These Jobs Reports Are Not Good for Stocks

And the Fed can see the budding Wage-Price Spiral too.

By Wolf Richter for WOLF STREET.

Employers added 436,000 workers to their payrolls in May, bringing the total number of employees to 151.7 million, according to the Bureau of Labor Statistics’ survey of employers today. Over the past three months, employers added 1.55 million employees. The recently announced hiring freezes and small-scale layoffs among tech and social media giants have not yet made any impression on overall payrolls across the economy.

Payrolls remain 822,000 employees below the pre-pandemic peak and far below the pre-pandemic trend (green line).

Households reported in a separate survey by the BLS today that the number of working people — including the self-employed and entrepreneurs that are not included in the employer data above — rose by 321,000 in May, largely undoing the dip in April, to 158.4 million.

The three-month increase of 704,000 workers was the slowest such increase since the three-month ended in June 2021.

The labor force and labor shortage.

The labor force – the people who are working plus the people who are actively looking for work – jumped by 330,000, nearly reversing the entire decline in April, and at 164.38 million is just a tad below where it had been in March. It remains 207,000 people below February 2020 and far below the pre-pandemic trend. There are plenty of people in the US, it’s just that not enough of them, for whatever reasons, are actively chasing after a job in the rat race. And this has some big consequences.

The “labor shortage” also crops up in other data, such as the record 12 million job openings, not seasonally adjusted, and the huge amount of churn in the labor market, with people job hopping and companies aggressively trying to hire people who already have jobs. But OK, this data was for job openings in April. The hiring freezes announced in May might take some of those job openings off the top, and we’ll find out in a month.

Wages surged among non-managers, but didn’t keep up with raging inflation.

Overall average hourly earnings ticked up by 0.3% (10 cents) from the prior month, to $31.95 in May, and was up by 5.2% from a year ago. Beyond the distortions during the pandemic, the past few months were the largest year-over-year increases in the data that go back to 2006. This category includes all employees in all industries, from management to entry-level workers:

The distortions in hourly wages during the pandemic were a result of millions of low-wage workers getting laid off while office workers switched to working from home, which removed tens of millions of lower-paid workers from the mix, thereby inflating the average hourly earnings. It snapped back when they returned to work.

Average hourly earnings of non-management workers, the “production and nonsupervisory employees” in all industries combined, from waiters to coders, as long as they were in non-management roles, rose by 0.6% (15 cents) for the month, and by 6.5% from a year ago to $27.33 per hour.

Beyond the distortions in 2020, the past six months were the biggest year-over-year jumps since early 1982:

These are big wage gains. But they were insufficient to keep up with raging inflation. The headline Consumer Price Index (CPI-U) at the last reading raged at 8.2% year-over-year. The CPI for All Urban Wage Earners and Clerical Workers (CPI-W) raged at 8.9%. Wage increases, even at 6.5% are far below the rate of CPI inflation.

The Employment Population ratio, which tracks the percentage of people in the working-age population who are working, ticked up to 60.1%, after the dip in April, and is back where it was in March. Before the pandemic, it was a full percentage point higher (61.2% in February 2020).

The unemployment rate in its narrowest form remained at 3.6%, unchanged for the third month and roughly where it had been before the pandemic. This is the percentage of people who are in the labor force but don’t have work despite their active efforts of finding work.

The number of unemployed people who are actively looking for work ticked up from April, to 5.95 million, but were still the second-lowest (behind April) since February 2020 and are roughly in the pre-pandemic range.

Not good for stocks.

Overall, this is the image or a very tight labor market that is tight for the wrong reasons – in that the labor force, though growing, has not returned to pre-pandemic trend, and might not return to it, which has constrained hiring, and has made it difficult for companies to expand, or even catch up with demand, and it pushed up wages, which is a good thing for workers – thank god, finally!

But it’s not a good thing for companies that have to face these much higher labor costs, and they’re blaming those labor costs for their earnings warnings, which is not a good thing for stocks, which treasure and adore cheap labor.

And this report on the labor market doesn’t give the Fed any reasons to slow down its rate-hike path; on the contrary, it points to a budding and dreaded wage-price spiral that tends to nurture and fuel long-term inflation that is then hard and painful to dislodge. And the Fed has become nervous about it. And that’s not good for stocks either.

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  160 comments for “These Jobs Reports Are Not Good for Stocks

  1. andy says:

    Joe six-pack can do better job ‘seeing’ where things are going than any ‘genius’ at the Fed. Watch them do exactly wrong thing at exactly wrong time, again.

    • SoCalBeachDude says:

      Obviously, many jobs in the US need to be eliminated and many more need to have the wage rates cut very significantly. As to the Federal Reserve, it always does exactly the right thing.

      • COWG says:


        I commented a few articles ago about McDs offering jobs at $10-11…

        I found it curious that 6 months ago, the brag was $15…

        What happened…

        I think they got the same people at $10 as they got at $15…

        Public relations meet reality…

      • Don says:

        Well, according to the dismal science, wage and price controls always fail, and so the Fed with its dual mandate will invariably do the wrong thing for the right twenty percent of the people, also known as apex predators. If Vilfredo Pareto were alive, he would not be surprised.

    • Raj says:

      Its the “EVERYTHING BUBBLE” : An amazing facade.
      Fed cannot pop it selectively in stock market. It will pop everywhere together. All the following will go down with this Bubble in the following order:
      1. Value of Labor
      2. Value of Dollar in US
      3. Democrats chances in upcoming elections
      4. Stocks
      5. Bonds, Treasuries, CMBS and MBS
      6. Jobs
      7. House Prices
      8. American influence on Globe
      9. Value of Dollar globally
      10. Current Political system in USA

      • Swamp Creature says:


        The everything bubble will turn into an everything crash. It’s already happening as we speak. Every investment will go south. Get ready. ENJOY!

      • Wisdom Seeker says:

        Raj you have that all wrong. The data, as presented by Wolf, show this:

        1) Inflation (accelerating decline in purchasing power of US dollar) came first. (CPI-U yearly % change hit bottom in May 2020. Or check US money supply metrics; the spike in M1 started April 2020.)

        2) Bonds topped next (August 2020).

        3) Speculative stocks, Small Caps, China etc. topped in Feb 2021.

        4) Mainstream stocks (S&P500) held out until Dec 2021 / Jan 2022.

        5) Purchasing Value of Labor (average hourly earnings for production/nonsupervisory private employees, divided by the CPI-U Inflation index) only started to break down in February 2022.

        5) Commercial Real Estate has already topped, as have REITs.

        6) Housing is topping now.

        7) Jobs will be next.

        Not in Wolf’s data, but going out on a limb:

        8) Commodities (based on the 2008 precedent)

        9) Energy Prices (based on the 2008 precedent)

        10) Food crises

        11) Sovereign debt crises (Japan, Europe)

        12) Political/Economic collapse of a nation with > 100M people (Sri Lanka has only 22M people but is having such a collapse already.)

        P.S. This is a Global Everything Bubble, not just US, so it will blow up everywhere. And usually a major bust is significantly more difficult for most of the rest of the world than for the U.S.

        • Dan Romig says:

          W S,

          Your #10:

          There is a famine that is closing in on Africa and much of the world.

