Economy About To Hit Brick Wall

[Nemo]

They seem to think its a possibility.  I consider the Wall Street Journal a credible source.   You give it the credibility you think it deserves.

Nemo


https://www.wsj.com/articles/consumers-get-more-pessimistic-as-inflation-looms-11643711412

Economy
Consumer Pessimism Grows as Inflation Accelerates
U.S. consumer spending is now being tested by Omicron?s persistence, waning fiscal stimulus, inflation and stock-market volatility
By Danny Dougherty and Andrew Barnett

Consumer perception of current economic conditions in December was almost even with April 2020 levels, when sentiment bottomed out following the first major restrictions to control the coronavirus pandemic.

While Americans? feelings about their personal finances slid through much of 2021, concerns about buying conditions?amid continuing worries about inflation?fell drastically for much of the year.

Household income has declined from spikes that occurred as the government distributed pandemic-related stimulus. Still, many Americans have seen wages and benefits increase, as the economy rebounded from earlier disruptions from the pandemic.

At the same time, decades-high levels of inflation have tempered enthusiasm for spending.

The University of Michigan has seen less enthusiasm for large purchases during the pandemic, with 41% of consumers citing high prices as a reason not to buy in December. Uncertainty and a lack of affordability were the leading causes for hesitance throughout much of 2020.

Click link to go there and read.  A bunch of charts and other good info you should review.

[Nemo]

CNBC seems to think its likely also.

Nemo

https://www.cnbc.com/2022/02/01/after-a-huge-year-for-growth-the-us-economy-is-about-to-slam-into-a-wall.html

After a huge year for growth, the U.S. economy is about to slam into a wall
Published Tue, Feb 1 20223:04 PM EST Updated 3 Hours Ago
Jeff Cox

Key Points

The U.S. economy last year grew at its fastest pace since 1984, but that momentum isn?t carrying into 2022.

An inventory build fueled most of the second-half growth that put annualized GDP up 5.7% for the year.

In the first quarter, the economy may not show any gain at all and possibly show a loss in GDP.

The pandemic, along with declining help from fiscal and monetary policy, will keep growth in check.

Click above and read.  Again, a headache to copy over.

[JohnyMac]

We will see unemployment numbers 0830 hrs. eastern. Then February 10, 2022, the CPI comes out. We will see.

Personally, I think we are in the throws of a correction down to the 28,000 area on the Dow.   

[Nemo]

CNN agrees.

Nemo

https://www.cnn.com/2022/02/03/economy/january-jobs-report-preview/index.html

America's economic recovery is about to go into reverse
By Anneken Tappe, CNN Business
Updated 11:29 AM ET, Thu February 3, 2022

New York (CNN Business)The Omicron variant put a massive speed bump in the road to America's recovery this winter. The first signs of trouble could show up in the January jobs report Friday.

The White House on Monday prepared Americans for disappointment about the jobs numbers: Jared Bernstein, a member of the White House Council of Economic Advisers, told CNN the number of jobs added at the start of 2022 could be "unusually low" because of Omicron.

The highly infectious variant led millions of workers to call in sick, or in some cases show up to work ill, in the past weeks.

Economists polled by Refinitiv predict 150,000 jobs were added in January. That would make it the worst report since December 2020, when the economy shed jobs. Rising Covid infections were also an issue then.


But a closer look at the forecast shows that plenty of analysts anticipate job losses: Goldman Sachs (GS) expects a drop of 250,000, while research consultancy Capital Economics and Jefferies (JEF) predict a loss of 200,000 positions.

On Wednesday, the ADP Employment Report, which tracks private payrolls, showed an unexpected drop of 301,000 jobs last month. Although the ADP and government reports aren't correlated, it is adding to the worry about what Friday's tally might look like.
Data published Thursday showed a small improvement in claims for unemployment benefits in the last full week of January. Claims were also lower than economists had predicted. Jobless claims stood at 238,000, adjusted for seasonal swings. The number of Americans filing for benefits for at least two straight weeks edged down to 1.6 million in the week ending January 22, the Labor Department reported.

