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Money, Banking and the Economy
Dg west deptford Offline
#401 Posted:
Joined: 05-25-2019
Posts: 2,644
CF industries for the win is my current favorite

Wrong thread?
rfenst Offline
#402 Posted:
Joined: 06-23-2007
Posts: 36,625
Wonking Out: Are We in Another Housing Bubble?

By Paul Krugman Opinion Columnist
NYT


Do you remember the housing bubble? OK, if you’re 35 or younger, probably not — you were a teenager at the most when the bubble burst. But it was a huge deal at the time, and a very strange one.

When the bubble was inflating in the early 2000s, it seemed to me and others — Dean Baker may have been the first prominent economist to sound the alarm — to be the most obvious case of mispricing we’d ever seen. At least the dot-com bubble of the late 1990s had the excuse that businesses were developing exciting new technology, so at least some of the new companies might end up becoming extremely valuable. But people have been building houses for thousands of years; what could justify those extraordinary prices?

At the time, however, anyone raising questions about housing was treated like … people who now raise questions about cryptocurrencies. (After yesterday’s column went online, a Wall Streeter friend texted “God help your inbox.”) I got a lot of “You only say there’s a bubble because you hate President Bush” emails.

Anyway, the bubble eventually burst, taking a large part of the financial system down with it. That is a worrying precedent, because housing prices have once again been rising rapidly. In fact, the average real price of housing in major markets is now higher than it was at its 2006 peak:

So is history about to repeat itself? Well, there are important differences between this house-price surge and the previous one, differences that arguably make this one less worrying.

One important feature of the 2000s spike in housing prices was that it affected only some metropolitan areas. When I wrote about the bubble in 2005, I argued that America was effectively divided between Flatland — places where it was easy to increase the housing supply — and the Zoned Zone, where “a combination of high population density and land-use restrictions” made it hard to build new houses. And the big price increases took place only in the latter. For example, here’s a comparison over time between Miami and Dallas:

That distinction was key to my conclusion that we were in the midst of a bubble. By the mid-2000s, real home prices at a national level were up by “only” about 50 percent, a number you could, with painful intellectual contortions, try to justify on the basis of low interest rates. But there was no way to justify the 100 percent or more increases we were seeing in places like Miami and San Diego.

This time, however, is different. Look again at the Miami-Dallas comparison. As you can see, the new surge in home prices is much more of a national phenomenon, with prices rising as much or more in Flatland than in the Zoned Zones along the coasts. Adjusted for inflation, prices in places that were the epicenter of the 2000s bubble are still below their previous peak (and their price rise is easier to justify, because interest rates are even lower now); the reason the national average is so high is that prices are surging everywhere — even in small towns that used to be bargains.

How is this possible? In the 2000s home prices stayed low in many places, despite surging demand, because there was plenty of supply: Buildable land was abundant both in small cities and in cities that, like Houston, don’t have much in the way of zoning.

This time, however, record home prices haven’t led to a boom in housing construction:

But why? With houses selling for so much, you’d think there would be a big incentive for developers to throw up new units, which they can do quite quickly. I still remember driving around New Jersey during the McMansion boom and being amazed at how quickly houses went up. Why aren’t the developers rushing in now?

In correspondence, my old M.I.T. classmate and economist Charles Steindel pointed me to the likely answer: It’s the supply chain, stupid. Look at what is happening to the price of building materials:

So prices are shooting up, even in places with plenty of buildable land, because supply can’t rise to meet the demand.

Put all this together, and the case for a bubble isn’t nearly as compelling as it was in 2005 or 2006. That doesn’t mean that all is well. Real estate people I know tell me that there’s still a feeling of unhealthy frenzy, and people who paid high prices for small-town houses may regret it once supply chains get unsnarled and more houses get built.

But this time is different, even if some house prices are starting to look like the 2000s bubble. I wouldn’t say that everything is fine, but a housing bubble probably isn’t in my top 10 list of things to worry about.



Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography.
Speyside2 Online
#403 Posted:
Joined: 11-11-2021
Posts: 1,863
Good article
RayR Offline
#404 Posted:
Joined: 07-20-2020
Posts: 5,436
Well...if the world’s most famous Keynesian, Paul Krugman says he isn't worried about a housing bubble, I would be worried.
Speyside2 Online
#405 Posted:
Joined: 11-11-2021
Posts: 1,863
^ Do you think you could ever post anything here that is not hateful about anything that doesn't fit your POV?
RayR Offline
#406 Posted:
Joined: 07-20-2020
Posts: 5,436
Speyside2 wrote:
^ Do you think you could ever post anything here that is not hateful about anything that doesn't fit your POV?