          In Europe and North America, food will be there, but it will cost much more than it already does.

          Wolf’s blog is about “Business, Finance and Money;” not politics. But it has been politics; by a small, yet powerful cadre that has put this into place. It is in place by design, and moving forward according to the game-plan.

          Raj’s #10 is the only hope for this to be stopped, but it will be too late if it occurs. The suffering will already have happened.

          As I have commented, my father was mentored by Nobel Peace Prize Laureate Dr. Norm Borlaug, and Dad worked for him for the first five years out of grad school. The world is on very short supply of wheat and many other staples needed to feed humanity.

        • David Hall says:

          Wages up over 5%.
          Brent Crude $120/barrel.
          New Ford $32,000.
          20 oz bottle of Coke at Walmart $1.98

          The value of the dollar must have crashed. A bottle of Coke cost 25 cents in 1979.

        • COWG says:

          “ The world is on very short supply of wheat and many other staples needed to feed humanity.


          Surely you jest…

          How on earth can you put politics into the African situation where China has been creating a large presence and is going to come to the rescue with Russian wheat that nobody else will buy…

          I’m shocked by your assertions…

        • Maximus Minimus says:

          @Dan Romig

          The world has a record supply of wheat and everything else. The amount of acreage borrowed from nature increased by leaps and bounds.
          The only thing in over-supply and growing is the number of mouths to be fed.
          During the time of your dad, the problem just started to flicker on the radar for those with eyes to see.

        • NBay says:

          Don’t worry. Jesus will show up and send anyone who had or had anything to do with abortions to the lake of fire, along with all non-believers and probably all the lazy people, too. Those that are left, but still in poverty, will get all the fish and bread they want.

        • Raj says:

          Wisdom Seeker : Value of Labor broke first because with Pandemic WFH and Free money, everyone thought that all they need to get rich and order stuff was a mobile phone. Society started downplaying the value of doing actual productive work.

          Commodities will not collapse with food crisis. Food is a commodity!

          “And usually a major bust is significantly more difficult for most of the rest of the world than for the U.S.” – This assumes that US actually produces most of the stuff that it consumes and that crude will always be sold in Dollars.

          Most of the rest I agree with.

        • Dan Romig says:

          I may have over stated the risks, but The Guardian and other publications have recently reported on this issue.

          In my world, as of Monday, 31 May, Minnesota had 11% of spring wheat planted versus 85% last year. North Dakota was at 27% versus 93%. What is, and will be planted in the Northern Plains will have low yield and high disease pressure this year.

          This may not make a difference in Africa short term, but the supply chain from Eastern Europe, plus much of the planet having an off year in crop production do add up. Although India did have a good wheat harvest recently.

          Senegal’s President, Macky Sall, who chairs the African Union spoke on Monday, 31 May, “The worst is perhaps ahead of us if global food supply trends continue.”

          I hope that I am wrong and things will be OK. But it sure looks like the price of food is rising fast, and the availability is, in many parts of the world, decreasing.

        • Dan Romig says:

          Monday, 30 May …

          Tuesday, 31 May …

        • NBay says:

          Maybe it’s time to quit making fuel out of food? Especially at 1:1 ROE. If they can run those plants they can build windmills.

        • Dan Romig says:

          Just in from Grand Forks’ Farm Net News Don Wick & Tommy Grisafi:

          Boots on the Ground in North Dakota & northwest Minnesota. The tour consisted of three days and 1,200 miles.

          “Crops are getting planted, but timing is far from perfect. There’s going to be some ‘Prevent Planting’ (cover crops to protect the soil & bring cattle in on possibly, in late, late summer), but we’ll probably ratchet that number down. If we miss this week’s rains, there could be more soybeans planted than people think. Planters were rolling through the weekend in less-than-ideal conditions.”

          “The farmers know the world wants their grain. They’re a little disappointed because they had a chance for big bushels and a big price, but the big bushel window is probably gone.”

      • Capitalist says:

        Hi, one question, when the jobs and housing go down, inflation will probably go down too. then fed can do monetary easing to get US to growth without inflation. So I do not see why this will lead to the last 3 items in ur list about permanent decline of US in globe. could u explain?

    • andy says:

      In other news – Is there a bigger charlatan than Elon Musk?

      • NBay says:

        Sure. But they already “earned” their pair of invisible hands…..he’s still working on his…..why I’m sure I don’t know……

        • NBay says:

          ….maybe, with inflation and all, he just wants an extra big pair?
          Going to Mars is a pretty big item to have on one’s “bucket list”.

    • RH says:

      To be fair, the banksters and financiers who actually control the “Fed” are wise crooks: they will crash the stock market (and probably the RE market) and make a killing by getting the “Fed” to lend them money to buy the stocks and real estate at bargain prices. Either way, due to their control of their “Fed,” the thieving crooks will come out on top.

    • Old school says:

      We really goofed up when we let Fed set short term interest rates and do QE to manipulate long term rates.

      You control the price of assets when you control the risk free rate. That is how we got the everything bubble determined by a hand full of people. Powell seems to have the hubris to think they can soft land the plane. He will be a convenient scape coat if he nose dives into the runway.

      • sunny129 says:

        Old school

        Fed never admit their sins but deflected to some one or something like Putin/Covid etc!

        Do you remember what did they said (collectively) in 2008?
        ‘ No one SAW this coming”

    • Frank Natalie says:

      The American people deserve what they get for their stupidity in believing the Government’s constant lies, over and over again. I’m just bitter I have to be a victim of the Fed’s criminality while they regulate our current economic disaster into oblivion.

    • gametv says:

      My belief is that as home prices melt down alot of people will realize they are not rich and need to work. And as their savings get used up, they return to the workforce, only to find wages falling rapidly.

      As the massive money bubble gets eliminated, the economy will re-adjust quickly.

  2. SoCalBeachDude says:

    US Treasury yields went SOARING UPWARDS due to the fantastically great job reports which mean the Federal Reserve will have to do all it can to slow down the US economy with its ‘policy tool’ of raising the overnight interbank advisory Federal Funds Rate!

    • andy says:

      Wrong, again. Yields spiked two days before jobs report. And practically unchanged since jobs report went out.

      • perpetual perp says:

        I think you’ve assumed that no one, absolutely no one, knew the stats before being released to the public. I believe it’s called ‘front running.’

  3. As long as underlying economic growth remains strong then stocks are a plus. The fact that stocks did well in a decade of slow growth does not automatically imply they will do poorly when growth picks up. Consumer spending allows for economies of scale and its not certain going ahead that consumer solutions will fix the nations problems. A lot of what sunk the dotcom bubble was B2B, no consumers involved. They managed to optimize the supply chain, and then.

    • Raj says:

      US economy’s primary strength has been productivity. Today there is no incentive to remain productive:
      1. Most workers who do a good job still have their salary reduced by the 8%??? inflation.
      2. Most employees working from home are only working part time due to above salary reduction.
      3. Most employers cannot ask workers to come to office, otherwise they will leave.
      4. Many workers bought home far away thinking Work from home would be permanent.
      5. They can no longer afford a home close by and transit to work is now 8 hours extra with a steep gas cost!
      6. Most workers who stayed at home to gamble in Cryptos, Stocks and Spacs have already given their money to wallstreet.
      7. The government, the fed and the politicians seem to be working even less than most workers!