Omicron's bad timing
The Omicron surge began in December. But the full fallout will probably become visible in the economic data for the start of 2022.
The December jobs report showed the US economy added 199,000 jobs, but that was based on surveys conducted before the Omicron wave gathered pace. That's why economists predict January will look worse.
"It turns out that the peak of Omicron cases coincided with when the [January] data for the payroll survey was being collected, and if you were not at work, if you were on unpaid leave, you're not counted as being on the payroll," Bernstein told CNN's Victor Blackwell in an interview Monday.
Those numbers include workers who got sick themselves, but also those who had to stay home to care for ill relatives or children home from school.
Nearly 9 million American workers said they were not working because of the virus -- either because they were sick themselves or because they cared for someone in their household -- according to the most recent US Census Bureau Household Pulse Survey, conducted between December 29 and January 10.

The good news: Omicron rates are falling rapidly, and the economy should bounce back quickly. Last winter's brief drop and the Delta surge in the summer didn't prevent a year of record-breaking jobs growth in 2021.
Even so, the impact from the variant will permeate economic reports throughout early 2022. Last week, Bank of America (BAC) warned of a significant risk that America's GDP will shrink in the first quarter because of Omicron. Goldman Sachs echoed that sentiment this week, forecasting an abrupt slowing of growth and consumer spending.

[pkveazey]

Well, I think at least a small amount of SHTF. Yes, I've noticed the odd item here and there that seems to no longer exist. However, today, I noticed that my huge supply of COKE was down to just two 12 packs. Oh, no, what am I gonna do? Well, I just climbed into the car and drove 4 miles to the Family Dollar Store to buy more COKES. What the Hell? Its only 5 PM and the place is closed. Well, screw that, I'll just go down the street about a block and buy some from the Gas Station that also serves food and sells some groceries. WTF? There isn't a single COKE in the place. OK, OK, Ok, I'll drive 10 miles north to the Dollar General Store and get what I need. Ah Ha..... I bought six 12 packs of COKE, 2 loaves of bread, the only small bag of Cat Food in the place. Oh, yea, and one Digiorno Pepperoni Pizza. I also replaced the several cans of Cambells Tomato soup and the Hormels Chilli w/beans that I ate while I was sick. I came home and told the wife that this creeping supply shortage seems to be ready to explode. I expect the SHTF soon and even though I think we can outlast any of our neighbors, it's going to be really difficult watching them scuffle around looking for what they need to survive. Dammit, Dammit, Dammit, I told them what was coming and they nodded as if they believed me but I knew Damned well that most of it was going in one ear and coming out the other. I told myself that I would not be sympathetic to those who chose to ignore my warning but yea, we know, we know, we can't just ignore them even though they are Dumbasses. I'll just have to see how it plays out. Based on what I've seen in the past 2 years, this is going to be a real Bitch of a situation.

[Felix]

First off, pk, according to the folks in DC you should have bought "only what you need" so there would be something left for others.
Second off, while the question of what might just happen globally and how that might impact on us continues in prognostication, my biggie prep issue isn't about which "Forces" might land on our shore or how our own waylaid military might behave towards American citizenry....
Nope.
We already have (or don't have) the bulk of whatever preps we can gather in a short time if we don't have them already.   
We've already (or we haven't) thought about and initiated concrete measures for a NPP (Neighborhood Protection Plan).
We've already ordered and received our heirloom seeds for a bigger garden for this year (or we haven't).

The real question is... and it has little to do with China or Russia... is _what_ will be the internal, rock-bottom guides that direct the coming choices during hardship and want, regardless of their International/Globalist parents?

A desperate parent with a hollow-eyed 4-year-old at side is going to beg for food.
A lone refugee is going to plead for one, just one meal.
And in the story that we didn't write, we won't have enough to give to the "masses" without sacrificing ourselves and obliterating the reason we prepped for our loved ones in the first place.

Hope is not a strategy.  And expecting the "masses" to starve peacefully is a pipe dream.

My biggest fear?    My choice-making could lead to despair and my pistol in my own mouth.   Or a stronger, desperate person's pistol to the side of my head.
Where is the wisdom, when we might be forced to act almost as God?  And choose wisely?

[Nemo]

So what happened?  Everyone was predicting substantial job losses.

Nemo


https://www.cnn.com/2022/02/05/politics/us-economy-january-jobs-report-what-matters/index.html

Here's what makes a jobs report 'shocking'
Analysis by Zachary B. Wolf, CNN
Updated 8:00 AM ET, Sat February 5, 2022
January jobs report crushes expectations

A version of this story appeared in CNN's What Matters newsletter. To get it in your inbox, sign up for free here.

(CNN)Like a Hail Mary touchdown, a freak snowstorm or a winning lottery ticket, January jobs data reported by the government Friday confounded experts and contradicted expectations.

