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US Adds 263,000 Jobs In November Despite Effort To Slow Economy


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https://www.bnnbloomberg.ca/u-s-hiring-and-wages-top-forecasts-keeping-pressure-on-fed-1.1854077

 

The US added an estimated 263,000 jobs last month, 63,000 more than the 200,000 forecast while the previous months gains were revised up to 287,000

 

The stronger than anticipated gains may provide a headache for Jerome Powell who is trying to slow the economy with rate hikes and also signal the market that monetary tightening isn't finished yet

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TortureMeOnReplay

Retailers really should have discounted items better for Black Friday. I feel like it would have been a much better money sink than raising rates. 

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1 hour ago, TortureMeOnReplay said:

Retailers really should have discounted items better for Black Friday. I feel like it would have been a much better money sink than raising rates. 

So we have too much demand that cannot be supplied and ur solution to the imbalance is to have retailers make ppl buy even more stuff :selena:

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TortureMeOnReplay
3 hours ago, Economy said:

So we have too much demand that cannot be supplied and ur solution to the imbalance is to have retailers make ppl buy even more stuff :selena:

Their warehouses are full. Also things such as digital content and physical movies, games, and music are cheap and easy to produce. 

https://www.cnbc.com/2022/07/26/the-bigger-warehouse-story-behind-the-walmart-consumer-demand-issues.html

 

https://www.cnbc.com/2022/11/13/retailers-biggest-holiday-wish-is-to-get-rid-of-all-that-excess-inventory.html

 

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1 hour ago, TortureMeOnReplay said:

This seems for now like either individual specific to some companies or a brand new trend

 

We've been having demand outstrip supply and inflation surging largely cuz of it.

 

The fact that sellers were still reluctant to give better deals kinda still suggests an imbalance there. Or if that imbalance just finally turned the tables there's usually a little lag until we see changed behavior 

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I mean, more jobs is pretty good news in the end and shows the resilience of the US economy. I remain optimistic and I think bringing down inflation with a soft landing or very mild recession is possible in the US. The EU - not so certain.

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old sanuk

Been there, done that. This is 1975-82 all over again. History shows inflation does not abate until Central Bank rate exceeds current inflation rate with a hard landing recession. Back then the Central Bank pussyfooted along raising and pausing rate for ~4 to 5 years until Chairman Paul Volcker raised rate to 20% in June 1981, breaking the inflation cycle into the recession of 1981-82 and subsequent decline of inflation and economic recovery. People today in general don’t study or know history and have no idea of what’s likely to happen.

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4 hours ago, old sanuk said:

Been there, done that. This is 1975-82 all over again. History shows inflation does not abate until Central Bank rate exceeds current inflation rate with a hard landing recession. Back then the Central Bank pussyfooted along raising and pausing rate for ~4 to 5 years until Chairman Paul Volcker raised rate to 20% in June 1981, breaking the inflation cycle into the recession of 1981-82 and subsequent decline of inflation and economic recovery. People today in general don’t study or know history and have no idea of what’s likely to happen.

I'm not so sure the same rules apply now that they did in 1975-82

 

First of all part of the demand-supply imbalance this time around is not just a hot economy. It's also lingering pandemic disruptions that has set supply ceilings artificially lower. China the last holdout hasn't been helping there but the supply chain market is start to have some success bypassing China. And that will de deflationary

 

The 2nd thing, is that debt and leverage is soooooo much higher now than in the 1970s and 1980s. It takes smaller increases to have the same amount of effect when your total debt load is higher

 

A Central Bank Rate Hike from 0.25% to 4% may not seem like much when wages are rising 5% and inflation over 8% in nominal terms...

 

But ppls debts are generally Multi year. I mean mortgages can be amortized for decades and a 2% increase on a mortgage rate doesn't just apply for 1 year, it applies to all 15 or 20 years a person has left all at once.

 

In terms of actual payments, a mortgage can go up 50% in terms of payments (5X rate of inflation). 

