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July 28, 2022

Is Jerome Powell as wrong on the job market as he was on inflation?

Liz Peek Articles

Now we know. The economy did in fact contract for two quarters in a row, falling a modest 0.9 percent in the second three months of the year after a 1.6 percent drop in the first quarter.

That does not mean, claims the White House, in a ludicrous effort to spin the bad news, that we are in a recession. No siree; it just means that, well, we’ve had two down quarters (which historically has always meant a recession).

That the White House would adopt this bury-your-head-in-the-sand approach is understandable. President Biden assumed the Oval Office amid a vibrant, broad recovery; damaging policies like his war on fossil fuels and excess federal spending have now spurred inflation and torched our growth.

But it was Federal Reserve Chairman Jerome Powell’s comments the day before the GDP release that attracted our attention and rang alarm bells. Powell, answering reporters’ questions on the heels of a 75 basis-point rate hike, also demurred when asked if the U.S. was in a recession.

No, he said, “I do not think the U.S. is currently in a recession. And the reason is, there are just too many areas of the economy, performing too well. I would point to the labor market in particular.”

Which makes one wonder whether Powell reads the news.

Yes, the labor market has been strong, but there is every indication that we are at an inflection point, and the next direction is down.

Over the past three months, there has been a slow but steady increase in the number of companies that have slowed or stopped hiring. There have also been quite a few that have announced letting workers go. Remember: Layoffs were virtually non-existent just six months ago. Employers were struggling to find workers; few dared decrease their ranks.

That has changed, albeit slowly. There is no question that it is still hard to find qualified employees. Over the past year, as millions have retired and millions more have declined to go back to work, partly because they were supported by overly-generous federal and state benefits, managers everywhere scrambled to add staff.

Today, the panic is gone. Recent soundings from groups like the National Federation of Independent Businesses show that inflation, and not the hiring squeeze, is the main issue for small firms. In a recent survey, nearly one third of small employers said that to offset rising prices they were reducing employee-related costs like pay, hours worked or…the number of employees.

Softening demand in various sectors has led to businesses pausing their hiring and to layoffs. Ecommerce companies like car dealers Carvana and Vroom, which saw demand soar during the pandemic and since throttle lower, have laid off people.

Compass, an online real estate powerhouse, has cut its employee count about 10 percent, adjusting to a higher mortgage rate environment. GoPuff, a grocery delivery app, is also reducing its headcount. Other companies that benefited from a locked-down environment, like Pelaton and Netflix, have also laid off people.

Big Tech is also responding to a possible downtick in demand, with Twitter, Apple and Alphabet all announcing a slowing of hiring. Meta, reacting just recently to a revenue drop, said it would reduce its headcount; Amazon declared it was overstaffed at some warehouses and Shopify laid off 10 percent of its workforce.

It isn’t just tech firms that are letting workers go. Ford Motor Company has announced that it plans to lay off as many as 8,000 salaried employees, General Motors, which had prepared to accommodate 1 million job applications as it geared up to produce electric vehicles, has now instituted a hiring freeze.

In biotech, the news is similar. Invitae has announced it will let go 1,000 employees and CytomX Therapeutics, a San Francisco-based company working on cancer cures, is shrinking its staff by 40 percent.

On Wall Street, what was just months ago a hiring frenzy has definitely cooled. Goldman Sachs, where revenues dropped 23 percent in the last quarter, said it will slow hiring and reinstate annual performance reviews. Black Rock has said it would reduce recruitment, and Morgan Stanley said layoffs are on the table if business conditions worsen.

So where does Powell see that super-tight job market? In the rear-view mirror. Job gains have been robust, to be sure, but now they are declining. In June, the U.S. added a healthy 372,000 jobs. But that was down from 384,000 in May, 714,000 in February and 504,000 in January.

Meanwhile, the four-week moving average of unemployment claims has been trending higher. Last week, claims surprised economists by jumping to the highest level since last November. Continuing claims are also rising.

The Federal Reserve System, with its $5 billion budget and tens of thousands of employees, is meant to be ahead of the news, not behind it. This Fed has been spectacularly late to the party on anticipating and diagnosing inflationary pressures, and even more sluggish in responding to soaring prices. There were many red flags that the Fed missed, including that consumers were flush with government largesse and buoyed by rising stock and home prices.

For sure, the pandemic threw all economic calculations and expectations off course. And it is true that having GDP growth turn negative when hiring is still positive is unusual. Top economist Ed Hyman, who has not been predicting a recession, acknowledged the strange mix of data, concluding, “We have never seen anything like this.”

But now the Fed needs to tune into what is happening in the real world — and in particular how its efforts to crush inflation may be weakening not only demand but also labor markets.

It is good news that Powell indicated flexibility going forward, and, as usual, indicated that the Fed would be driven by data.

Otherwise, it could drive this country’s economy straight into a ditch. The recent record is not encouraging.

Is Jerome Powell as wrong on the job market as he was on inflation?

Published on The Hill

Fox Business: . @lizpeek joined . @LizMacDonaldFOX on last night’s show to discuss current gas prices GOP Needs a Power Hitter — Will Trump Play Ball?

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Liz Peek

2 years ago

Liz Peek

Are you better off than you were 2 years ago?
www.foxnews.com/opinion/inflation-hurting-americans-biden-bill-worse-liz-peek
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Inflation already hurting Americans, and Biden's Build Back Better will make things even worse

Are you better off than you were two years ago? That’s what Republicans will ask voters a year from now.