It's the latest unexpected plot twist in the Covid-19 economy and proved yet again that no one really knows what's going to happen next.

When it appears things will zig, they zag.

Wonks and experts had warned job growth would be dismal and that the report would show slow growth or even losses.

Jared Bernstein, who sits on the White House Council of Economic Advisers, had said the number of jobs added in January would be "unusually low" due to the impact of the Omicron variant of the coronavirus.

Goldman Sachs and JPMorgan, which pay people lots of money to know these things, predicted job losses.

A survey of economists suggested modest gains -- perhaps 150,000 new jobs added to US payrolls.

Instead, jaws hit the floor when the Bureau of Labor Statistics released its report Friday and it showed job growth -- strong job growth!
The US economy added 467,000 positions last month.

Despite Omicron tearing through the country, restaurants and bars added more than 100,000 jobs.
Read the full breakdown from CNN's Anneken Tappe.

Revisions aplenty. There's more to the story than just what happened in January. Reports for December and November were revised to include more than 700,000 jobs over two months.

That's a delayed surprise, since initial numbers had been disappointing.

CNN's Allison Morrow compared expectations with initial and revised reports for the last two monthly reports.

December -- the initial report missed more than 300,000 jobs.

    Expectations: 400,000 jobs added.
    Initial report: 199,000 jobs added.
    Revised report: 510,000 jobs added.

November -- the initial report missed nearly 400,000 jobs.

    Expectations: 550,000 jobs added.
    Initial report: 249,000 jobs added.
    Revised report: 647,000 jobs added.

What's happening? Here's Morrow's explanation:

Forecasting has always been tricky, even before Covid. But it's become even more complicated by the pandemic, as the nation swung from historic job losses to a rapid economic recovery with soaring demand for labor. The models economists relied on are having trouble capturing the unprecedented situation we're in.

Where does the jobs data come from? The jobs report is based on two surveys -- one of businesses with payrolls and one of households about their economic situations -- that are conducted by the government midmonth and released by the Bureau of Labor Statistics in tandem on the first Friday of each month.

Where do expectations come from? Leading up to the monthly release, economists and banks publish their own expectations for what the surveys will find. If the government data doesn't hit those expectations, disappointment follows. If the data outperforms, it's a surprise.

How to read jobs reports. I've talked about previous reports with Elise Gould, a senior economist at the Economic Policy Institute, including what we do and do not learn from these reports.

She said they need to be viewed as pieces of information, not the full picture, in part because the surveys can overstate things and miss the changing composition of the workforce.

Still, it's best to know the latest information, even if we know it's likely to change, she said.

Also, the pandemic. There is also the pandemic element to confound economic expectations, just like it has confounded people's lives.
"Everyone in this economy today and the people that are making these predictions have never lived through a pandemic that hit the labor market so strong," said Gould. "And so their models are not necessarily capturing the ebbs and flows of the pandemic."
Ebbs and flows. Revisions to jobs reports aren't always good news. Over the summer, in June and July, the change was more than 800,000 positions lower than previously reported.

That's an important note. Expectations have ultimately been shown to be not too far off the mark after revisions in recent months. It's always possible future revisions could correct this surprise.

Why do these reports matter? Companies, Wall Street and the Federal Reserve will all use this data to inform their decisions, make their bets and steer the economy. Those decisions can affect everyone.

Cue the interest rate hikes. Markets, which care more about interest rates than an individual's employment, were mixed on the news.
CNN's Paul R. La Monica writes that the Fed will read the strong report as a green light to raise interest rates as part of its effort to cool inflation.

"The Fed has been handed a late Christmas gift. This is a free ride for them to raise rates," Johan Grahn, vice president and head of ETFs at AllianzIM, told La Monica.

Impact on your wallet. These reports probably seem abstract, but they do matter to policymakers, which means they will affect everybody.

Morrow has a different story, which I particularly liked, that explains how the jobs report could affect your wallet. It's a chain-reaction scenario that stems from those likely interest rate hikes.

Here are some excerpts from her report:

1. Debt will soon be harder to pay off

If there were any doubts lingering about whether the Federal Reserve feels confident about raising interest rates, the January jobs report just vanquished them.

2. Prices could stop surging

Soaring prices and shortages have been a headache for just about everyone for the past year, but when the Fed raises rates, it's effectively curbing consumer demand, which should stop prices from surging out of control. (Yay!)

