Posted on 08/04/2022 7:18:17 AM PDT by ConservativeInPA
ECONOMIC REPORT The numbers: Some 260,000 people applied for unemployment benefits at the end of July, keeping jobless claims near a nine-month high and signaling a softening in the U.S. labor market as the economy slows.
initial jobless claims increased by 6,000 from a revised 254,000 in the prior week.
Economists polled by the Wall Street Journal forecast initial jobless claims to total 260,000 in the seven days ended July 30.
(Excerpt) Read more at msn.com ...
Ask yourself, how many government employees lost their jobs? Assaults on our freedoms, endless spending, ever increasing regulations, forever wars, wetback invasion, crime and violence are all a product of government and lazy ass government employees. The fix to our economy is simple. Shutter massive portions of government and cut spending. Let Americans thrive using their own money and innovation. Send these lazy ass government employees to the unemployment line instead of hard working Americans. They caused this fluster cuck.
Just WoW. Totally unexpected!!
Lagging Indicators
Unlike leading indicators, lagging indicators shift after the economy changes. Although they do not typically tell us where the economy is headed, they indicate how the economy changes over time and can help identify long-term trends.
1. Changes in the Gross Domestic Product (GDP)
GDP is typically considered by economists to be the most important measure of the economy’s current health. When GDP increases, it’s a sign the economy is strong. In fact, businesses will adjust their expenditures on inventory, payroll, and other investments based on GDP output.
However, GDP is also not a flawless indicator. Like the stock market, GDP can be misleading because of programs such as quantitative easing and excessive government spending. For example, the government has increased GDP by 4% as a result of stimulus spending and the Federal Reserve has pumped approximately $2 trillion into the economy. Both of these attempts to correct recession fallout are at least partially responsible for GDP growth.
Moreover, as a lagging indicator, some question the true value of the GDP metric. After all, it simply tells us what has already happened, not what is going to happen. Nonetheless, GDP is a key determinant as to whether or not the United States is entering a recession. The rule of thumb is that when the GDP drops for more than two quarters, a recession is at hand.
2. Income and Wages
If the economy is operating efficiently, earnings should increase regularly to keep up with the average cost of living. When incomes decline, however, it is a sign that employers are either cutting pay rates, laying workers off, or reducing their hours. Declining incomes can also reflect an environment where investments are not performing as well.
Incomes are broken down by different demographics, such as gender, age, ethnicity, and level of education, and these demographics give insight into how wages change for various groups. This is important because a trend affecting a few outliers may suggest an income problem for the entire country, rather than just the groups it effects.
3. Unemployment Rate
The unemployment rate is very important and measures the number of people looking for work as a percentage of the total labor force. In a healthy economy, the unemployment rate will be anywhere from 3% to 5%.
When unemployment rates are high, however, consumers have less money to spend, which negatively affects retail stores, GDP, housing markets, and stocks, to name a few. Government debt can also increase via stimulus spending and assistance programs, such as unemployment benefits and food stamps.
However, like most other indicators, the unemployment rate can be misleading. It only reflects the portion of unemployed who have sought work within the past four weeks and it considers those with part-time work to be fully employed. Therefore, the official unemployment rate may actually be significantly understated.
One alternative metric is to include as unemployed workers those who are marginally attached to the workforce (i.e. those who stopped looking but would take a job again if the economy improved) and those who can only find part-time work.
4. Consumer Price Index (Inflation)
The consumer price index (CPI) reflects the increased cost of living, or inflation. The CPI is calculated by measuring the costs of essential goods and services, including vehicles, medical care, professional services, shelter, clothing, transportation, and electronics. Inflation is then determined by the average increased cost of the total basket of goods over a period of time.
A high rate of inflation may erode the value of the dollar more quickly than the average consumer’s income can compensate. This, thereby, decreases consumer purchasing power, and the average standard of living declines. Moreover, inflation can affect other factors, such as job growth, and can lead to decreases in the employment rate and GDP.
