Old Numbers Show Us Why There’ll Be New Checks

If the payroll numbers are old news because they aren’t supposed to matter anymore, what with TGA drawdowns and vaccines, then JOLTS figures one month further behind them must count for even less. Gradation does factor here, though, and that’s why it’s important to keep the current and slightly-in-arrears data in mind.

What I mean is that the stimulus-frenzy narrative does begin by recognizing how “things are bad.” In fact, that’s the whole point behind the desire for Uncle Sam writing out and distributing even more even larger checks. Yes, today is awful but…

Just how awful makes a difference; can make all the difference. There’s bad, really bad, and then there’s the end of 2020. It wasn’t quite as atrocious as March and April last year, a rebound in between which has clearly influenced perception given the direction seems to be upward (it is, after all, a rebound). From most mainstream perspectives, things are getting better if maybe not quite fast enough.

If that was the case, then, yes, Larry Summers and his overheating summation might apply. An economy near its potential requiring, in most Economists’ minds, a little surgical nudge instead handed the blunt instrument of $2 trillion (which is actually about $900 billion when you account for the accounting fictions politicians float) in gross fiscal negligence, they make the plausible case for it getting inflationary out of hand.

But that’s based on only where the economy was supposed to have finished last year, not where it actually did. It’s thought the non-economic shutdown lifted, reopening flooded the labor market with demand and supply equally, leaving just some fine-tuning along the way to minimize any unfortunate spillovers.

The reality, on the contrary, proved the reopening flood lasted barely two months before it was surrendered to what more and more looks like economic factors that have overwhelmed the easy, no-fuss non-economic rebound (the original “V” died a long time ago). The difference, then, isn’t an economy stumbling on its way back to potential, rather a system being held nowhere near it demanding more focused attention.

What’s most important, workers/consumers know this (see: labor force shrinking).

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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