Recession incoming
- Thread starter Boom Boom
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They've been hintng atta reduction for a long time but it never came. Jobs report sucks too. Recession next?
It never came because of inflation. There's this narrative of "inFLaTiON iS DOwN!!1!! and then there's the truth. The fed projected rate cuts this year but inflation did not hit expected benchmarks to support it. And there are reasons for this that our boy Boom aren't honest enough to admit.
Wut? Inflation is at 3%, officially. Lower by most metrics. Vastly lower by some important metrics. It hit the benchmarks. They didn't cut anyway. There are reasons for this that Drebin will never understand and wouldn't admit if he did.
Inflation is at 3%, not 2%. And it's 3% over the highest point under Biden. Inflation isn't down. The rate in which it has gone up has slowed. And no, it did not hit bench marks. That's why the fed has cited "stubborn inflationary numbers" all year.
You probably think your house is worth 30% more today than it was three years ago too, right?
Everyone's rate of change in cost of living is different. Mine hasn't been 3% in a long time. I'd love someone to compare their expenses between today and one year ago and show me a 3% (or lower) increase.
It's really pretty simple no matter what inflation is right now. Prices are higher, and they have not been reduced. It still costs me $300 for the $150 in groceries I bought two years ago. I am really glad we bought our house back in 2020.
It's also a gamed number that doesn't include food and energy prices. Consumer prices are actually up over 20%
Yeah but it’s a year over year metric so it’s great that it’s near 2% but when you factor where it went in the previous couple years it’s not so great. Economy has been living on borrowed time and the chickens have come home to roost.
The layoffs that have started happening is troubling.
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I have some inside info here...
Recession is coming because I finally got tired of waiting for a Recession and cashed out my 5% money market and put it into the market about 2 weeks ago.
You're welcome
Recession is coming because I finally got tired of waiting for a Recession and cashed out my 5% money market and put it into the market about 2 weeks ago.
You're welcome
Groceries are kicking my ***, too. Food in general. When meal combos at fast food are near over $10 something is wrong. Shouldn't cost $40 to feed a family of 4 fast food. Grocery prices for me have more than doubled. So they can get up in front of the camera and proclaim whatever they want about the inflation rate and have all the people back behind them nodding their heads in agreement, but it doesn't change the fact that people are hurting in this country.
Official inflation over the last year. But what matters is where inflation is right now, not where it was a year ago. Yes, prices haven't come down to where they were, but that is not supposed to be a consideration when setting rates.
The Fed has cited "stubborn inflationary numbers" because they have to, to justify their decision to ignore the trends and not lower rates. By their historical metrics, it's long been time to lower rates.
My house is worth well more than years ago. In labor. The only metric that matters. I would have to work longer to pay for it if I bought it now then when I did. The dollar is just a substitute for labor after all.
CPI, the only consistent measure of inflation that I am aware of, if down. It was actually -0.1% May to June, If I remember correctly. Last number I saw was 3% YoY down from a the worst in 2022 of 9%YoY for similar period.
Overall prices actually went down over the last month. Not the rate. Actual price. -0.1%.
It would be interesting where we would be at today over the last 15 or so years if you'd had 2.5-3% per year, versus having a 12 year run (2008-2020) in which we only saw 3 once, (routinely under 2), but then large spikes for 2-3 years.
Exactly. This was inevitable. I know the Dow is not the end all be all for economy health but look at it going back 30 years and you see a correction has to kick in.
Correct. People struggle to process the fact that multiple things can be true:
1) Inflation is down (as measured by CPI, the same thing that was used to follow it when it went up)
2) The Fed typically would have cut rates based on inflation goals and CPI but they failed to do so. That's a puzzle.
3) The cost of food (and other things) is still high and putting a lot of stress on people.
4) Most of this stress is because, for the first time in my adult life, wage stagnation is truly being felt by the middle class. We are used to not caring about a living wage for the working poor because it largely hasn't had an impact on our lives.
Even still, the most prevalent question you will see asked is not what it should be "What can we do to fix it?", rather, "Who can I blame for this?" and the general population is perfectly content to yield to their party's power structure and say its those other guys...
Looking at the timing of that graph, you'd think we had some kind of global pandemic that severely impacted world economies or something...
Election year politics*****
I am surprised Kamala is blaming Trump**********
I am surprised Kamala is blaming Trump**********
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True. And the concept is dumb in the first place. We create one basket of goods and services and try to use that as the measure of inflation for a country with 127 million households and 127 million baskets of goods and services.
Pretty much. Fed members were openly stating rates would be cut in December at the beginning of this year. You'd have to be blinding yourself to not see what that meant.
The harder piece is why other members would go along with it. It makes perfect sense when you understand centrists, and how people behave when forced to choose between an irrational but certain outlier, and a reasonable person who concedes reasonable doubt. They confer weight to the certainty of the unreasonable person, and shift "compromise" in their favor. We have a Fed trying to choose between members openly stating to cut rates in December, and those trying to follow the data. The data interpretations keep being massaged to try to accommodate the righties. They keep looking for a reason to not cut, instead of following the data.
I'm curious why you'd want rates to be down in retirement? If I'm only looking at my personal finances, I want fairly high rates in retirement.
A define pension plan pay out a higher lump sum with lowers the interest rates. High rates have a reverse effect on company offer pension plan. I would have to be talking in person to explain.
I mean, granted CPI (or other measures) doesn't reflect the inflation that anybody actually experiences, but what's the alternative?
If you take out the Covid-19 anomaly, there has not been a recession in the US economy in 15 + years. That is significantly longer than any other time span between recessions. People talk about recessions as if there is someone to blame, when in reality they are part of normally functioning economy.
Exactly. Having a consistent metric is a good comparison tool, but not worth getting in to arguing about whether it's a perfect tool or not. My thermometer is a great way to find something out about my general level of infection (fever) but it's not going to solve my problem or even diagnose it. You would think that with the word "Index" involved, it wouldn't cause people such consternation...
Let’s give everyone $2000 checks! That will fix it!
They haven't had any consistent signal that it's time to cut. We had some surprise high monthly readings, which they correctly did not overreact to. It makes sense that they wouldn't have assumed the job was done with one good monthly reading. That said, this is more or less the same fed that let inflation get out of hand because they suddenly decided that "flexible average inflation targeting" with a target of 2% did not mean that they were going to aim for an average of 2%, but instead that they would aim to keep inflation at 2%, but be much more tolerant of overshooting than undershooting. It wouldn't be a surprise that the fed that abandoned their stated policy at the first opportunity would not be predictable.
We are not experiencing wage stagnation. Wages are going up pretty well in nominal terms. The problem is that we had a grossly irresponsible legislature and president drop some profligate spending into the economy and the FED not properly respond. It's just worse because it followed up what already looked like a grossly irresponsible legislature and president drop some profligate spending into the economy after a bunch of state and federal politicians and bureaucrats wrecked it. Now I guess in comparison they just look just irresponsible? Their levels or recklessness and irresponsibility are outpacing the adjectives and adverbs available to describe them.
Under the cloak of media darkness, jobs numbers get retroactively adjusted down every month. Under the surface, jobs reports have been terrible for a while. Underlying metrics show that full time employment is still below pre-pandemic levels and millions and millions of people haven't re-entered the workforce. Most of these added jobs are part time jobs.
"$2000? LOL!" - anyone with an LLC in 2020/21
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