It's pretty much unthinkable that I could ever post anything good about Paul Krugman.
Sunoverbeach Offline
#407 Posted:
Joined: 08-11-2017
Posts: 10,737
Why are all ants girls?
Because they're not uncles
Dg west deptford Offline
#408 Posted:
Joined: 05-25-2019
Posts: 2,644
Trans-phobic

Canceled
rfenst Offline
#409 Posted:
Joined: 06-23-2007
Posts: 36,625
Inflation is high, but there are reasons for optimism

By Paul Krugman The New York Times

American workers are quitting at record rates, suggesting that they are confident they can easily find new jobs. Wages are rising rapidly, suggesting that labor currently has a lot of bargaining power. These are the hallmarks of an economy at or near full employment. At the same time, inflation is running uncomfortably high.

All of this says that it is time for the Federal Reserve to cool things down, which it has indeed said it will do. It is planning a series of interest rate hikes over the year ahead, with the pace of those hikes dependent on the data.

But can the Fed pull this off without sending us into a recession? It will be tricky, for reasons I’ll get to. But I keep seeing people drawing parallels between recent inflation and the inflation of the 1970s, with the implication that disinflation will be as ugly as it was last time. So it is important to understand why that comparison is misleading.

The end of the ’70s inflation was indeed extremely ugly. Paul Volcker’s tight-money policies eventually brought inflation down to tolerable levels but only at the cost of a huge surge in unemployment.

Why was disinflation so hard? Because expectations of continuing inflation had gotten deeply entrenched in the economy, businesses kept raising prices even in the face of high unemployment (which is what we mean when we say “stagflation”).

It took years of pain to break the wage-price spiral. What about now? I have been spending some time with the Michigan Surveys of Consumers, which since 1946 have been asking Americans what inflation they expect over the next year and over the next five years. In 1980, the median answers to these two questions were similar; for example, in February 1980, one-year expected inflation was 10%, five-year expected inflation 9.7%.
Now, however, they are quite different.

One-year expectations have gone up a lot; five-year expectations, much less. I have used the one-year and five-year numbers to extract an implied prediction for average inflation rate over the next two to five years.

Here is how that works: Imagine that people expected 5% inflation this year, but only 2% after that. Then, they’d expect prices over the next five years to rise by 13% — (4x2) + 5 — with an average inflation rate over the whole period of 2.6% per year. (Dear math nerds: I know that is only an approximation. But it is good enough for government work.) What I have done is invert that calculation, asking what future inflation rate would be consistent with people’s one-year and five-year expectations.

What that shows is that while Americans have sharply increased their expectations for inflation over the near future, they don’t expect that inflation to persist.

Why is that a useful thing to know? Not because there is some wisdom-of-crowds thing going on. Instead, what that is telling us is that expected inflation has not (yet?) become entrenched the way it had by the end of the 1970s.
Back to that in a moment. First, let me point out that the inflation pattern consumers appear to expect — a year of rapid price increases followed by a return to modest inflation — would in fact be a good outcome.

As many economists have noted, the pandemic has skewed demand. Nervous consumers have been reluctant to buy services, which often involve face-to-face contact, and they have splurged on goods instead.
Supply chains have had problems keeping up with this surge in demand for stuff, leading to much more rapid price increases for goods than for services.

But why have we adjusted through higher goods prices rather than lower service prices? Because history tells us that it is much easier to raise prices than to cut them. If we had tried to offset rising prices in supply-constrained sectors by driving down prices elsewhere, we would have had much slower job growth — and probably wouldn’t have given the private sector as much incentive to reduce the bottlenecks it is facing.

So a temporary period of elevated inflation, followed by a return to normal, is actually the appropriate economic response to the peculiar stresses of recovery from the pandemic recession — unless higher inflation gets entrenched in expectations. So the evidence that this entrenching isn’t happening is very good news.

Why, then, do I say that pulling off a return to acceptable inflation will be tricky? Because hitting desired economic targets is hard, even when the fundamentals are on your side. We don’t really know what level of gross domestic product is consistent with full employment, nor do we know how high interest rates will have to go to hit any given level of GDP. The Fed will adjust its policies based on incoming economic data, but monetary policy acts with a substantial lag, so it can be many months before we know whether interest rates are too low, too high or just right.