      • perpetual perp says:

        Just a simple question. Is the comparison of income growth vs price inflation adjusted at the aggregate level? If millions of people have their incomes go up 6.5%, does that assume all their expenses went up proportionally (at the higher inflation rate)? And people will adjust their spending habits, no? I read that there are ‘signals’ that prices are rolling over. Profits have been kept artificially high because of semi-monopolies in many industries. That facade will crumble, I suspect.

        • Wolf Richter says:

          Some prices that spiked rolled over. Some prices that spiked rolled over and now are re-spiking. Some prices that didn’t spike are now spiking, particularly in services, which is where consumers spend 70% for their money.

    • Augustus Frost says:

      If the bond mania really ended in 2020, “growth” will not pick up.

      The end of the credit mania with the concurrent mediocre to awful long-term fundamentals = long-term below trend actual growth or economic stagnation.

      American living standards are destined to decline (noticeably) for the indefinite future.

      The end of the credit mania also means the end of the US stock market mania, if not now, in the not to distant future.

      I consider this less certain because a respite from the emerging bond bear market provides the rationalization to send the stock market to new highs. Measured by futures prices, the bond bear market (in UST) started in March, 2020.

  4. WolfGoat says:

    Time to switch from printing cash to printing work visas! Immigration went down during the previous administration and then tanked during the COVID border shutdown. Maybe it’s time to invite some folks to come work here. But I can hear it now; “they’re stealing jobs!”

    • Wolf Richter says:

      That’s the last thing the US needs, though Corporate America and stocks always love an endless global supply of cheap labor and the rock-solid wage repression that this endless supply of imported cheap labor produces.

    • somethingstinks says:

      So instead of investing in your own people, the solution is to bring more cheap labor from overseas that can be easily exploited. Nice, the American way. Looks like America is on its wat to become another England, or for that matter France. Teach your kids (especially daughters) sharia law while you are at it.

    • Augustus Frost says:

      Totally insane.

      Your inferred premise is that a society exists to maximize economic “growth”. It doesn’t.

      These labor shortages and much of the supply constraints are substantially the result of idiotic government policy. US immigration policy is already idiotic, as it’s on course to turning the country into a third world Balkanized society.

      The last thing the US needs is a mass increase in immigration.

      What the country needs to do is reverse the current idiotic policies to try to reverse the damage, not dump more fuel on the fire.

      • TheAltonRoute says:

        Atlanta’s not diverse enough. We need more. Don’t you listen to the bishops’ conference?

    • georgist says:

      Get workers in on visas who can’t negotiate wages rises.
      Put pressure on housing stock.
      Rentier solutions!

  5. Phoenix_Ikki says:

    So Papa Powell can’t use this excuse to reverse course or ease up anytime soon on QT or rate hike, good, although not so good for the FED Put peeps, not so good..

    Now if there’s a way for me to short FED tightening denier sentiment, I would take that bet.

  6. Bobber says:

    It’s a pretty dicey environment for retirees right now. Inflation greatly exceeds growth in fixed income streams, and that will likely continue for may years, given continuing huge policy errors of the Federal Reserve Board. Here we are today with inflation running at 8% and interest rates at .75% to 3%.

    Conservative retirees took a huge hit, for many years, from interest rate repression. Now, they are getting hit with both interest rate repression and massive inflation.

    The Federal Reserve Board has determined that retirees and younger generations should fund the speculative excesses of other groups. Why? Excess speculation produces long-term economic weakness and financial instability.

    Why was the Federal Reserve promoting 100% home price increases in many markets in 2-4 years, while unemployment was extremely low at 3%? I thought the Federal Reserve’s goal was stability.

    • Phoenix_Ikki says:

      “Why was the Federal Reserve promoting 100% home price increases in many markets in 2-4 years, while unemployment was extremely low at 3%? I thought the Federal Reserve’s goal was stability.”

      Cause Weimar Powell and his circle could give a rat’s A$$ about future generation well long as they get their share and keep the wealth effect going, the game continues just a little longer. Be a debt slave to own a overpriced home? Perfect, all part of the plan when inflation is low but now that the genie is out of the bottle, good luck taming that beast down, younger generation will just get screw over and over again and they expect you to say thank you and may I have another please..

    • Swamp Creature says:

      No one give’s a rat’s ass about retirees and their problems. Get over it. I was supposed to be retired long ago, but I saw the hand writing on the wall. The only way to survive is to stay in the workforce as long as you are physically able. Try to make the best of the situation. The days of retiring and cruising and seeing the world are over.

      • Anthony A. says:

        I kept working until I was in my early 70’s since I saw trouble coming and wanted to bank as much as I could and have no debt going into retirement. Fortunately, I am healthy and was able to do that.

        • bobo55 says:

          exactly.if you healthy.i work in construction and I am 45 years old.and i can feel it.there is no way i can keep working same pace another 15 years.

      • NBay says:

        Anybody else check out the motorcycle ad here? They are trying to get that classic very first motorcycles look, did a pretty good job, but couldn’t duplicate a busy looking springer front end so they went with an Earles fork. Like the 60’s Greeves motocrosser had. (Maybe I should have put that under a Dan R comment.) Sorry you probably won’t cruise the world.

        • Dan Romig says:


          Mercedes-AMG One is now out. It is a street legal Formula 1 car. About $2.875 million and a waiting list, so no, it will not be in my garage anytime soon.

          But it goes from zero to 200 kph in seven seconds. Not bad, eh?

          My Tuono V4 1100 takes nine seconds with me riding it to do the same. (8.1 seconds on a track with the right rider) That is what I love; performance.

          Nothing else matters to me when riding my motorbike or bike(s). Performance and a comfortable fit on the machine.

          To each their own though …

        • NBay says:

          What’s min time back to zero? That’s performance, too. Besides, you got throttle by wire, launch, anti-wheelie, and traction control to keep you out of trouble if you want it. But I lack the finesse for high power road, too, (never had it even when young and fearless) as I found out on my Suzuki GT 750 with that damned double power band (around 6 like most bikes, and then at 8500 it got past redline so fast it made my head swim. After a lucky crash on a sweeper I sold it and got a restorable classic Yamaha SR 500…I dig thumpers, anyway, being primarily a dirt guy….and bikes you can see through.

        • NBay says:

          Sorry….GS750…..a 4 stroke….also my commute bike for a 3 years or so….all weather….saved money for land. 10mi of 101 freeway, mostly, lived and worked on frontage roads……but I did ride a friend’s GT or whatever…(their first 3 cyl 2-stroke) back in the 70’s, punched it it in second and the damn front wheel came off the ground….torque-city! Stayed with my Honda SL350.

      • Phil says:

        I’m working my butt off, and taking care of only one kid half-time (it’s great, he’s 12) and I want to retire next year. I spend so much on take out food, because I don’t have the time to cook! My spend on food will go down 75% when I retire. I can cook, and enjoy it! More veggies, and noodle dishes, with hamburger, and food bought at the local Mex grocery, not Whole Foods. I’m urban, and can fill up my car once every month, if even that’s needed. As for trips, I can wangle that, and in Mexico, will stay in Mexican towns for 1/5th a night of what other people pay. That’s why I’m not freaked out about all this.

