— CNBC's Closing Bell (@CNBCClosingBell) October 11, 2022
“I don’t think there will be a recession. If it is, it’ll be a very slight recession. That is, we’ll move down slightly.”
— Jordan Fabian (@Jordanfabian) October 12, 2022
First the Fed was late to inflation. Now, concerns are growing that the central bank is overcorrecting.
Greg Mankiw: “Steering the economy is like steering a large ship. It moves very slowly, and once you return the helm to normal, it keeps going."https://t.co/wHoAweyLr1
— Rachel Leah Siegel (@rachsieg) October 11, 2022
Good for workers, bad for business oligarchs and other tax cheats:
— Reuters (@Reuters) October 12, 2022
Here's the thing: the Fed can play with rates all they want but we lost a lot of workers during the Trump Administration, both from COVID & from stricter immigration enforcement. The demand for labor they left behind isn't going to just go away because rates went up.
— chatham harrison is tending his garden (@chathamharrison) October 7, 2022
The U.S. economy has added, on average, half a million jobs per month since Joe Biden took office—a pace of job growth that is unprecedented for the first half-term of a Presidency.https://t.co/G858R1kLaQ
— The New Yorker (@NewYorker) October 8, 2022
With the September jobs report in hand, there’s only one more employment update left before the midterms. The October report will be released on Friday, November 4th—just four days before the polls open. Yes, there is a possibility of a last-minute surprise, but, based on what we know today, the Democrats and Joe Biden can go to the voters and make a very strong case: since his January, 2021, Inauguration, the American economy has created ten million jobs…
Even though there are still deeply rooted racial and educational fissures in the labor market, the jobs gains over the past twenty months have been widely spread. When Donald Trump left office, the unemployment rate among Hispanics was 8.6 per cent: last month, it hit an all-time low of 3.8 per cent. During the same period, the Black jobless rate has fallen from 9.2 per cent to 5.8 per cent. (The white unemployment rate is now 3.1 per cent.)…
This success surely has something to do with the fact that, shortly after Biden took office, Democrats passed the American Rescue Plan Act, a 1.9-trillion-dollar stimulus package. The Rescue Act is controversial, of course. Republicans (and even some Democratic economists) have tied it to the upsurge in inflation during the past year and a half. In a sense, though, the critics of the Rescue Act are acknowledging that it succeeded in supporting the economy and boosting job growth: their argument is that the aid was too much of a good thing and led to economic “overheating” in the form of rapidly rising prices.
It should be noted that the September jobs report provided no evidence that the economy is suffering from a nineteen-seventies-style wage-price spiral, which is the inflation hawks’ nightmare scenario. In September, average hourly earnings rose by ten cents. That’s about 0.3 per cent, or 3.8 per cent on an annualized basis. And this wasn’t a one-month aberration. Since the end of last year, the rate of wage growth has fallen slightly. The corporate profit rate, on the other hand, has recently reached its highest level in seventy years, as businesses of all kinds pass along higher prices to consumers, and then add in a little extra for themselves.
For some reason, you don’t read about record corporate profits much, or hear about it very often from Federal Reserve officials, who remain determined to keep raising interest rates until something goes pop. Jerome Powell and his colleagues are hoping that this something will be the inflation rate, but it could just as easily be the entire U.S. economy, including the jobs market. That’s why the stock market fell sharply on Friday—the Dow closed down more than six hundred points. After digesting the jobs report, investors don’t think the economy is slowing down rapidly enough to dissuade the Fed: they are almost certainly right.
In this environment, the final weeks of the midterms campaign are likely to see further volatility on Wall Street. Next week, the Commerce Department is scheduled to release the Consumer Price Index for September, which will bring inflation back into the spotlight. According to a Monmouth University poll released earlier this week, more than four out of five Americans still rank inflation as an extremely important or very important issue, so Republicans will continue to hammer Democrats on it through November. But the President and his Party now have a new economic slogan for the campaign’s final month: ten million new jobs. “The fastest job growth in history,” Biden boasted on Twitter.