But 2022 isn’t 1980. Inflation hasn’t become entrenched. So while there will surely be some bumps along the way, there is a pretty good chance that the Fed can let us down easy.
Sunoverbeach Offline
#410 Posted:
Joined: 08-11-2017
Posts: 10,737
Had a crush on my teacher, which was confusing, since I was homeschooled
rfenst Offline
#411 Posted:
Joined: 06-23-2007
Posts: 36,625
Five takeaways on the most recent run of inflation

AP-Matt Rourke

Consumer prices rose at the fastest annual rate in more than 40 years in February, according to Labor Department data released Thursday.

Inflation steamed ahead for yet another month, pushing the cost of living even higher after more than a year of accelerating price growth. While the burst of inflation began with a small group of goods hit by specific supply shortages, rapid price growth has spread to basic necessities such as food, energy and shelter.

Economists were once optimistic price growth would slow in the spring and allow Americans to more fully reap the benefits of a strong economy.

Such predictions have evolved as sanctions imposed on Russia after its invasion of Ukraine harm the international economy and stoke inflation.

Here are five takeaways from the Labor Department’s consumer price index (CPI) report for February.

Monthly inflation rises after three-month plateau
The CPI rose 7.9 percent in the 12 months ending in February, marking the highest annual inflation rate since January 1982. While the yearly inflation rate is eye-popping, the 0.8 percent monthly increase in prices could be greater cause for alarm.

Prices rose by roughly 0.6 percent each month from November through January, which appeared to be a sign that the forces pushing inflation higher could finally be easing. But the acceleration of monthly price growth in February is a troubling sign for the pace of inflation going forward.

“The February inflation report foreshadows what will be a difficult period of price increases in just about all aspects of the American households’ market basket. What makes this worse is that the price shock will be held hostage to external events and policy decisions that have little to do with economic fundamentals,” wrote Joe Brusuelas, chief economist at tax and audit firm RSM, in a Thursday analysis.

Household staples led the inflation spike
When inflation began to rise last spring, higher prices for goods uniquely affected by the pandemic led the way.

Prices for new and used cars spiked as repossessions paused and a global shortage of semiconductors hindered production. The chip shortage also sent prices for key electronics spiraling higher, but had limited impact beyond non-essential goods.

Households are now having a harder time dodging rising costs with prices for food, energy and shelter fueling much of the February increase in inflation.

Prices for food at home, typically purchased at grocery stores, rose 8.6 percent on the year and 1.4 percent in February alone.

“Everything from cereals to proteins have accelerated in price. Meat, fish, poultry and eggs slowed in January only to pick up again in February. Even peanut butter has jumped in price as consumers attempt to substitute away from more expensive sources of proteins,” wrote Diane Swonk, chief economist at Grant Thornton, in a Friday analysis.

Rent hikes are well underway
Rents have recovered rapidly after plunging in 2020 and have fueled inflation along the way. Rent of shelter rose 4.8 percent annually in February and 0.6 percent last month alone.

Costs for rental housing are likely to increase as the market heats up over the spring and summer.

Higher rents are particularly troublesome for inflation because shelter costs make up roughly one-third of the CPI. Rents also take much longer to fall than food and energy prices, which are usually more volatile, and are often harder for households to navigate.

Some supply lines are recovering
There were few silver linings in the February inflation report.

A monthly decline in used car prices was a welcome reversal after used cars rose 41.2 percent on the year.

Prices for video and audio gear, televisions, medical equipment and furniture also fell in February after supply chain malfunctions led to rapid price increases in 2021.

“Some of the bottlenecks in production caused by the pandemic—such as limitations in the production of key components caused by shutdowns in certain countries—will probably be alleviated in coming months, in part because of improvements in global health conditions and in part because producers have been building work-arounds. These developments will at least diminish further price increases and may lead to price reductions in some cases,” explained Karen Dynan, nonresident senior fellow with the Peterson Institute for International Economics.

War in Ukraine already taking a toll
While the February inflation report captures the economy before Russia launched its invasion of Ukraine, tensions leading up to the war are partly responsible for higher energy costs last month.

Fuel oil prices rose 6.7 percent and gas prices rose 6.6 percent in February alone as crude oil prices spiked ahead of the invasion. President Biden and Democratic lawmakers have dubbed the total increase in energy costs “Putin’s price hike,” pointing to the sharp rise in oil prices triggered by the Russian president’s belligerence.