    • Not Sure says:

      “Why was the Federal Reserve promoting 100% home price increases…”

      Because the Fed is scared of inflation, but they’re way more scared by a credit crunch. “Printing money” is such a misnomer these days. We don’t really print money that much. We monetize debt. A dollar created this way has an anti-dollar sitting on the fed balance sheet, unlike a paper dollar just freely printed and circulated. Our whole system floats on credit money, and if credit markets freeze, it’s game over for the empire. The Fed got so spooked in 2020 that they hit the gas and wouldn’t dare let off until the credit crunch monster was far away in the rearview mirror.

      The Fed will now fight inflation aggressively. And they probably don’t even have to actively raise interest rates all that much. They just have to reverse some debt monetization through quantitative tightening. They have a $9T sized hole to suck liquidity back into. What I suspect they won’t ever do is risk frozen credit markets. If that means crushing the purchasing power of retirees and the middle class, then so be it. I don’t know when they’ll eventually back off of QT, but I’d bet it would come at the drop of a hat in the face of a big credit crunch, inflation be darned to heck!

      • Boeblingen says:

        Don’t forget about the new trick in the Reverse Repo facilities… FED can say they are doing QT when their slight of hand in the Reverse Repo is doing the exact opposite — sucking and blowing at a moments notice.

        • Wolf Richter says:


          You got this exactly backwards. The Reverse Repo facilities are pulling in the exact same direction as QT. They’re draining cash from the financial system. The reverse repos are a stealth form of QT. Look at stocks since the Fed started doing the reverse repos in the spring of 2021.

      • Harry Houndstooth says:

        Jamie Dimon agrees with you.

  7. Apple says:

    I doubt any of those 60+ workers that left during the pandemic are going to return.

    • Anthony A. says:

      Denny’s is hiring a few miles from my house. Wait staff in Texas are paid $2.13/hr plus tips (must report tip income). Many shifts available with no night shift bonus. I believe they are looking for a night shift manager too.

    • Augustus Frost says:

      Plenty of them will try to return when stocks join bonds in extended bear markets.

      Notice I stated “try”, as the employment market won’t be anywhere near so rosy.

      • Swamp Creature says:

        They may find that their jobs in the fast food industry have been outsourced to robots. Their former jobs are gone.

        • Augustus Frost says:

          Totally agree.

          Not just the fast food industry but restaurants generally. Except at higher priced establishments, I expect most serving staff who are paid the “normal” minimum wage (or higher) to be “rightsized”. This is just for starters in the labor market generally.

          I find restaurant menu prices ridiculous now. There is a limit to how much higher menu prices can be raised, especially when it needs to include not only higher hourly but (full) benefits too.

          As the country becomes a lot poorer, eating out will far more closely resemble the luxury it used to be.

        • gromit says:

          Example Tesla/Musk? Letting staff go because presumably WFH less productive, supply chains constrained and recession coming (not untrue), then have factories in low tax states run by AI/robots, increase margins, stay the richest man, done.

        • Anthony A. says:

          “As the country becomes a lot poorer, eating out will far more closely resemble the luxury it used to be.

          When that happens, there will be a lot of empty restaurants around to go along with the empty retail stores and malls.

        • NBay says:

          When I was a kid we ate out maybe once every two months. Had to dress up and behave….I hated it.

        • COWG says:

          Worse than when the President was on tv ?

        • NBay says:

          We never had a TV till the “must see” Mickey Mouse club came on and we had to walk home at night from friends. Finally browbeat the old man into getting one. He really hated it them, called it “The Mahogany Shrine”.
          I don’t recall seeing Ike on TV, though…….sure remember Annette’s tits though, even though I like Cheryl best.

    • Keith says:

      Maybe, maybe not, price rises in food, meds, property taxes/rents with a loss in their investments may force them back in especially theybare probablynin higher risk investments for yields.

      Forgot whereby heard it, but as inflation spikes and the market tanks, all those retirees and crypto bros will be flooding the market with labor.

      • Bam_Man says:

        I hate to sound like a doomer, but mass suicides will be more likely than most of those crypto bros and retirees returning to the workforce.

    • Happy1 says:

      Wait until the market drops 50%

  8. Old School says:

    Just saw regression to trend for the sp500 is 1750 give or take. A lot of hot air if rates normalize. It is all driven by unanchored fiat, so who can make sense of it. I hear Turkey stock market is doing pretty well not counting inflation.

    I have been trading a couple of small caps on the dips and selling them on the pops when I can make 5% or more. All small potatoes. Current stock exposure is about 5% and that is a big gold miner and a non US equity index fund.

    • Escierto says:

      Brave man going with the gold miner! I think the gold miners should be doing great but the market doesn’t see it that way. I guess they are making too much money – they prefer companies that lose money.

      • Wisdom Seeker says:

        Gold miners are taking a hit from rising energy and wage costs-of-production eating into their otherwise-healthy revenues.

        Gold and other commodities are in danger if/when the Fed finally overtightens. Could be a while yet, though.

        • HowNow says:

          In addition, extraction of minerals is increasingly costly – low hanging fruit is gone.

        • Escierto says:

          HowNow, the Spaniards got the low hanging fruit back in the 1500s!

      • Old School says:

        The gold miner was one of my best trades ever. I bought a lot when gold was $1800 and sold after the war started and gold popped. Mostly luck and a little common sense. Kept about 2% of my portfolio in gold miner and that much is up about 15% now counting dividend, but could end up being a loser. I am going to hold it in case gold has run from a loss of confidence in system.

        • NBay says:

          Don’t any old farts just put ships in bottles anymore?

        • Anthony A. says:

          NBay, can’t get glass bottles anymore. Ask Wolf about his mugs!

          Old guys just play the market anymore….selling options only, of course. Gotta make a few extra bucks now that inflation is eating our butts.

        • Old School says:

          One day you will be retired and you will be trying to figure out how to make your savings last 30 years too.

        • NBay says:

          Yeah, maybe when I grow up.

    • WolfGoat says:

      I’ve been making a little bit of money shorting the bond market on the fear dips. I guess it’s my way of printing money!

      • Doug says:

        I wish the Fed would not go so slow about tackling inflation. 100bps June and July. Pop the everything bubble already.

        • Abomb says:

          Exactly, let’s just rip the band-aid off and get it over with.

          If the picture looks as it does now I wonder if rate hikes get more aggressive after the mid terms.

      • Old school says:

        The bond market is too tough for me. I just try to use short term treasuries as a place to hide out when stocks get very expensive or as a stabilizer to porfolio as I get older.

    • Augustus Frost says:

      S&P 500 1750 appears to be “trend” mostly due to inflated revenues and earnings due to fake “growth”.

      It’s actually still very overpriced. It’s not even close to actually normal versus pre-bubble (roughly 1995) trend.

      The last time valuations for both stocks and bonds were “normal” was in the mid-1960’s, roughly coinciding with the removal of silver from US circulating coinage.

      Bond yields (and market interest rates) were higher than now but much lower versus 1970’s and 1980’s.

