This is what the prelude to stagflation looks like - no job growth, yet prices rising.
If the administration pressures the Federal Reserve into lowering interest rates, say, right before November 2026, then we lock in a stagflationary cycle. An initial stock rally then long-term bond yields rising on inflation fears. A weakening U.S. dollar, and a Federal Reserve that has no tools to fight inflation in the medium-term.
Basically, with all the job cuts in the last few years, there hasn't been as much unemployment. We are currently heading to the point where even small job cuts have a much larger impact on unemployment.
We saw similar during the great depression, in that people couldn't find full time work, so they did gig jobs, quickly undercutting other laborers until wages cratered and it was a full blown depression. I suspect that gig work, even 1 hour/week is enough to get you out of the unemployed group, but it isn't sufficient and is masking the true labor market and unemployment. And then there is the Federal government firing the statisticians because the numbers coming out don't look good and now we can't trust the numbers. At this point any number you must assume to be majorly inflated from reality. Those made up numbers aren't even good.
Maybe there's also the secondary cluster below that where even lower job opening numbers have the same unemployment rates. I think this graph is less predictive than just showing the relationship without other important data to explain why things like that second cluster below the main line exists.
The oversimplified explanation is that there's a money cycle that lasts ~80-120 years. We're going through the rough part of the cycle right now; and trying to fight it just prolongs it.
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[ 5.3 ms ] story [ 19.3 ms ] threadIf the administration pressures the Federal Reserve into lowering interest rates, say, right before November 2026, then we lock in a stagflationary cycle. An initial stock rally then long-term bond yields rising on inflation fears. A weakening U.S. dollar, and a Federal Reserve that has no tools to fight inflation in the medium-term.
We saw similar during the great depression, in that people couldn't find full time work, so they did gig jobs, quickly undercutting other laborers until wages cratered and it was a full blown depression. I suspect that gig work, even 1 hour/week is enough to get you out of the unemployed group, but it isn't sufficient and is masking the true labor market and unemployment. And then there is the Federal government firing the statisticians because the numbers coming out don't look good and now we can't trust the numbers. At this point any number you must assume to be majorly inflated from reality. Those made up numbers aren't even good.
https://economicprinciples.org/
https://www.amazon.com/How-Countries-Go-Broke-Principles-ebo...
The oversimplified explanation is that there's a money cycle that lasts ~80-120 years. We're going through the rough part of the cycle right now; and trying to fight it just prolongs it.