While prices for gasoline and other goods had been rising long before Russian forces closed in on Ukraine, the conflict is likely to send them even higher. Russia has pledged to retaliate against crushing sanctions imposed by the U.S. and its allies, and the conflict itself is likely to shake the global supply of energy, wheat, and fertilizer.

“It would be wrong to call today’s February CPI report the calm before the storm,” wrote Ian Shepherdson, chief economist at Pantheon Economics.

“But March will be much worse, because it will reflect the full hit from the surge in gas prices triggered by the war in Ukraine.”
Sunoverbeach Offline
#412 Posted:
Joined: 08-11-2017
Posts: 10,737
No, being a father, you feel incredible. It's outrageous. The best thing for me is, well.. watching my baby breastfeed. It's something very special. I know he's only ten months old, but that's enough! Because I have this incredible fear, I have this fear that, during the night, a midget came in and took his place. So while my wife's breastfeeding, there's this midget going, "Hey, nice tomatoes! How are ya'!"
- RW
rfenst Offline
#413 Posted:
Joined: 06-23-2007
Posts: 36,625
Inflation 101: Here's why you're paying more for everything

ArLuther Lee, Atlanta Journal-Constitution

It's not your imagination.

Everything from a loaf of bread to a gallon of gas has skyrocketed in price over the past year.
Airline tickets are up 24%, men's suits nearly 15%, bacon 18%. Energy costs 32%.

Inflation soared over the past year at its fastest pace in more than 40 years, the Labor Department reports.

For the 12 months that ended in March, consumer prices rocketed 8.5%. That was the fastest year-over-year jump since 1981, far surpassing February's mark of 7.9%, itself a 40-year high.

Costs for food, gasoline, housing and other necessities are squeezing American consumers and wiping out pay raises that many have received.

Even core prices — which are other costs that do not include food and energy — climbed 6.5 percent over the year through March, up from 6.4% in the year through February.
When did all this begin?

Inflation, which had been largely under control for four decades, began to accelerate last spring as the U.S. and global economies rebounded with unexpected speed and strength from the brief but devastating coronavirus recession that began in the spring of 2020.

The recovery, fueled by huge infusions of government spending and super-low interest rates, caught businesses by surprise, forcing them to scramble to meet surging customer demand. Factories, ports and freight yards struggled to keep up, leading to chronic shipping delays and ultimately the ballooning of prices we are seeing today.
Who's to blame?

Critics blamed, in part, President Joe Biden's $1.9 trillion coronavirus relief package, with its $1,400 checks to most households, for overheating an economy that was already sizzling on its own. Many others argued that the Fed kept rates near zero far too long, lending fuel to runaway spending and inflated prices in stocks, homes and other assets.

A closer look
Prices were 8.5% higher in March than a year earlier. The following is a look at the rise in year-over-year inflation, and which categories are doing the most to drive it.

According to one of the latest studies detailing the impacts of inflation on consumer spending, the top twelve categories affecting consumers' daily lives the most include:
— Gas
— Groceries
— Dining
— Vehicle Prices
— Household Goods
— Rent/Mortgage
— Apparel, Footwear & Accessories
— Entertainment & Recreation
— Healthcare
— Education
— Travel, Hotels, Flights, Vacations
— Childcare

This was according to First Insight, a technology company that gathers real-time consumer data to predict consumer activity in retail markets.

Passing costs on to customers
Amazon.com announced this week that it will add a 5% "fuel and inflation surcharge" to fees it charges third-party sellers who use the retailer's fulfillment services as the company faces rising costs.

The company said in an announcement on its website that the added fees, which will take effect on April 28, are "subject to change" and will apply to both apparel and non-apparel items.

The turn to such measures by corporations like Amazon boils down to simple economics: with demand up and supplies down, costs will predictably rise. But companies find that they can easily pass along the higher costs in the form of higher prices to consumers, many of whom have managed to pile up extra savings during the pandemic.
How did we get here?

When the pandemic paralyzed the economy in the spring of 2020 and lockdowns kicked in, businesses closed or cut hours and consumers stayed home as a health precaution, employers slashed a breathtaking 22 million jobs. Economic output plunged at a record-shattering 31% annual rate in 2020′s April-June quarter.

Everyone braced for more misery. Companies cut investment and postponed restocking. A brutal recession ensued.
But instead of sinking into a prolonged downturn, the economy staged an unexpectedly rousing recovery, fueled by vast infusions of government aid and emergency intervention by the Fed, which slashed rates, among other things. By spring of last year, the rollout of vaccines had emboldened consumers to return to restaurants, bars, shops, airports and entertainment venues.