      Versus now and last 20 years, US stock P/E ratio was lower or much lower, balance sheets were far less leveraged, and dividend yields noticeably higher.

      • Old School says:

        I got the 1750 from a regression analysis on stocks for last 150 years even though there was have been fudging as sp500 hasn’t been around that long. I think long term price to sales ratio is around 1400. If I am not mistaken the lowest P/S ratio ever is 0.5 which would be around 700.

        • Augustus Frost says:

          The problem with using long term averages now is that it’s distorted by a long-term mania.

          Best example is the 10% (or whatever it is now) “historical” return on US stocks.

          The US stock market has been in a full blown mania for most of the last 22+ years, yet it’s supposed to be credible that “investors” can reasonably expect these inflated returns essentially forever.

          It’s ridiculous and it’s not going to happen.

  9. Tom S. says:

    Population agin,
    Inflation ragin,
    Workin folks wages aren’t payin the bills,
    Time to unplug and head for the hills.

    Oh Papa Jerome! Papa Jerome!
    Why can’t you print me a nice new home?
    Oh Papa Jerome! Papa Jerome!
    You said you would help, but now I’m broke and alone.

  10. Abraham M says:

    I appreciate these reports. Thank you

    While I agree with most of the reports, I have issue with using averages for hourly wages to justify market conditions.

    Lumping coders with service workers gives no relevance to the numbers. Granted few if any making minimum wage is reading these reports.

    A median that isolates industry and positions rather than broad-strokes would be a better read, but too much details might scare people.

    The stocks does not trade much on fundamentals, values or technical data anymore.

    In the realm of meme stocks and casino traders along with cash from drug dealers and crypto scammers steers the markets; not reality.

    To argue about the FED is useless as it is to assign blame to them. There are too many factors and variables for a fireside chat.

    • QQQBall says:

      Interesting. I have friends that work in and for big corporations. Hiring and promotion is reportedly being based in many instances on factors other than merit, competency and reliability. Similarly, in some instances dullards and laggards end up getting promoted and advanced to meet quotas and it seems upper management is afraid to fire them. This is a bad trend in terms of productivity and attracting talent. In productivity terms, it inflates the cost of labor. It also makes it very difficult to retain highly competent and productive workers as they don’t want to put up with the b.s., wont work for idjits and many don’t need the money anymore. One of my buddies works remotely and his wife sold her business. HE is good at his job and welcomes the benefits including medical insurance, but if they mess with him or order him back in the office, he will quit. Given the parameters for new hires, his company had trouble attracting highly qualified people. With the emerging downturn, I suspect the higher paid more experienced people will be cut first. Interesting times.

  11. Flea says:

    As a retired baby boomer worked for 52 years,went to buy some swimming pool chemicals fron national wholesaler ,where I worked seasonally,manager wants me too come back . Apparently millennials have no work ethics or accountability. Can’t keep help ,so they pay more for less work = inflation

    • Einhal says:

      So millennial bashers stop to think that maybe it’s not that they’re lazy, but that they refuse to bust their collective butts to make the capital class rich? Look at their wages in terms of what it can buy, houses and stocks, and you’ll see why they don’t bother.

      • Cookdoggie says:

        Funny actually. Boomers say millennials are lazy. Who were the parents of millennials that didn’t instill any discipline? Boomers.

    • NBay says:

      They are being punished for it, Flea. They don’t have swimming pools.

    • WinterHill says:

      You didn’t mention the wages your pool man is offering. My guess is that they aren’t much higher than they were 3 years ago, when wage slaves were very easy to come by for <$10/hr.

      Sounds like an old man’s grumblings about “the youth these days”, which is something that old men have been doing since the dawn of humanity.

    • SOL says:

      I hate to be the one to pop your inflated head Mr. ICANREMEMBERWHENCOKEWASANICKLE,
      the priced-out generation is growing restless, and angry.

      Maybe it’s not because they have no work ethic, but it’s because they aren’t stupid enough to stay at a low paying job that only pays enough for 1/3 rent and a daily McDouble.

      • NBay says:

        Sounds like you’d be up for some 2am motocross on a golf course. I don’t know what was more fun, doing it or pissing them all off. Even made the local paper.
        “Who would do such a thing and why?”

    • Nunya says:


      I’m in the construction business, but work in the procurement/estimating side of it. According to my age, I would be classified as a millennial. The managers and employees above 50+ have not created a succession plan for the future of the company. This is similar across the 3 other companies I worked at. They don’t train the younger workers. This extends to the staff outside in the field supervising the craft labor.

      We are asking people to come out of retirement because our younger workers don’t have the experience. It’s not the younger worker’s fault if he didn’t receive the training from the older more experienced workers. And now the older generation blames the younger workers? It’s very hypocritical in my industry.

      This whole “boomer” and “millennial” rhetoric is similar to calling people racial names. It’s disgusting and needs to stop.

  12. Not Sure says:

    According to St. Louis Fed numbers, the overall labor participation rate grew steadily from the 1960’s into the 90’s, then peaked a couple decades ago and never came close to recovering from its GFC drop. The civilian labor force is only up about 10 million from where it was in 2008 despite population growth of about 30 million. The domestic population’s average age is increasing as our population growth rate is slowing… We millennials are well below replacement rate when it comes to making children who will be entering the workforce in 10-20 years, and Gen-Z is lining up for an even more dismal reproductive performance. Workforce growth has been pretty flat for a while, and a glut of early retirees along with moms staying away from work due to hardships like high child care costs aren’t going to help workforce growth. I’d guess that huge mass of early retirements caused the deviation from trend in the nominal workforce chart, and it wouldn’t surprise me if it never meets that trend line again. A majority of the tea leaves seem to be pointing toward very weak real economic growth from here on out.

    • Augustus Frost says:

      The labor force is not shrinking due to demographics. That’s a rationalization. The most realistic explanation is perceived affluence where the country collectively acts like it’s rich because of an asset mania and exponentially increasing debt.

      People only don’t work if someone else is producing enough to support their consumption. In a non-distorted economy, this occurs from real savings making a society actually wealthier. In an increasingly distorted economy like the US over the last few decades, it’s substantially and maybe mostly due to fake “wealth” from the asset mania and government transfer payments.

      Absent that, someone either works or starves. Age and personal preference have nothing to do with it.

      As the country becomes visibly poorer (it’s at best stagnating now), the labor force should increase even without increased immigration as living standards decline.

      If it isn’t what I described, then maybe off-the-books employment is a lot higher than I have ever read about which concurrently means the labor force is bigger than reported also.

      • Not Sure says:


        There’s a caveat. In a population with tepid growth, I could see us returning to the days where we live with less. More adults may be forced to stay home to take care of family. The growth in our labor force may be forced to flatten moving forward, at least for a while.

        The labor participation rate was a lot lower in the 1950’s into the 60’s, probably because women were much more likely to be at home raising the children. The average family did not have 2 or 3 cars, multiple TVs, washing machines, etc.

