re: Ouch! 275k Jobs Added in February

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Govt jobs should never be counted as its simply another tax on taxpayers.

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it is why i always ask how many are gubment jobs and part time jobs

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I think you're the only one confused

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Yet you don't even attempt to explain how.

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What? Fluffed up BLS labor data is all foreign born immigrants you say? Can't be.

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Sane people know the data collected by the BLS is done extremely well. The Jewish space laser and Michelle Obama is a man crowd are convinced all this data is being released by people who are politically motivated. The tin foil hat people would rather think that nothing they don’t agree with is real.

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Sane people know the data collected by the BLS is done extremely well

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They just admitted on a call the other day that they are understaffed and trying to do thier best.

These numbers are a lot worse than you think. This repoets going to get revised down as well

This statement of yours is ridiculous

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I’d understand revising it by a few thousand jobs but how the hell are the initial numbers that far off?

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Looking at the chart Pezzo posted that was supposed to be so scandalous, the initial estimates for the 14 months were off by about 13% in aggregate. That seems pretty damned accurate to me. They basically said there were 3.5 million jobs and it turned out over time to "only" be 3 million.

Seems like the wrong conspiracy talking point to run with.

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Are you native american? What tribe? Likely a Pollarck from Jersey by the sound of your posts. Lol. Please share how you know the citizen status of all the folks getting jobs. And the number of hours they work.

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Really? You realize that native born vs foreign born and full vs part time are tracked and reported, right? As I said in a prior post, almost all the jobs being added are part time. The US has lost 300k full time jobs over the last year. If you can’t figure out what’s going on, I really don’t know what more I can say.

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But who is looking for an actual contraction?

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I am. Whether they say it out loud or not, I believe the Fed is as well. As long as we have positive GDP growth (especially if it's anything like Q3 & Q4), raising rates risks inflation going back up due to the liquidity problem we still have. We're going to have positive GDP as long as we have strong job creation and low Unemployment, but we're also going to have continued sticky inflation.

So something has to give and that something has to be a contraction. That's why all their talk of a "soft landing" is only as credible as was their talk about inflation being "transitory".

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What do believe is the current inflation rate

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It depends on how we're measuring it. There have been some changes over the last 40 years so the measurement methodology for the 1980 inflation rate isn't the same as what is used today. Not having a fixed basket of goods, no weighting based on propensity of purchasing (not sure if that one was one in 1980 or not, but it should be if the idea is to show what the consumer is experiencing at the checkout counter) and OER replacing the payment approach (which looked at housing prices, mortgage rates, property taxes, etc).

We'll find out February CPI at the end of this week, for January it was 3.1% after having resisted going below that since June (even going back up to 3.7% during the summer).

I believe it's probably closer to 3.5% than 3% if we're basing it off what the consumer is actually experiencing.

Rent is going up (rent of primary residence) but housing prices are coming down (slowly). The issue with housing right now is that YoY unit sales have seemed to hit a bottom while 30-year fixed rates have stalled as well (being relatively unchanged YoY). I think there's an assimilation factor coming into play as potential buyers get more and more used to higher rates being "the new normal" (and also maybe some FOMO coming into play as they fear not being able to afford anything soon). If this is the case, we would see home sales maintain their current pace or move up. All this said, I think OER is now skewing the CPI reading of home prices upward.

When looking at groceries, I like to look at the most-purchased items. While it may skew inflation, I think it's a lot closer to what the average consumer is actually seeing when they buy groceries.

YoY changes:

Soft drinks: Up ~12.7%
Cereal: Up ~1.5%, but I think that may be a little low due to offsetting by including "and bakery products" as PPI for cereal has been above 7% since Q2 2022
Frozen dinners: This is a big, general category and there's no solid tracking on it. I used the Amazon price tracker for random brands (Stouffer's, Swanson's, etc) but they all came up as negligible
Salty Snacks: Again, another very general category so I narrowed it down to chips ( up ~2.4%) since they are by far the most purchased item out of that category
Milk: Down .2%
Laundry detergent: All I can find is PPI data.
Eggs: Eggs are a little odd because of the ridiculous climb then fall they had in 2023. To take that out of the equation (otherwise they've fallen by 47% YoY) I'm comparing today's prices to 2 years ago, which puts them up 20%.
Peanut Butter: They stopped collecting consumer data on this pre-COVID
Meat: Beef ( up .2%), chicken ( up 7.1%) and pork ( 0% although this doesn't include canned hams nor luncheon slices (pork as an overall commodity trended down in 2023 so that number is likely as close as we can get)
Bread: Wheat ( up 7.3%) and white ( up ~.15%) were both up

While this data runs the spectrum from "none" to "specific category" what we see is that the consumer is likely looking at a YoY increase in their grocery bill of somewhere north of 5%-7% (which is considerably more than the 1.2% for food at home we saw from January's CPI). With so much of that data either not existing (at least where I can find it) or having to make caveats for it (looking at you, Eggs), it's a crapshoot as to the exact increase other than saying "more than what we see in CPI".

If all of this is true then Shelter is likely a wash while the Food at Home component likely pushes CPI up (I can't find how much Food At Home accounts for CPI at the moment and there are so many categories of the most-purchased items in which the values aren't as clear as I would like, so I'm not even going to guess beyond a very broad generalization).

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and what long term inflation rate are you comfortable with?

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I think between 1% and 2% is the sweet spot. That's usually seen growth that has been slow but solid and consistent while not often getting into the overheated growth territory (at least nothing that raising rates couldn't quickly temper).

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Higher for longer will eventually break things but the first to go will be the US Govt.

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I don't think it will be the government unless an auction fails. Until then, they'll just continue to issue debt.

I think where we'll see it first is among consumers, the question is among which class or classes? How many new college graduates got into some DEI, marketing, coding, etc position which pays well but will be seen as expendable in a downturn? How many of the middle and lower classes bought a new car or home since rates went to above 5.5% or so?

That's why I'm watching credit card delinquencies. The 90+ day rate has moved up to a 10-year high and isn't likely to change direction anytime soon. LINK