Suddenly, businesses had to scramble to meet demand. They couldn't hire fast enough to fill job openings or buy enough supplies to meet customer orders. As business roared back, ports and freight yards couldn't handle the traffic. Global supply chains seized up.

With demand up and supplies down, costs jumped. And companies found that they could pass along those higher costs in the form of higher prices to consumers, many of whom had managed to pile up savings during the pandemic.
Why it matters?

Many Americans have been receiving pay increases, but the pace of inflation has more than wiped out those gains for most people. In February, after accounting for inflation, average hourly wages fell 2.5% from a year earlier. It was the 11th straight monthly drop in inflation-adjusted wages.

Did anyone see this coming?
The Federal Reserve never anticipated inflation this severe or persistent. Back in December 2020, the Fed's policymakers had forecast that consumer inflation would stay below their 2% annual target and end 2021 at around 1.8%. Yet after having been merely an afterthought for decades, high inflation reasserted itself last year with brutal speed. In February 2021, the government's consumer price index was running just 1.7% above its level a year earlier. From there, the year-over-year increases accelerated — 2.6% in March, 4.2% in April, 5% in May, 5.4% in June. By October, the figure was 6.2%, by November 6.8%, by December 7%.

How long will this last?
Elevated consumer price inflation could endure as long as companies struggle to keep up with consumers' demand for goods and services. A recovering job market — employers added a record 6.7 million jobs last year and are adding 560,000 a month so far this year — means that Americans as a whole can continue to splurge on everything from lawn furniture to electronics. Many economists foresee inflation staying well above the Fed's 2% annual target this year. But relief from higher prices might be coming. Jammed-up supply chains are beginning to show some signs of improvement, at least in some industries. The Fed's pivot away from easy-money policies toward an anti-inflationary policy could eventually reduce consumer demand. There will be no repeat of last year's COVID relief checks from Washington. Inflation itself is eroding purchasing power and might force some consumers to shave spending.
Is there any relief in sight?

Biden has announced he'll suspend a federal rule and allow the sale of higher-ethanol gasoline this summer, trying to tamp down prices at the pump that have spiked during Russia's war in Ukraine. Most gasoline sold in the U.S. is blended with 10% ethanol. The Environmental Protection Agency will issue an emergency waiver to allow widespread sale of a 15% ethanol blend that is usually prohibited between June 1 and Sept. 15 because of concerns that it adds to smog in high temperatures. Senior Biden administration officials said the action will save drivers an average of 10 cents per gallon, but at just 2,300 gas stations. Those stations are mostly in the Midwest and the South, including Texas, according to industry groups.

What's next?
Measures of inflation will likely worsen in the coming months because recent reports don't reflect the consequences of Russia's invasion of Ukraine, which began on Feb. 24. The latest evidence of accelerating prices will solidify expectations that the Federal Reserve will raise interest rates aggressively in the coming months to try to slow borrowing and spending and tame inflation. The financial markets now foresee much steeper rate hikes this year than Fed officials had signaled as recently as last month. The overall economy is healthy, with a robust job market and extremely low unemployment. But many economists say they worry that the Fed's steady credit tightening will cause an economic downturn.
HockeyDad Offline
#414 Posted:
Joined: 09-20-2000
Posts: 43,095
I heard inflation was just transitory and nothing to worry about.
Krazeehorse Offline
#415 Posted:
Joined: 04-09-2010
Posts: 1,831
I heard it’s actually good for the economy.
izonfire Offline
#416 Posted:
Joined: 12-09-2013
Posts: 8,421
Higher prices increase the intrinsic value of goods and services.
And that’s a good thing…
RayR Offline
#417 Posted:
Joined: 07-20-2020
Posts: 5,436
izonfire wrote:
Higher prices increase the intrinsic value of goods and services.
And that’s a good thing…


Ya, I hear that's what they say on CNN and the New York Times.
So I definitely feel richer now when I go to the gas station or the Dollar & A Quarter Tree Store. nowadays.
Sunoverbeach Offline
#418 Posted:
Joined: 08-11-2017
Posts: 10,737
I'm not addicted to coke, i just love the way it smells!
- Richard Pryor
izonfire Offline
#419 Posted:
Joined: 12-09-2013
Posts: 8,421
RayR wrote:
Ya, I hear that's what they say on CNN and the New York Times.
So I definitely feel richer now when I go to the gas station or the Dollar & A Quarter Tree Store. nowadays.

