On the same day the International Monetary Fund cut its growth forecast for the U.S. economy, Atlanta Federal Reserve President Raphael Bostic warned that the “transitory” bout of inflation “won’t be brief.” How do you spell stagflation? B-i-d-e-n-o-m-i-c-s.
The IMF report, released Tuesday, has the international organization lowering growth globally by a 10th of a percentage point and for the U.S. by a full percentage point.
That’s just the latest sign that the economy isn’t building back better under Biden. It might not be building back at all.
Take a look at the GDPNow estimate produced by Bostic’s Atlanta Fed. Basically, GDPNow tries to calculate the current quarter’s GDP in real time by tracking data that the Commerce Department uses to compile the official GDP number — which won’t come out until a month after the quarter has ended.
As a result, the “nowcast” can change as new data emerge. Look what’s happened in the third quarter. The first GDPNow estimate, produced in late July, had growth topping 6%. That’s where it stayed until late August. But then a flood of new data came out showing the economy had sharply decelerated. The “nowcast” suddenly dropped to below 3% growth.
The latest “nowcast” has GDP growth for Q3 at a mere 1.3%. If that turns out to be correct, which is fairly likely given GDPNow’s track record, it will mark the slowest quarterly growth in years. And it would come despite Biden’s $2 trillion stimulus, passed earlier in the year, which was supposed to “rescue” an economy that had shown consecutive quarterly growth since the spring 2020 COVID lockdowns of 33.8%, 4.5%, 6.3%, and 6.7%.
Meanwhile, the latest jobs report, which came out Friday, was an enormous disappointment — Barron’s called it “ugly” — showing just 194,000 jobs being added in September, despite predictions of 500,000. That came after the August report, described then as a “shocker,” which showed 235,000 jobs (later revised to 366,000) created where economists were forecasting 720,000.
Rep. Kevin Brady, R-Texas, said, “President Biden is now a whopping 944,000 jobs short of what he promised from his last stimulus and worse, has lost the confidence of the American people to lead the economy.”
Biden rushed out to praise the September report, pointing to the drop in the unemployment rate, which in this case reflected the fact that so many people have dropped out of the labor force (and don’t get counted as unemployed). That’s despite the more than 11 million job openings at the moment.
As Jason Fruman, who headed President Barack Obama’s Council of Economic Advisers, noted in a tweet: “Job openings: 11.7m Unemployed: 7.7m The 1.5 openings per unemployed is the highest ever recorded.”
There’s an attempt to blame all this on the Delta variant. But that can’t explain everything. The economy isn’t shutting down like it did last year, and this version is far less deadly than in the past.
But, naturally, Democrats are using lousy economic reports to call for still more deficit-financed government spending, along with growth-killing tax hikes on businesses and investors. That won’t accelerate growth but is likely to add fuel to the spreading inflationary fire.
On Wednesday, the Bureau of Labor Statistics reported that the consumer price index edged up in September to 5.4%, the fastest in 13 years.
AAA reports that the price of gasoline, which went up 7 cents a gallon in the past week, is now at a seven-year high.
In the conference call with analysts on Tuesday, Lars Florness, the chief executive of Fastenal Co. — which makes supplies used by construction and industrial manufacturers — said that product and shipping cost inflation “isn’t just high,” it’s “brutally high.” “The chaos and … the impact, not just from a financial perspective, but from a toll that takes on our human capital, is immense.”
The Atlanta Fed’s Bostic said he no longer refers to inflation as “transitory” because the current bout could last well into next year. “The real danger,” he said, is that the longer price hikes go on, “the more likely they will shape the expectations of consumers and businesspeople, shifting their views on pricing and wages in particular.”
That danger is already upon us. A survey by the Federal Reserve Bank of New York finds that inflation expectations are higher than they’ve been since 2013.
Those of us here who weren’t born yesterday — unlike most pundits on TV and everyone commenting on Twitter — remember that the last time we saw sluggish growth and high inflation, along with energy crises and foreign policy crises. It was called stagflation and it crippled the economy.
“Investors should also be aware of stagflation risk, which is a combination of inflation with slow economic growth and the market reaction to stagflation is not typically favorable to investors, as many asset classes tend to fall in value at the same time during stagflation,” Nancy Davis, founder of Quadratic Capital Management, told The Street.
It’s starting to look like the only thing Biden is “building back” with his combination of reckless spending and massive tax hikes is the misery of the 1970s.
— Written by the I&I Editorial Board
Using these vague “policy violations,” Google is now threatening to demonetize us. It’s part of Big Tech’s effort to silence conservative voices.
Let’s go Brandon! Democrats strike again. Hopefully this time we can swamp the margin of fraud and vote these idiots out of office before they completely trash the country. However, aren’t Biden’s tweets such a polite improvement? It’s worth destroying the country for polite tweets, isn’t it?
Progressive Democrats are suffused with political vertigo, dizzy from an errant stream of consciousness spun from a kaleidoscope with only bright blue glass chips. Their lives are a seething chaos, a spectacle of painted ball gowns and restroom intruders, a carnival of teleprompter lies and border fibs. Persuaded by their own rectitude, they warble a discordant tune of fruitless desperation for the rest of America while sporting a cure-all as old as Methuselah and as palsied as a withered liberal thought – that if only we hoi polloi would quit bellyaching, they could get on with the heavy lifting of ultra-liberal governance. Frankly, Joe and Nancy and Chuckie and Bernie and Elizabeth, I don’t give a damn.
This inflation and shortage of oil has been planned by the dems for some years now. The dems with Soros, Gates, et al, want to sow chaos beginning this winter so the economy finally collapses and the gov’t will have no choice but to consume everything. America will be a marxist state by December 2022 which will totally please Biden and Soros in that they finally achieved their goal.