        In the future, the new standard may well be that the parent with lower earning potential stays home to take care of maybe one or two kids and the soon-to-be-broke grandparents. I have a kid in daycare and the monthly cost for any remotely decent daycare facility is unreal here in CA, about the cost of renting an apartment! A lot of people can’t afford it anymore. I am already seeing this in my neighborhood. In 2019, there were almost no street parked cars around my house. Nowadays, good luck finding anywhere to park if you don’t have space in the driveway. Lots of millennials/gen-x with kids have moved back in with boomer parents or vice versa. I could be wrong, but my speculation seems like a realistic possibility.

        I think it’s you who often says something like, “American’s standard of living is going to be worse or much worse in the future” (not verbatim, but I think I’m close). I agree. But somebody has to take care of the kids and elderly in a poor household, and more poor households may mean fewer families able to afford child & elder care and thus fewer workers available.

        • Augustus Frost says:

          I agree with your sentiments, but you are partly restating what’s in my post, just differently.

          In the traditional western/US family household with one income earner, the rest of the family is supported by that one income. If one income (or two which is the norm more recently) isn’t enough in a society which can no longer provide subsidies through transfer payments (where the US is heading), it’s a combination of lower living standards and multi-generational living arrangements.

          This is where the US is heading. I don’t anticipate transfer payments being eliminated entirely within my lifetime, but the constant value of the subsidy is going to shrink noticeably and then drastically over time once cheap borrowing and loose credit standards aren’t available.

          People can voluntarily reduce their living standards (to a point) to have the option you described, but this isn’t tied directly to demographics, maybe indirectly.

          One of the biggest changes from lower living standards is almost certainly going to be large scale forced multi-generational living arrangements. Americans think they have a birthright to live in their own dwelling, but they don’t.

        • Apple says:

          Have you priced daycare recently?

        • Gomp says:

          Early seventies. Women of child bearing age were not able to use their income to qualify for mortgages or credit. Congress outlawed that. Soon after, it became normal to use all household income for qualifications. Soon after that prices could rise unrestricted. Now it takes two incomes to qualify for most everything.

  13. Kentucky says:

    The dynamics surrounding labor are fundamentally changing. As a business owner I’m seeing paradigm shifts that create great opportunities for workers that have been treated as a faceless commodity.

    Social media has given voices, provided information, and created networking opportunities to the invisible working class. Fortunately workers are now getting better compensated for their hard efforts.

    Business models that have relied on underpaid and invisible staff will crumble under the weight of real labor rates and heightened customer expectations.

    So many business models are built on a “race to the bottom” mentality. Faster and cheaper products/services can only sustain themselves for so long.

    At some point, the workers say, “I’m tired of delivering it faster and cheaper without getting better compensated.” It’s truly that simple.

    That’s why restaurants notoriously fail. They’re trying to deliver a fast and cheap product with labor that no longer excepts the status quo.

    • unamused says:

      ‘At some point, the workers say, “I’m tired of delivering it faster and cheaper without getting better compensated.”’

      It’s not a matter of being ‘tired’. It’s because they can’t afford it. With the skyrocketing cost of living – not just CPI, but housing, health care, and corporate nickel and diming – nobody can live on what restaurants pay their staff. Even chefs are squeezed out. Even Eric Ripert and Daniel Boulud have said exactly that.

      • Kentucky says:

        They’re tired because they can’t afford it.

        We, consumers, have the power to change but it requires shifts in values and decision making. Rather than eat out for convenience, maybe we eat out only on special occasions. If that’s the case, we may pay a lot more for the restaurant dinner. This “new and improved” restaurant pays not just living wages but prosperity wages to its employees.

        But as consumers we are selfish and want “deals” to the detriment of invisible workers.

        I’ll eat out less and gladly pay $30+ for a cheesy Tex Mex enchilada plate if I knew the workers had health insurance and could participate in a 401K plan.

        • HowNow says:

          I like your comments, Kentucky. Wondering why you chose that name – resident or U of K grad or ??

        • unamused says:

          “Rather than eat out for convenience, maybe we eat out only on special occasions.”

          Fast food is only part of a larger and more pervasive problem.

          Forty years ago, student loans were unknown and healthcare costs did not bankrupt households. Forty years ago, relatively few Americans were obese. Go back a decade further, prior to the explosion of fast-food outlets, and a small percentage of the money Americans spent on food went to eating out / away from home, i.e. fast-food and restaurants. Eating out was a treat reserved for special occasions, not a daily ritual / birthright.

          And it’s symptomatic of a far worse problem.

          The most insightful way to grasp the pervasive moral rot is to examine the tyranny of self-interest: in the past, the public interest / common good still had a foothold in the nation’s values, incentives and expectations. Now the public interest / common good are nothing but paper-thin PR cover for maximizing private gains by any means available, i.e. the supremacy of self-interest.

          Our ability to discern the difference between serving the public interest / common good and making a modest profit doing so and harming the common good to maximize private gains has been lost. There are many such examples. The financialized self-interest behind student loans, healthcare, national defense, Big Pharma, Big Ag, Big Everything–i.e. cartels and monopolies–is visible in every nook and cranny of the U.S. economy, political structure and economy.

          You get the idea.

        • 91B20 1stCav (AUS) says:

          Una-450+ft over the centerfield fence…

          may we all find a better day.

      • Old School says:

        In some ways restaurants are a tough business model as you compete against someone making a meal at home. Used to be said that only 1/3 the cost of a meal is the food.

    • somethingstinks says:

      Went to outback steak house last night. Friday night, no wait, and more than half the tables were empty. Quite a few waiters were chatting around in the back, but service was quite responsive, the steak was average. On the check, in the past there used to be a tip guide for 15%, 18% and 20%. Now it starts at 18% and goes up to 23%. Looking at the expected minimum tip, my son asked me how much a chef makes at Outback, and a google search showed an average of 28K / year. How in the world is someone expected to live on that in this day and age? I did not have the heart to look up the waiters wages. Left a decent tip and said a prayer.

  14. TBP says:

    “…and it pushed up wages, which is a good thing for workers – thank god, finally!”
    No, this is not a good thing at all. Wages should go up due to increased productivity, not due to “(wo)man-made” aberrations. When wages go up for reasons other than productivity, you’ll have the inflation we do and workers are worse off than before. Telling “joe/jill six-pack” that his/her $2/hour more is great when houses went up 30%, food is up easily 20%, and gas is double of a year ago may not ring well. In the words of Joe B, “C’mon!” :)

    • unamused says:

      “Wages should go up due to increased productivity”

      You don’t understand what ‘productivity’ is.

      Productivity is a function of how much you can extract from workers relative how little you can pay them – and inflation-adjusted employee compensation has been nearly flat since the 1970s.

      Wages don’t go up due to ‘increased productivity’. They go up because employees demand it, which is harder to do now that labor unions have been crushed.

      The FIC has taken virtually ALL the benefit of increases in ‘productivity’ over the last 50 years – and now it wants whatever’s left. And as the general population is increasingly reduced to wage slavery, debt peonage, and rent serfdom they’re virtually certain to get it.

      • Halibut says:

        Sometimes, labor unions “crush” their own members. Labor strikes in relative perpetuity can usher in lots of heavy equipment.

        Nothing says “ok, you win” quite like the barren shock of a factory cleaned off the face of the earth in the dead of night. Gone. Nothing but dirt.

        • WinterHill says:

          You call it labor unions “crushing” their members.

