Home Overheated Labor Market? US Capacity Utilization Rises To Near 80% (Fed Too Slow To Remove Stimulus As Supply-Chain Strain Increases)

Confounded Interest ^ | 04/15/2022 | Anthony B. Sanders

[Browns Ultra Fan]

The good news is that US industrial production rose 0.9% in March. The bad news? US capacity utilization rose to 78.3% indicating that the labor market is overheating.

Notice that prior to Covid, The Fed began rising raising its target rate as capacity utilization was increasing towards 80%. But once The Fed Funds Target rate (upper bound) hit 2.50%, capacity utilization started to cool off. Then Covid stuck.

Since Covid struck and The Fed massively expanded its balance sheet, capacity utilization has increased. But this time around, The Fed has been sloth-like in its removal of monetary stimulus.

Of course, The Fed has been slow to cool inflation which is the highest in 40 years. And supply-chain strains are peaking again (isn’t Mayor Pete in charge of infrastructure?) This is helping to drive prices up.

And don’t forget that REAL average weekly earnings YoY are falling.

Here is Fed Chair Powell explaining how The Fed will withdraw its historic monetary stimulus.

[Browns Ultra Fan]

God, this is a friggin' nightmare!!!

[Organic Panic]

And those millions of illegal aliens flooding the housing market??? AND, in many cases, getting assistance for housing. Americans last, in everything, always.

[dangus]

The fed needs to immediately halt and undo its QE infinity. But the notion that 78% utilization is overheated is riotous, seditious, and simply downright evil. 80% is the low end of normal, and represents a gargantuan level of underutlization and waste. Think of it: Even at 80%, TWENTY percent of our industrial capacity is sitting in mothballs. Think of the ENORMOUS dangers industry took on for JIT manufacturing, just to save on some warehouse space. Then imagine TWENTY percent of industrial capacity going to rot.