3. Need a new job or a raise? Now's the time

What the January report tells us, among other things, is that the economy didn't so much as shrug at the Omicron variant. Part of the reason the report surprised economists is because many had overestimated the impact the highly contagious variant would have on the job market.

4. Your 401(k) may take a hit

The market turmoil we've seen over the past month could continue, especially if the strong economy prompts the Fed to raise rates more aggressively. Higher interest rates make it harder for companies to borrow money and undercut profits, which Wall Street hates.
One irony of job growth. President Joe Biden's approval rating has sunk in part because Americans are nervous about the economy.
But according to CNN's Chris Isidore, Biden has overseen more first-year job growth than any president in history.
Employers added a record 6.6 million jobs during Biden's first 12 months in office.

Job growth isn't everything for a president. The next closest job-creating President was Jimmy Carter, who served one term and saw 3.9 million jobs added during his first 12 months in office. (Carter's number was slightly stronger on a percentage basis).
President Donald Trump's first year also saw strong job growth -- 2 million jobs -- but he, like Carter, also lost his bid for reelection.

[JohnyMac]

I suspect with .govt handout ending, folks are having to go back to work.

Fed handouts ended this past September. Many State handouts ended Dec 31st.

[RB in GA]

I suspect lies, damn lies and statistics.  They probably edited out the long-term unemployed. It used to be if you were out of work a year, you were dropped from the stats, then it became 6 months.  I imagine something changed again- wouldn't be suprised if it was now 3 months.

[Nemo]

Yes, with the news coverage I strongly suspect there was some figuring and refiguring going on in upper level offices.

And many have not been on unemployment for a few months, with more dropping off every day.  But the national unemployment rate did go up to 4.0% with this job jump.

Nemo

https://www.cbpp.org/research/economy/how-many-weeks-of-unemployment-compensation-are-available

Policy Basics: How Many Weeks of Unemployment Compensation Are Available?

Workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although nine states provide fewer weeks, and two provide more. Extended Benefits (EB) are triggered on in two states. Additional weeks of pandemic federal benefits ended in all states on September 6, 2021.


Policy Basics: How Many Weeks of Unemployment Compensation Are Available?

Workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although nine states provide fewer weeks, and two provide more. Extended Benefits (EB) are triggered on in two states. Additional weeks of pandemic federal benefits ended in all states on September 6, 2021.

Continued

[JohnyMac]

Don't forget the U6 unemployment number. The U6 was lower during the Trump years.

[pkveazey]

You folks have certainly done a bit of homework on what is going on with the economy and unemployment. Now, let me relate something that I saw occur many times when I worked for the State. I worked for a brilliant Boss and our work was very technical in nature. By technical, I mean that we would be asked to do feasibility studies. Every time my Boss was asked to do a feasibility study, he would always ask, "How do you want the result to come out?" From that moment on, I never trusted any information that the Government published. FIRST: We would run all the data and get a proper answer. Then we would throw out any data that that was contrary to the answer we were seeking. SECOND: We would turn in the completed feasibility study. Because of that experience, I have never trusted any BS data that came from the Government or any special interest group. Do I look at the charts and graphs? Yes, I do. Do I trust any of the information on the charts and graphs? Hell no. I watch whatever is going on around me and decide if what they say is happening is actually happening. So far, not one Damn thing that I've seen is even close to the truth. I suppose it goes back to the old notion of, "Don't believe anything you hear and only half of what you see." All I can say at the moment is that knot in my stomach is getting tighter and tighter. I feel like someone who is about to go over Niagra Falls in a barrell. OK, so far, so good but there will come a time in the near future when that barrell will go over the falls and there is not a damn thing I can do about it. Just as the barrell goes over the falls, the last thing I will hear is, "Don't be concerned. There is nothing to worry about".

[JohnyMac]

Off subject story.

One of my stores was in Buffalo, NY. on the Niagara River. I received a phone call one day from my District Manager up there who was all a twitter because a lady had been buying West Systems epoxy, throw away paint brushes, stir sticks, fiberglass, etc. Well these kind of purchases were common in a Chandlery since folks are always fixing up boats. Anyway,

The DM was worried about this ladies purchases because she was bragging that she was using the supplies to reinforce some kind of contraption she was planning on using to go over the Niagara Falls. He felt that we were "aiding & abetting" this lady and her family could come back and sue us.

I laughed and told the DM to give the Lady a West Marine bumper sticker to put on her Niagara Falls Pod and since his sales were down to focus on selling more crap to crazy people.