          I call it businesses not able to support their workforce. For whatever reason.

          Sure, labor strikes may be the final nail in the coffin for a struggling business. But a business that it able to support its workers will never have strikes in perpetuity, union or not.

    • Wisdom Seeker says:

      Wages as a share of Gross Domestic Income are in a Federal Reserve dataset that goes back to 1948 or so.

      The usual level was 49-52% from 1948-1975.

      Wages/GDI slid from 1975-2014 and may have bottomed at 42% in 2014.

      Wages/GDI were back near 45% when last reported (August 2021).

      It would be a Good Thing in many, many ways if Wages/GDI returned to the 50% level.

      This has nothing whatsoever to do with productivity and everything to do with the underlying political balance between capital and labor. Labor scarcity and business competition (antitrust enforcement) help to counteract wealth inequality and offset corporate tendencies towards monopolies and fascism.

      The Wages/GDI balance has very far-reaching effects on human rights and well-being.

      • unamused says:

        Good catch, WS. Thanks.

      • HowNow says:

        “…and offset corporate tendencies towards monopolies and fascism.” One other tendency is for corporate boards to hire psychopaths for the C-suite.

    • Kentucky says:

      Wages should go up when they have been historically suppressed due to racism and sexism. Pay based on productivity is a separate issue once the playing field has been leveled.

      • Brian says:

        You must have missed the boat. Affirmative action for these non-suppressed groups has been in effect since the 1970’s. That’s going on 50 years now. Wake up.

    • c_heale says:

      Where does increased “productivity” come from. Cheaper inputs (energy, workers), or increased sales. No-one has money so sales won’t increase. Workers have been pushed to far and now won’t work in the worst jobs (the restaurant industry being one of the worst), and cheap energy has gone for good. There will be no increased productivity in future.

  15. Cas127 says:


    Not to make more work for you, buy my guess is that running a 1980-2000 establishment payroll-employment trend line through 2022 would really illustrate just how crippled job creation was over the last 22 years (horrifically so, in spots).

    That is the real economy problem that the Fed has recklessly used ZIRP/money printing to “fix”/cover up/destroy the currency.

    Earlier two decade intervals saw millions and millions (and millions) more jobs created than 2000-2022 did.

    And the problem was there long, long before the pandemic.

      • Robert Hughes says:

        Thank you for long term chart. Says it all.

        • Cas127 says:

          That chart explains 40 years of American history and government policy in one picture.

          The American “job creation miracle” started dying 40 years ago and we are tens of millions of jobs below the 1982 and 1990 trendlines.

          And American leadersh*t pretends it doesn’t understand the roiling anger of the public.

      • Cas127 says:

        Thank you, Wolf, you are very generous with your time.

        As expected, those are some huge shortfalls.

        It could almost make you feel sorry for the Fed/DC, except they are so fundamentally *dishonest* about the real underlying problem (huge job creation shortfall) and will do almost *anything* (unprecedented money supply manipulation) to avoid having to address and deal with it more directly.

        Which is weird, because the Dems used to habitually eat out on this stuff (admittedly ginning up a lot of awful “fixes” in the process, but at least they focused on the underlying issue).

        Instead, about 20 years ago, it seems that DC collectively decided it was better to “deal” with one vast macroeconomic dislocation (huge job creation shortfall) with another huge macroeconomic dislocation (f*cking around with interest rates forever, using money printing and other tools) all the while trying very, very, very hard to avoid admitting there are major economic dislocations going on.

        And you can say that manipulating interest rates *are* the fix (if only as “that whose name must not be spoken”) but after decades of failure/tiny success, you can’t really see ZIRP as a success.

        It has been closer to some “mad Dr.” sorta crap, whose side effects are awful and which really didn’t fix the initial problem.

        And this has been going on *decades*.

      • Cas127 says:

        Gazing at this beauty has me wondering where the 1982 and 1992 trendlines would intercept today on the x axis (since they soar off the chart).

        My guess is that the 1982 trendline of the 80’s recovery, would be at least 200 million today (vs. the actual 150 or so million) – that means 50 *million* jobs short of what we would have if the 2000-2020 period grew jobs as the 80’s did.

        That is incredible – a full 33% more of the *entire country* employed.

  16. Jay says:

    Keep chugging along, labor force. Building, in large part, drives the economy. Layoffs will start in residential first in X months. Who knows what X is, but it certainly doesn’t seem like double digits. From there, it will spread out, hopefully followed by upticks in foreclosures.

    But all is not lost, friends, especially if Fed 2.0 backed up by a Congress sporting its fancy, new MMT means of managing debt bring back rent & mortgage forbearance when it all heads south. If this happens, we probably have one more 3-5 year uptick that starts mid 2024.

    Then, the big one hits, once our national debt approaches $40T and Congress is forced to solve SSTF insolvency by 2030. And, who can guess how much Medicare Part B (doctors) will be in the red by then? It was $495B last year. $1B+? Any takers?

    • Old School says:

      If you control the money you can play an endless number of games. Yield curve control, perpetual bonds, selective defaults to foreign creditors you don’t like.

    • Tony says:

      Yes, I agree, after the first scare there will be a rebound, and the real depression won’t start until the late 2020’s to early 2030’s.
      I’m the medical field here. I wouldn’t want to be in the position of future doctors who are just entering med school now. After school and then residency, they will start their money-making years around 2030, most being $300-$500k in debt. And likely then facing mandatory drastic pay cuts and health care has crippled the nation.

  17. Cas127 says:

    I know we are talking jobs here, but all economic nightmares are one, and ApartmentList just came out with its monthly update and it has a lot of useful graphs depicting the rental mkt insanity.

    Median national rent inflation in 2018, 2019, and 2020: 3%, 2%, and -2%.

    And 2021? 17.5

    Let that sink in.

    And vacancy levels?

    7% in 2019 and 2020.

    5% in 2021 (Is that really enough to trigger an 18% price hike? And how do you get falling vacancies after 1 million plus have been killed by Covid?)

    Simply recouping (still partially) the 20 million jobs lost to Covid doesn’t seem to explain this.

    In 2019, there were more jobs and 2% rent hikes.

    In 2021 there were, on average, millions of fewer jobs…but rents went up 18%.

    • HowNow says:

      Be sure you don’t start thinking that residential property owners have hiked rents to make up for “forbearances” or non-payment of rents. Residents file for govt. “rental assistance”, and a check is sent to the landlord to cover past unpaid rent.
      Landlords have hiked rents for windfall profits, following others in their market, increasing rental fees. Don’t pin the blame on Powell, or the gummint, politics or the currently very popular scapegoat, conspiracies. It’s a human problem: greed and not giving a shit about people who have very little.

      • Cas127 says:

        I’m willing to think about the possibility that landlords may have gamed the Covid rental recoupment system (not sure if the timing works out, but maybe).

        Something weird does seem to be going on, because a lot of macro variables suggest that rents should not have spiked by 8 or 9 times the norm in a single year.

        If so, then the landlords have played into the worst villain fantasies of the Left and in the era of the internet, it won’t be long before they are put forward to be the next Putin/patsy (perhaps justifiably). It is odd, though, that smaller food and oil inflation have been getting *all* the MSM attention, while historic inflation in 35% of the population’s largest expense goes unremarked in the mjr media.

