Having done what Democrats do, which is spend taxpayer cash, it looks like the piper is coming for payment.
Via Instapundit, Fortune magazine's Jason Ma reports that a key indicator for recession appears to be activating.
The unemployment rate is different from the U.S. Employment Report's main number, which indicates the numbers of jobs created.
Unemployment has moved up to 4.1% at the last reading and is sufficiently high that it comes close to matching the numbers that normally are seen as a recession starts.
They didn't try to fudge that one, because most of the time, they are looking for a public relations boost from the more talked-about Employment Report, which is often revised downward after getting a market boost.
Instapundit's Stephen Green, who knows markets, observed how the sleight of hand worked this time the jobs report here:
They swapped out full-time jobs for part-time jobs (to avoid paying benefits?) and got a few extra part-time jobs owing to the reduced hours, and then called it job gains.
That's not what normal people think of as job gains.
As for the unemployment rate, they must have thought nobody paid attention to it, but it's worse.
Now we have unemployment ticking up to 4.1%, yet Bidenflation looks no different at the grocery or gas station.
Joe Biden is bringing back the '70s.
The economist that Ma cited was cautious about her indicator, understanding that fewer employed people means smaller markets and less economic activity, but did not seem to make the connection between federal overspending and the phenomenon of disappearing jobs.
However, economics professor Steve Hanke at Johns Hopkins University has outlined that problem, from a piece on the matter published in December in National Review:
Then, the Fed flipped the switch on its printing presses. Since March 2022, the money supply has been falling like a stone. With that, we altered our inflation forecast. By the end of this year, we forecasted that the headline CPI would fall to between 2 percent and 5 percent. Yesterday’s inflation report showed the CPI had fallen to an annual rate of 3.1 percent. With only one month to go until the end of the year, it looks like the quantity theory of money will deliver another inflation bullseye.
But that’s not all. The contracting money supply means that the economy is running on fumes. And with the normal long lag between substantial contractions in the money supply and changes in economic activity, the U.S. economy is on schedule to tank in 2024. Given the current course of M2’s contraction, we now forecast that inflation will fall below the Fed’s 2 percent target in 2024, and decline further into outright deflation in 2025.
Just how substantial has the Fed’s money-supply reversal been? As the accompanying table shows, there have only been four such contractionary episodes since the Fed was established in 1913. Interestingly, there has not been a contractionary episode greater than the current one since the Great Depression. By rejecting the quantity theory of money and the money supply, Powell and the Fed have given us whiplash: first an unprecedented explosion in M2 and now a contraction that, to date, is already the third largest in the Fed’s history.
And what did the four prior episodes of monetary contraction produce? With a lag, they all produced a recession. It’s time to buckle your seatbelts.
First the Fed prints, then it slams on the brakes and stops printing. The official inflation rate goes down to zero or something like it, but the earlier inflation is left in place for consumers to continue to 'enjoy.'
Inflation eats into their paychecks and then they don't have money to spend in the economy, which leads to less economy, and fewer jobs, making the unemployment rate go up, meaning, some workers won't even have a paycheck to watch shrivel.
Sound like a great economy? Sound like something that can be fixed by a senile president who doesn't know where he's at or what day it is? Just as LBJ's Great Society spendathon and Vietnam war spending triggered the 1970s, Biden's stimulus packages and Democrats' overspending on COVID are triggering the current recession.
Pity this country if that guy manages to rig himself into another presidential victory this November.
Image: Photo illustration by Monica Showalter with use of Pixabay / Pixabay License images