To this day I do not know if she did go over the falls however, the falls see at least once person every year attempting to go over them in a barrel and other crazy pods.

Sorry for derailing this discussion about the coming doom of the US economy. 

[Nemo]

Dayum, and no info on the ladies attempt.  I was waiting for the exciting part.

Nemo

[Nemo]

JPMorgan Chase CEO Jamie Dimon has some thoughts on the anticipated upcoming economic situation.

His first thought--  Brace Yourself.

Nemo


https://www.foxbusiness.com/economy/jamie-dimon-warns-economic-hurricane-fed-races-cool-inflation

Economy
Published 17 hours ago
Jamie Dimon warns of an economic 'hurricane' coming: 'Brace yourself'
JPMorgan CEO: 'Brace yourself' for coming economic trouble

By Megan Henney FOXBusiness
US 'paying the price' for overstimulating economy: Former Dallas Fed advisor

Former Federal Reserve Bank of Dallas Advisor Michelle DiMartino Booth argues against the notion of raising taxes when 'headed into a recession.'

JPMorgan Chase CEO Jamie Dimon warned of a looming economic "hurricane" caused by an increasingly hawkish Federal Reserve, rising inflationary pressures and the Russian invasion of Ukraine.

Dimon ? who said at the beginning of May there were storm clouds forming on the economic horizon ? ratcheted up his warning on Wednesday, citing fresh challenges facing the Fed as it seeks to tame the hottest inflation in a generation.

"I said there were storm clouds. But I'm going to change it. It?s a hurricane," he said during a conference hosted by AllianceBernstein Holdings. "Right now it?s kind of sunny, things are doing fine, everyone thinks the Fed can handle it. That hurricane is right out there down the road coming our way. We don?t know if it?s a minor one or Superstorm Sandy. You better brace yourself."
JPMorgan CEO Jamie Dimon

CEO Jamie Dimon looks on during the inauguration the new French headquarters of JP Morgan bank, June 29, 2021, in Paris. (Michel Euler, Pool, File / AP Newsroom)

There are two main issues that Dimon said are worrying him: The Federal Reserve moving to unwind its $8.9 trillion balance sheet, deploying a less-known tool known as quantitative tightening that will further tighten credit for U.S. households as officials try to tame red-hot inflation.

The rundown of the Fed's portfolio is poised to begin on Wednesday at an initial combined monthly pace of $47.5 billion. The Fed will increase the runoff rate to $95 billion by September, putting the central bank on track to reduce its balance sheet by about $3 trillion over the next three years.

"We?ve never had QT like this, so you?re looking at something you could be writing history books on for 50 years," Dimon said.

The second matter weighing on Dimon is the Russian-Ukraine war and its effect on the price of commodities like food and oil. The bank CEO said that oil could hit $150 or $175 a barrel as a result of the conflict, which began in late February. Brent crude, the benchmark, is currently selling for $116 a barrel.

"Wars go bad. They go south. They have unintended consequences," he said.

Dimon's comment comes amid growing fears on Wall Street that the Fed may drag the economy into a recession as it seeks to tame inflation, which climbed by 8.3% in April, near a 40-year high. Bank of America, as well as Fannie Mae and Deutsche Bank, are among the Wall Street firms forecasting a downturn in the next two years, along with former Fed Chairman Ben Bernanke.
Federal Reserve

A man walks past the U.S. Federal Reserve building in Washington, D.C., on April 29, 2020. (Xinhua/Liu Jie via / Getty Images)

Policymakers raised the benchmark interest rate by 50 basis points earlier this month for the first time in two decades and have signaled that more, similarly sized rate hikes are on the table at coming meetings as they rush to catch up with inflation.

Fed Chairman Jerome Powell has acknowledged there could be some "pain associated" with reducing inflation and curbing demand but pushed back against the notion of an impending recession, identifying the labor market and strong consumer spending as bright spots in the economy. Still, he has warned that a soft landing is not assured.

"It's going to be a challenging task, and it's been made more challenging in the last couple of months because of global events," Powell said Wednesday during a Wall Street Journal live event, referring to the Ukraine war and COVID lockdowns in China.

But he added that "there are a number of plausible paths to having a soft or soft-ish landing. Our job isn't to handicap the odds, it's to try to achieve that."

[JohnyMac]

 

Beat us all down till we throw up our hands and say, "what ever...Do what you like".