        This inflation would also seem unsustainable (in the sense of not only not continuing, but having to unwind) because 1) the G’s rent recoupment scheme is over and/or 2) the overwhelming mass of renters’ cannot economically sustain this level of inflation in their largest expense (at worst, doubling or tripling up in households might result – ie, you can’t get inflationary blood from a stone whose income has stagnated for many years).

        • HowNow says:

          As I said, when in doubt, create a conspiracy:
          “If so, then the landlords have played into the worst villain fantasies of the Left and in the era of the internet, it won’t be long before they are put forward to be the next Putin/patsy (perhaps justifiably). It is odd, though, that smaller food and oil inflation have been getting *all* the MSM attention, while historic inflation in 35% of the population’s largest expense goes unremarked in the mjr media.”

        • c_heale says:

          When the landlords are hedge funds and vulture capitalists, then they are the worst villains possible.

      • Old School says:

        If you expect your landlord to treat you special then you need to rent from someone you know or a family member who really does care about you. Otherwise you have to pay rent at a market price because it’s an investment for the landlord. Without it being an investment, the building wouldn’t exist.

        • NBay says:

          Just remembered, there are plenty of bottles to put ships in in the dumpster behind any bar or fine restaurant. In cool and challenging shapes, too.

    • Eugene says:

      What rent hike 18% are U talking about???My rent was the same for 2021 and a new 2year lease only 1.5% up,NYC.Rent control building.

  18. Ben Sargent says:

    Reckless Fed and of course reckless spending by governments.
    40 year stock and bond market bulls.
    QT and higher rates will cause some asset deflation i hope for the workers sake .
    Need inflation under control.
    Retirement don’t understand that concept maybe created by governments and banks to warehouse funds and charge fees.
    People work until they can’t for thousands of years. Cheap energy created a new product and ability to reduce human labor and allow for “retirement”
    Are people retired globally?
    The world is not ending and economic activity does fluctuate.
    The stim and free money brought several years of spending forward and of course inflation and potential for recession as well.
    Trust America a great economic system!
    Retirees are a drag on society and economiy who take more from the system than they produce in retirement!
    (I am “retired” because of age discrimination) and limited housing mobility. I could move to a different town or state and find employment but at 65 selling and buying homes is a money loosing deal.

    • Old School says:

      Retirees are a drag on the system. Not sure about that. If you worked and saved say a million dollars, then you are providing the capital for one or two people to work and compete in the economy. Everything you see is because somebody worked and didn’t consume it all.

  19. ben sargent says:

    No one in the financial news provides insight or the math behind the npv calculation of growth stocks and their real earnings going forward above the rate of inflation. I don’t know the equations but do know both the expense side and the cost of funds side are going up which has to cause the P side of PE to drop and the forecasted E earnings has to as well for growth stocks. Triple crown, Three Peat, Strike out!

    • Cas127 says:


      The NPV/discounted cash flow formula are not that hard to understand or explain.

      And such an understanding would reveal how powerful/risky/dangerous/stupid screwing around with interest rates is (via money printing or otherwise).

      But the news media (including the business media) has been dead at the switch for decades.

      In Reagan’s 80’s one too low COLA for grandpa’s Social Security would trigger an immediate MSM onslaught of “Grandma has to eat dog food” and “Grandpa was turned into Soylent Green” stories on all three networks. For months.

      But 20 *years* of utter interest rate destruction has been met by almost complete media silence.

      • HowNow says:

        One comment on COLA sets the left wing on fire, eh. And poor Reagan, so maligned by the left wing media. Ah shucks. It’s just a bloomin’ conspiracy, it is.
        Your accuracy leaves something to be desired. If you say this stuff over and over again, which you do, it may become truth.

    • Old School says:

      The reality is the amount of cash a fast growing company is going to generate over it’s life can’t be determined to any degree of accuracy. It’s gambling, but if you diversify enough some most likely will be winners. You might can be able to predict the cash flows pretty well on boring utilities and consumer staples to make a fair estimate of stock price.

    • Augustus Frost says:

      Earnings are an accounting number which 99%+ of “investors” can never monetize aside from dividend payouts. Most of it is buried in the balance sheet (which virtually no one cares about until the company is about to fail) never to see the light of day.

      Stock buybacks aren’t cash in the shareholder’s pocket either. That’s total BS, as they still own their shares. It’s one form of financial engineering.

      The P/E ratio is one of the worst indicators of value.

  20. SocalJimObjects says:

    It’s so bad, the Fed has said they won’t do 75 bps hike.

    • SpencerG says:

      It really is amazing that they think the can jawbone the Inflation Genie back into the bottle. I have read TWO reports about different Fed governors this week talking about half point increases. That isn’t going to inspire the confidence needed.

      To be generous, perhaps they are waiting for the November elections to be over before making their big move. People forget, but even the Volcker Fed was forced to do that. But so far I am not seeing anybody on THIS Fed who ought to be mentioned in the same breath as Paul Volcker.

      • Old School says:

        It’s easy to lower interest rates and QE, but when they tighten they have no clue about what’s going to blow up and when. Powell is smart enough about markets that he knew he had to give a lot of notice and to start to ramp up slowly to give people a chance to reposition.

        Once they get to full QT they will be tightening at about the equivalent of 1% a month (including 1/2% rates at each meeting) and my guess is a month or so of that is all it’s going to take to tank the economy.

        Once you tank the economy widespread inflation will be solved although there might be inflation in limited items due to supply chain.

  21. Paul says:

    Where are the rest of the workers, retired or are they now part of the growing underground economy which I read took off when covid started.
    One way this could be checked is the demand for cash payment which increased during the GFC and might also show up in the covid period along with more income tax evasion.
    This is QT is going to destroy currencies and make everyone poorer.

    • Augustus Frost says:

      The US is getting poorer, with or without QT. It’s not possible to permanently disguise the results of extended economic and social decay forever, as this is the actual root cause behind declining living standards.

      Extended QE and above trendline fiscal deficits create temporary fake “wealth” and fake “growth”.

      As for currency values, you have it backwards.

      QT is going to be necessary to support FX rates. Whichever country QTs the most will support their currency the most by restricting the supply of credit the most. It’s QE and more directly, loose fiscal policy that destroys currency values.

  22. IsoscelesT says:

    And right now, someone somewhere is looking down from their veranda and saying, “Isn’t it touching all the little people tightening their belts.”

    • NBay says:

      The one I always heard from a rich lobbyist relative and all his private industry and owned politician pals was, “I wonder what the poor people are doing?”
      It never got old, and always got grins and chuckles.

      Sociopaths are like that.

  23. Xaver says:

    As long as rates go up we are in the shorting season. And money is still flowing into equity funds. Most people have no clue what’s coming. It should be worse than 2008 because the debt pile is higher.

    Once rates are cut again, if too early, I will buy more gold.

  24. 7 percent mortgages by September.

    9 percent mortgages by December.

    FED has wanted to raise rates for a long time but could not.

    They are not going to waste this crisis.

    The resulting physics are obvious.

  25. Russell says:

    AGAIN – There is no shortage of workers, only people willing to work!

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