The U.S. Economy Just Took A Turn In A Very Ugly Direction
Francesco Abbruzzino, The Uncensored Report, LLC
That sure didn’t last long. Over the past two years, the U.S. government borrowed and spent trillions of dollars that we did not have, and the Federal Reserve unwisely pumped trillions of fresh dollars into our financial system. Of course all of that money was going to be a short-term help for the economy, but it was also going to make our long-term problems even worse. So what did we get in turn for mortgaging our future? Well, it turns out that we got a few months of economic stability, tremendous inflation, and the worst supply chain crisis in the history of the United States.
And now the economy is slowing down again.
Of course inflation isn’t going anywhere, and so some pundits are suggesting that we are heading for a period of “stagflation” like we experienced under Jimmy Carter in the 1970s.
If only that were true.
Sadly, what we are eventually heading into will be far, far worse than anything that we went through in the 1970s.
But things weren’t supposed to turn in that direction so soon.
The “sugar high” from all the money that was poured into the economy by our leaders was not supposed to wear off so quickly. But it apparently has, because Wednesday’s ADP report showed that 301,000 private sector jobs were lost during the month of January…
Omicron threw a wrench into America’s economy at the start of 2022: The US private sector lost hundreds of thousands of jobs in January, according to Wednesday’s ADP Employment Report.
The loss of 301,000 private-sector positions came as a surprise to economists who had predicted businesses had added 207,000 jobs. It was also the first decline in the ADP report since December 2020.
Ouch.
And PNC is projecting that Friday’s job report could show a total loss of 400,000 jobs last month…
PNC is possibly the most pessimistic voice on the Street, with a projection that nonfarm payrolls contracted by 400,000 in January, including a 350,000 decline in the private sector.
The losses, Faucher said, “were likely due to a combination of factors,” most of them related to Covid. They include workers either dealing with their own virus infections, or having to take care of sick family members, parents who managed kids who were not being able to go to school, and weaker demand in pandemic-sensitive industries like bars, restaurants and hotels.
Under normal circumstances, this should not be happening.
But it is.
Right now, we are dealing with the most epic labor shortage in our entire history.
There are “help wanted” signs all over the place, and companies all over America are literally hiring anyone with a pulse.
In fact, we just learned that there were almost 11 million vacant jobs in December…
Reflecting a tightening labor market, vacancies rose to 10.92 million, well above the FactSet estimate for 10.28 million and an increase of 1.4% from November. The rate of job openings as a share of the labor force was unchanged at 6.8%.
So we have nearly 11 million vacant jobs, and the number of Americans that are employed is declining?
That is nuts.