Markets?

• US stocks traded lower on Friday as the S&P 500 declined 1.0% to close at 4,621. With the sell-off, the index is now up 23.0% year to date.

• Equities traded lower on Friday as the S&P 500 has now declined in four of the past five trading sessions. There was no clear catalyst for the move lower into the weekend, though risks related to the Omicron variant appear to be continuing to weigh on markets, with New York setting a daily record for new cases on Friday. Outside of Omicron, the Federal Reserve has been in focus this week with Wednesday's meeting confirming the central bank's hawkish pivot as they accelerated the tapering of asset purchases; while markets staged a relief rally on Wednesday as the Fed announcement was largely in-line with market expectations, all of those gains were given back on Thursday and Friday. Cyclicals underperformed Friday after outperforming defensive and growth stocks on Thursday.

• All 11 S&P 500 sectors were lower on the session, with Real Estate (-0.3%) and Consumer Discretionary (-0.5%) outperforming the broader market, while Energy (-2.2%) and Financials (-2.3%) lagged.

• Rates were mixed across the curve, with the 10-year Treasury yield unchanged at 1.41% as of the 4 p.m. equity market close. Gold was flat on the day while WTI (Western Texas Intermediate) was lower at nearly $70 per barrel. The US dollar was modestly strong on the trading session, as measured by the US Dollar Index.

[caltrek]

Re: Inflation
by Rich Lowry

https://www.politico.com/news/magazine/ ... urd-525086

(Politico) President Joe Biden has the misfortune to be president at the moment when corporate America has decided to get together and gouge American consumers.

That, at least, is the story the White House and its allies, most prominently Sen. Elizabeth Warren (D-Mass.), want to tell.

caltrek's comment: Yes, because the problem is systemic in nature.

No one on the left seems to deny that supply chain disruptions are playing a role in inflation, but the focus on corporate greed is an absurdly reductive depiction of the U.S. economy — as if a broad-based, multicausal economic phenomenon is being mainly or at least significantly driven by a handful of corporate malefactors wielding nearly unchecked power over the consumer price index. It is a fairy tale transparently intended to shift the political blame for an economic discontent that is hobbling Biden’s presidency.

caltrek's comment: No...it is a realization that the problem is systemic in nature. Incidentally, that systemic problem looks remarkably like " handful of corporate malefactors wielding nearly unchecked power.

Did the American economy, after 30 years of notably low inflation, suddenly become more concentrated earlier this year, such that companies could arbitrarily jack up prices?

caltrek's comment: The author answers his own question:

And why was it that this economic power made itself felt just as supply chain disruptions took hold and the Democrats’ massive Covid relief bill further stoked demand in an already growing economy?

caltrek's comment: i.e. Covid. Yes, the economy was growing....until Covid caused it to shrink. How soon we forget.

If greedy corporations are to blame, they are at work across the board.

caltrek's comment: Yes, because the problem is systemic

It is true that most big companies have increased their profit margins.

caltrek's comment: Thank you.

But demand is higher than it was pre-pandemic in many sectors of the economy, providing a strong foundation for profitability, and a standard feature of an inflationary environment is companies seeing how much they can raise prices without hitting a wall of consumer resistance.

caltrek's comment: A systemic problem. One that is especially acute within the monopoly sector of the economy.

This is one reason it’s best not to have an inflationary environment in the first place.

caltrek's comment: Which is why there is today a heavy reliance on stabilizer mechanisms to keep inflation in check.

Regardless, they are operating in a complex, highly competitive environment in which misjudging the market can do serious harm. Also, just because a company is highly profitable in the current quarter doesn’t mean it was nearly as profitable a year ago, or will be as profitable a year from now. If a persistent inflation takes hold, the recent price increases and enhanced profits will be eroded away again by still higher wages and increased costs.

caltrek's comments: Oh, the poor little capitalists. My heart bleeds.

As for the meatpackers... What’s happened during the pandemic is that there has been high demand that, combined with labor disruptions at meatpacking plants, has disrupted supply

caltrek's comment: Ok.

All the hokum about the causes of inflation is basically a confession of impotence. If the Biden administration had a good story to tell about how it’s fixing inflation, it wouldn’t need to create cartoon villains.

caltrek's comment: No, it would need to help us understand that it is a systemic problem. So, greedy capitalists are simply playing the role that has been assigned to them. An assignment which they seem to wildly embrace.

It would be better served by focusing on a whole host of barnacles on the U.S. supply chain — from union rules and environmental laws that have hampered U.S. ports and other infrastructure; to the Jones Act, which increases the costs of shipping; to the foolish tariffs on truck chassis at a time when they are in short supply.

caltrek's comment: The problem is systemic in nature. These are just band aids, many of which will endanger worker health, remove protection for workers earnings, and/or damage the environment. If truck chassis are so strategically critical, then perhaps we should provide incentives for their domestic production. Better late than never, although it is particularly painful during a time of inflation.

Of course, all these measures would be politically painful to address, and none would be a magic bullet.

Yes, and addressing the systemic problems of capitalism as Elizabeth Warren and others suggests would be "politically painful." Monopoly capitalists would see to that.

It is easier to pretend that, sometime earlier this year, corporate America suddenly decided out of nowhere to get greedy.

caltrek's comment: I, for one, would not argue that corporate America has "suddenly decided" to get greedy. It has always been greedy. Again, a role assigned to it by the current system.

[Yuli Ban]

[Yuli Ban]

[caltrek]

Regardless, they are operating in a complex, highly competitive environment in which misjudging the market can do serious harm. Also, just because a company is highly profitable in the current quarter doesn’t mean it was nearly as profitable a year ago, or will be as profitable a year from now. If a persistent inflation takes hold, the recent price increases and enhanced profits will be eroded away again by still higher wages and increased costs.

It (the Biden administration) would be better served by focusing on a whole host of barnacles on the U.S. supply chain — from union rules and environmental laws that have hampered U.S. ports...

https://otherwords.org/the-only-epidemi ... s-worried/