However, inflation is not entirely a bad thing, especially if it is in line with changes in the average consumer’s income. Some key benefits to moderate levels of inflation include:
It encourages spending and investing, which can help grow an economy. Otherwise, the value of money held in cash would be simply corroded by inflation.
It keeps interest rates at a moderately high level, which encourages people to invest their money and provide loans to small businesses and entrepreneurs.
It’s not deflation, which can lead to an economic depression.
Deflation is a condition in which the cost of living decreases. Although this sounds like a good thing, it is an indicator that the economy is in very poor shape. Deflation occurs when consumers decide to cut back on spending and is often caused by a reduction in the supply of money. This forces retailers to lower their prices to meet a lower demand. But as retailers lower their prices, their profits contract considerably. Since they don’t have as much money to pay their employees, creditors, and suppliers, they have to cut wages, lay off employees, or default on their loans.
These issues cause the supply of money to contract even further, which leads to higher levels of deflation and creates a vicious cycle that may result in an economic depression.
5. Currency Strength
A strong currency increases a country’s purchasing and selling power with other nations. The country with the stronger currency can sell its products overseas at higher foreign prices and import products more cheaply.
However, there are advantages to having a weak dollar as well. When the dollar is weak, the United States can draw in more tourists and encourage other countries to buy U.S. goods. In fact, as the dollar drops, the demand for American products increases.
6. Interest Rates
Interest rates are another important lagging indicator of economic growth. They represent the cost of borrowing money and are based around the federal funds rate, which represents the rate at which money is lent from one bank to another and is determined by the Federal Open Market Committee (FOMC). These rates change as a result of economic and market events.
When the federal funds rate increases, banks and other lenders have to pay higher interest rates to obtain money. They, in turn, lend money to borrowers at higher rates to compensate, which thereby makes borrowers more reluctant to take out loans. This discourages businesses from expanding and consumers from taking on debt. As a result, GDP growth becomes stagnant.
On the other hand, rates that are too low can lead to an increased demand for money and raise the likelihood of inflation, which as we’ve discussed above, can distort the economy and the value of its currency. Current interest rates are thus indicative of the economy’s current condition and can further suggest where it might be headed as well.
7. Corporate Profits
Strong corporate profits are correlated with a rise in GDP because they reflect an increase in sales and therefore encourage job growth. They also increase stock market performance as investors look for places to invest income. That said, growth in profits does not always reflect a healthy economy.
For example, in the recession that began in 2008, companies enjoyed increased profits largely as a result of excessive outsourcing and downsizing (including major job cuts). Since both activities took jobs out of the economy, this indicator falsely suggested a strong economy.
8. Balance of Trade
The balance of trade is the net difference between the value of exports and imports and shows whether there is a trade surplus (more money coming into the country) or a trade deficit (more money going out of the country).
Trade surpluses are generally desirable, but if the trade surplus is too high, a country may not be taking full advantage of the opportunity to purchase other countries’ products. That is, in a global economy, nations specialize in manufacturing specific products while taking advantage of the goods other nations produce at a cheaper, more efficient rate.
Trade deficits, however, can lead to significant domestic debt. Over the long term, a trade deficit can result in a devaluation of the local currency as foreign debt increases. This increase in debt will reduce the credibility of the local currency, which will inevitably lower the demand for it and thereby the value. Moreover, significant debt will likely lead to a major financial burden for future generations who will be forced to pay it off.
9. Value of Commodity Substitutes to U.S. Dollar
Gold and silver are often viewed as substitutes to the U.S. dollar. When the economy suffers or the value of the U.S. dollar declines, these commodities increase in price because more people buy them as a measure of protection. They are viewed to have inherent value that does not decline.