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Don't you know that the global supply chain story is done on purpose for there to be empty shelves at the grocery stores and what not to screw with the public. This is done by the world economic Forum with the likes of Klaus Schwab Bill Gates and George Soros and their ilk

YOU are the delusional personality, dear. Sticking it against the US to please 🖕trump and putin. Disgusting anti American.

Maybe Liz you would support some immigration reform , you bitch about not having enough servers in your entitled selfish world , oh and you are against mask wearing too , how trumpian of you, the pandemic is all a hoax to you , just dont get sick out there might not be any hospital beds for you . The drs and nurses are sick and tired of taking care of anti mask anti vax selfish repubs Go claim your Darwin Award .

Nope

No Trump, No Trump Doctrine

There's a growing rumble, by the minute, from people all over the planet who are suddenly missing Trump's policies, not necessarily Trump.

First, Trump's policies, domestic and foreign, were clear and common-sense driven which is anathema to the Swamp control freaks who thrive on complication and confusion to mask their real agendas and who they're really working for.

Second, the hypocrites who are now lamenting Trump's policies are the same, domestic and foreign, who fought Trump every inch of the way to prevent the implementation of policies that clearly worked.

Third, without Trump the fighter, no Trump policies would have ever seen the light of day.

And without what is now collectively the Trump Doctrine, what clear metric would we have to truly understand the depth and devastation of the Biden/Swamp debacle?

Yes I am

America was NEVER in better shape than when President Trump was in office .. we need him NOW

When the Fed says it finds 2% inflation desirable, it is admitting that it seeks to embezzle HALF of Americans' purchasing power every 35 years, just enough embezzling to not attract too much attention! Phase out the Fed and its DEBT-BASED FIAT system, and restore the CONSTITUTIONAL monetary system based on "gold and silver Coin."

You are a dishonest traitor like Trump. You know Pence and Biden cooperated with the DOJ while Trump lied and hid and shared top secret documents that put American military lives in danger. You should be ashamed of yourself. God sees you and what you are doing.

Moron

Stupid doesn't describe Liz Peek well enough. No one knows who you are so whenever you troll your way onto some useless FOX program, you utter absurd TDS infected nonsense. Stay smart Mensa. I will never have you on my radio talk show.

how soon some forget. after herschel loses- PRES TRUMP got these jobs done- cheap gas. no soldier deaths the last 18 months of afghan when he was in office. He cut taxes. the largest in America's history. cut regulations. got us out of the Iran deal. put the american embassy in jerusalem. took it to the terrorists. such as soleimani, and al-baghdadi. built the wall on our southern border on 350 miles of our southern border. REAL MEDIAN household income grew to $68,703 in 2019, an impressive 6.8% increase over 2018. While the overall growth rate was 6.8%, real median income grew by an even greater 7.9% for Black Americans, 7.1% for Hispanic Americans, and 10.6% for Asian Americans. All record highs as were the new income levels for each of these groups. Joe's handlers are heading us to the "misery index" purposely. Did I say cheap gas? Please list for me what Joe's handlers have done for you? be the first to answer my question. LOL

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Liz Peek

2 years ago

Liz Peek

Progressives got hammered on Election Day- but that was only the latest big defeat. What does this mean for Dems? Can Joe pivot? (spoiler-probably not)
www.foxnews.com/opinion/progressive-drubbing-biden-pivot-changing-guard-liz-peek
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Liz Peek: Progressives' drubbing opens door to (unlikely) Biden pivot, changing of the guard

They may not know it yet, but the ultra-liberal cabal that has choked Democrat politics and humiliated spineless party leaders like House Speaker Nancy Pelosi, D-Calif., has lost its mojo.

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President Trump lost the election you are such a dummy he got over 95 million the other yo-yo got about 45 million the rest was fake you're a disgrace. Www.magapill.com

Liz Peek

2 years ago

Liz Peek

Joe Biden wanted to be an historic president- and he has done that. Worst ratings slide of any president since WWII.
He (or whoever is running WH) doesn’t care about voters’ top issues – instead Team Biden obsessing about climate change, gender and race.
No wonder he’s in trouble!
www.foxnews.com/opinion/biden-polls-ignoring-voter-concerns-liz-peek
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Liz Peek: Biden vs. Americans – his priorities, like climate change, ignore top worries of most voters

Voters are worried about inflation, jobs, crime, education and our open border, while the Biden White House is laser-focused on climate change, transgender rights, racism and reducing inequality.

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The great days turned to very bad days in less than a year.
Congress needs a flip to GOP next year to stop the craziness

Climate change is important.
The GOP may not care about it now, but their children will.
He is trying to get an infrastructure bill through.
He has had issues with Afghanistan, but what else could he do
The people who are taking over Afghanistan were released by the previous administration.
I am sure that Biden is not perfect but he is better than Trump.

www.facebook.com/1218170708/posts/10226625535324074/

Liz.

Duuuuuh President Trump lost the election you are such a dummy he got over 95 million the other yo-yo got about 45 million the rest was fake you're a disgrace. Www.magapill.com

worst ratings only from a side thats ignorant to the truth. the effects of coming off a pandemic with oil companies profitting off the pumps in order to pay their shareholders back from profits lost. inflation effects the entire world but of course your base doesnt pull their heads out their asses for one second to look around and use common sense. keep spreading bullshit and weakening our country til it no longer functions as a democracy….bc i see through your fake Christian patriotic pow wows. you are the opposite of ehat you claim and you are the definition of what you claim your rivals are. deflection, projection, hypocrisy. 3 words that sum you up

Your bias is ridiculous. Makes you a bad writer. Btw avg teacher pay is way above 31000. Sensationalize much?

#LetsGoBrandon

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