It is being widely reported that the federal Reserve Open Markets Committee has increased interest rates by three-quarters of a percentage point. Nick Timiraos reports at the Wall Street Journal:
WASHINGTON—The Federal Reserve continued a sprint to reverse its easy-money policies by approving another unusually large interest rate increase and signaling more rises were likely coming to combat inflation that is running at a 40-year high.
Officials agreed Wednesday to a 0.75-percentage-point rate rise, which will lift their benchmark federal-funds rate to a range between 2.25% and 2.5%. The rate increase won unanimous backing from the 12-member rate-setting committee.
In a policy statement after the conclusion of their two-day meeting, officials acknowledged signs of slower economic activity since they met last month. “Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months,†the statement said.
The statement repeated language from previous meetings that said officials anticipate additional rate increases will be appropriate. Fed Chairman Jerome Powell is set to speak at a news conference at 2:30 p.m. Eastern time.
I will update this post with anything pertinent from Chairman Powell’s remarks when they become available.
The Fed Funds rate is presently at the highest rate in 20 years and has been increased at the fastest pace in 40 years.
If I am reading this correctly, on the move so maybe not, we are back at pre-covid levels in terms of number of people employed.
Steve
https://www.bls.gov/news.release/cewbd.nr0.htm
Bill McBride of Calculatedrisk has been tracking that.
As of the most recent jobs report (June 2022); the job market is close but has not recovered all the jobs lost during the pandemic.
https://www.calculatedriskblog.com/2022/07/june-employment-report-372-thousand.html
PS: I believe the post has some type of formatting issue where everything is underlined.
Now to see how many subprime car loans, credit cards, etc go into default as their rates rise. But hey, rumblings in the press more student loans will be written down, which sounds who matters.
Fixed. Thanks.
Labor Force Participation isn’t great:
https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm
It is difficult to read the tea leaves. However, housing in the time financed world has taken a huge hit due to mortgage rates. The market turned on a dime about 30 days ago.
The job market is also difficult to decipher. The household survey (which does not measure people working multiple jobs) yields a picture of stagnating job growth. The unemployment rate holds only due to the fact that the labor force is down, as Andy’s data shows.
Consumables always hold steady, but reports on durables also show weakening. One thing is crystal clear. Contra the administration’s shill, or idiot, Janet Yellen, the consumer is on borrowed time, running up their debt to finance spending.
I think things will become quite a bit clearer in the next 45 days, after the vacation season clears and people take stock of their situations. Its only a hunch, but I suspect a rocky road.
Well, the good news is out. The economy contracted again in the last quarter……………….so no recession! The science is not settled, its been changed.
In other news, the arson and looting you see is clear evidence of mostly peaceful protesting.