 

When u look at it that way, u realize that in a highly leveraged economy rates are already high enough to be "restrictive" and proffesional knew what they were saying when they said it's rates past "neutral"

 

A lot of self proclaimed economists are saying online a rate below inflation will never break the economy but I don't think they are looking deep enough into all its impacts in absolute terms.

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Economy
6 hours ago, NCgaga said:

The US economy tends to always rebound faster than everyone’s. 

Rebound? Rebound from what? It hasn't crashed yet

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6 hours ago, Luc said:

I mean, more jobs is pretty good news in the end and shows the resilience of the US economy. I remain optimistic and I think bringing down inflation with a soft landing or very mild recession is possible in the US. The EU - not so certain.

But it could also force the Fed to feel it has to keep hiking. Given the delays in effects of higher rates, up side surprises in employment may end up increasing the risk of overhiking by banks and causing a more severe downturn

 

Canada's latest numbers also came in. Not as impressive as the US so I didn't bother to make a thread but it also came hotter than expected and unemployment rate fell 0.1% when it's supposed to be stabilizing slightly higher

 

There is now narrative among analysts that the consensus that the current rate of 3.75% which was believed to be raised to 4.25% next week and be the last hike may end up not being the last hike after all

 

They are now speculating at least one more hike in January minimum cuz the data on GDP and jobs keeps coming out more resilient than expected

 

I'm also shocked Canada so far is withstanding the rate hikes so well. We have higher debt levels than the US and a higher percentage of our population uses variable rate mortgages or short term fixed rate mortgages that renew more often. Not to mention our overall economy, labor market and GDP are more heavily reliant on the housing sector as well than the US

 

So we should be way more sensitive to rate changes than the United States. The fact we ain't feeling much (yet) means measurable impact in the US is probably not right around the corner either

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old sanuk

In the 70s inflation was stoked by the oil supply crisis, quintupling barrel price through the decade; thereby severely disrupting supply chains and the economy. As inflation took off, central bank rates increased until societal pain & politics prematurely constrained rates; in both ‘77 and ‘78 rates actually went down and up more again as inflation was not contained.

Then, most mortgagees in Canada were on 30 year both amortization & term fixed rate(!) mortgages so real estate was mostly unaffected but for unemployment and inflating taxes & maintenance effects. Albeit real estate is all effect; inflation is always the driver. Real estate always recovers as the land endures, but runaway inflation destroys entire economies, societies & even countries.

Btw, I’m Canadian, more historian/philosopher than economist, and seemly for my whole life Cdn bank policy merely trails US actions, albeit with some months’ lag, so I follow US information for investment purposes.

I think the central banks will pause too soon, or worse lower rates too soon, instead of taking the cure quickly…but societal pain & politics are what they are. Hence I think taming inflation again will take some years until a hard landing recession; not mere months.

I respect others opinions too; we’ll just have to see whatever will be, will be.

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On 12/3/2022 at 3:12 AM, old sanuk said:

In the 70s inflation was stoked by the oil supply crisis, quintupling barrel price through the decade; thereby severely disrupting supply chains and the economy. As inflation took off, central bank rates increased until societal pain & politics prematurely constrained rates; in both ‘77 and ‘78 rates actually went down and up more again as inflation was not contained.

Then, most mortgagees in Canada were on 30 year both amortization & term fixed rate(!) mortgages so real estate was mostly unaffected but for unemployment and inflating taxes & maintenance effects. Albeit real estate is all effect; inflation is always the driver. Real estate always recovers as the land endures, but runaway inflation destroys entire economies, societies & even countries.

Btw, I’m Canadian, more historian/philosopher than economist, and seemly for my whole life Cdn bank policy merely trails US actions, albeit with some months’ lag, so I follow US information for investment purposes.

I think the central banks will pause too soon, or worse lower rates too soon, instead of taking the cure quickly…but societal pain & politics are what they are. Hence I think taming inflation again will take some years until a hard landing recession; not mere months.

I respect others opinions too; we’ll just have to see whatever will be, will be.

Well this time around Canada led the rate hikes so I guess this time we didn't lag them

 

Tho I doubt we will go as high as them given our more rate sensitive economy

Edited by Economy
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