Furthermore, because these metals are priced in U.S. dollars, any deterioration or projected decline in the value of the dollar must logically lead to an increase in the price of the metal. Thus, precious metal prices can act as a reflection of consumer sentiment towards the U.S. dollar and its future. For example, consider the record-high price of gold at $1,900 an ounce in 2011 as the value of the U.S. dollar deteriorated.
The plan is working.
Stagflation.
81 million voted for it.
I live in Reno, Nev TV market.
Channel 8—KOLO—ABC affiliate is making graphic errors all the time.
Usually in their ticker-—or, on Friday AM, the ticker is running that is THURSDAY’S ticker. Again & again...
Today-—the AM anchor-—Josh—is reporting about the new jobless claims of the prior week. There are LARGE graphics over his space on camera-—
That graphic says: “JOBLESS CLAIMS WENT UP 600,000 LAST WEEK.”
Apparently no one there can read anything before it gets on air.
I called & the pleasant lady who answered the phone didn’t seem to understand what I was saying....She stumbled around & said: “I will look into this”. I told her that IF NEW UNEMPLOYMENT CLAIMS WENT UP 600,000 in one week, the economy would be crashing around her everywhere.
I am beginning to think KOLO is only a training ground for rookie “news persons”.
WOEFUL ERRORS. Shame on station manager.
The “Percentage” Biden admin is still using==3.6%.
NOT CORRECT.
The ubiquitous “help wanted” signs at fast-food eateries and convenience stores will soon vanish.
Great post. Keep in mind that the only thing being done to fix the economy is changes in monetary policy (interest rates). There has been zero change in fiscal policy. The increase in unemployment however is signaling that the private sector is beginning their part of the solution. Businesses are starting to get leaner, throwing out dead weight, and increasing productivity. It sucks for the people that remain employed. They have to work harder and longer.
I strongly agree with your economic solutions.
However neither party will shutter massive portions of government and cut spending. Both parties love big government as its the source of their power, perks and permanence.
The system is thoroughly corrupt. I don’t see how we can fix that at this point as both parties are in on the royal scam.
Excellent post. Thanks for sharing.
And they’re gonna add 87,000 new lifetime IRS jobs!
You are right. I haven’t heard a single politician give any specifics about how they will solve the problem. Just discount everything Democrats say. They racked up another trillion in new spending this past month. We don’t even hear the most conservative of Republicans talk about small cuts in government.
The changes we require need to be forced from the grassroots.
Stagflation.
81 million voted for it.
************
The number of votes is just that, as votes do not necessarily equate to people anymore. That connection has been broken by electoral legerdemain and fraud.
Your main point about cutting the government down to size is a very important one. A massive and growing government is the beast that feeds the corruption that nourishes the Deep State. It also serves as a weapon the Left uses to expand its power.
The central issue of the day to me is shrinking big government. If we can’t find people to do that one thing we have no chance of ever restoring the republic we are losing. (I would argue that we are presently a republic in name only.)
I strongly believe this is one thing that we must use as a litmus test for our votes. I mean, why vote for anyone who isn’t totally committed to cutting back the size, scope and power of the government? It makes no sense to keep feeding the out of control beast.
My younger brother and his wife formerly worked for the Federal Bureau of Prisons(Justice Dept). They both retired at 49 & 52 respectively.
During the Great Recession my brother had the audacity to complain that neither one had gotten a raise in salary that year. I proceeded to tell him that as a straight commission lumber broker I had taken about a 50% cut in pay that year.
However, several people I knew had lost their jobs. So, I was glad that my glass was still half full and to quit your whining you little BEOTCH.
My brother did not talk to me for several months after that.
Gas prices are still very high.
Grocery prices are way up.
Restaurant prices are way up.
Inflation is real.
And unemployment numbers are way up.
Seriously, why are there so many “Help Wanted” signs when unemployment numbers are way up?
Hi.
“Seriously, why are there so many “Help Wanted” signs when unemployment numbers are way up?”
When you pay people to sit home (Rona payments, etc), why work!
Sad, but this will end soon.
5.56mm
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