Payrolls Everywhere Else

Here nothing is even close; forget about eleven months of added growth which never happened.

Vaccines and more of Uncle Sam’s TGA-funded political “generosity” will help close the gap somewhat over the months ahead, however, it is increasingly clear these will only do so much and are limited in reach and depth. More and more, longer run economic damage is becoming apparent.

Then what?

Where the inflation story is concerned, it most likely won’t be that; can’t be that. Commodity prices can shake up the short run like they have, eventually these kinds of labor fundamentals (demand shortfall) supersede everything. Therefore:

So, like the middle 2000’s, this inverted TIPS situation suggests the same thing in reverse; whereas rising oil prices hadn’t unanchored long run inflation expectations back then, failing to convince them upward and therefore indicating a more serious inflationary condition, nowadays the rise in oil prices has yet to alter the long run expectation only this time unable to push it out of its post-2013 deflationary rut.

WTI pushes up short-term breakevens while background inflation expectations remain firmly anchored in the same disinflationary category, becoming, perhaps, even more firmly fixed by among other things (China) the continuous stream of labor market indications demonstrating more perceptible and then tangible long run damage.

No matter how many, or few, employees are thought to be involved in the aggregate, a private economy that doesn’t put in the hours isn’t really producing, so it can’t really be recovering beyond mere superficial metrics – the unemployment rate the most insincere of them all. February 2021’s payroll report looks very, very different down here at the bottom.

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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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