See?
It worked…
rfenst Offline
#420 Posted:
Joined: 06-23-2007
Posts: 36,625
Americans expect a recession, but should you be worried?

Los Angeles Times

By many metrics, the U.S. economy is chugging along at a healthy clip. The latest readings on some key economic indicators are all good — unemployment is low, quarterly profits are high, home construction is up, retail sales continue to grow, and the gross domestic product showed solid growth.

And yet, a recent survey found that 4 in 5 Americans expect a recession this year.

"People are trying to talk themselves into a recession right now," said David Shulman, an economist who advises UCLA's Anderson Forecast.

Even Shulman sees trouble coming, however — just not until 2024. That's because of the eye-popping acceleration in inflation, which could eventually trigger a downturn. Those who live in parts of the country characterized by gasoline-sucking commutes and high housing costs, such as Southern California, may suffer more than others.


To help you understand the risks and what you can do to prepare for them, here are some facts and pointers about recessions and the current economic situation.

What is a recession?
The National Bureau of Economic Research — a private nonprofit, not a government agency — is the group that economists regard as the official scorekeeper of recessions. It defines a recession as a "significant decline in economic activity that is spread across the economy and that lasts more than a few months." Typically, that's meant at least two consecutive three-month periods when GDP has declined, taking inflation into account.

That's the technical definition. What recessions mean in human terms is a surge in unemployment as demand for goods and services drops, causing businesses to lay off workers, which further suppresses demand for goods and services. With companies retrenching instead of expanding, the unemployed have a tough time finding work, which exacerbates the slowdown.

It's a vicious cycle that the government tries to interrupt by pumping cash into the economy — normally by paying unemployed workers a portion of their previous wages for several months, but also occasionally by sending stimulus checks or enacting tax holidays. In the most recent recession, the federal government and California's state government opted for stimulus checks.

There is also a psychological dimension, when consumers lose confidence in the economy and rein in their spending. That's happening now, according to the Conference Board's survey of consumer confidence, which found the public growing more pessimistic about the future despite feeling better about their current situation.


"When you see $6 for gasoline," Shulman said, "you feel poor. In some people's minds, that's a recession."
What causes a recession?

Economists point to a variety of factors that can send the economy into reverse. The U.S. has endured three recessions so far in the 21st century, and each had a different cause.

The downturn from March to November 2001 was tied to steep losses in the stock market, first when the dot-com bubble burst in late 2000, then when terrorists flew planes into the World Trade Center on 9/11. The Great Recession, which ran from December 2007 to June 2009, was caused by a financial-industry meltdown tied to the subprime mortgage fiasco. And the brief but extreme downturn from February to April 2020 was a consequence of COVID-19 and the government-ordered restrictions on travel and commerce.

The common thread in each of those was a sharp decline in demand — either businesses and individuals had less money available or they weren't able to spend what they had.

The situation is dramatically different today. Demand is extremely strong because there's plenty of money sloshing around the economy, a situation created by rock-bottom interest rates, high employment, rising wages and aggressive federal borrowing and spending (to cover stimulus checks, among many other things).


But file this one in the too-much-of-a-good-thing category because the demand has greatly exceeded the supply of goods and services.

"Everywhere you look you see nothing but an insane degree of consumption," said economist Christopher Thornberg, founding partner of Beacon Economics in Los Angeles. Defenders of the big federal aid packages say that millions of Americans affected by COVID needed a rescue. But Thornberg counters, "No matter how you slice it, the federal government overstimulated this economy at an insane level over this last year."

Rapidly rising stock and home prices helped increase U.S. household net worth by more than a third since the start of the pandemic. "Americans are flush. We feel rich. And therein lies the problem," Thornberg said. "We're not rich. The economy does not have the capacity to produce products at the level people want them. In other words, this is false wealth."

This mismatch — which some economists blame entirely on the Federal Reserve pumping money into the system and others attribute at least in part to the COVID-related problems in supply chains, at factories and in service industries, exacerbated by the Russian invasion of Ukraine — is driving prices up. And prices will continue to go up, Thornberg said, until demand and production capacity are back in synch.


In response, the Federal Reserve is starting to raise interest rates, making it more expensive to borrow money. That change will affect businesses as well as consumers. Jim Doti, an economics professor at the Center for Economic Research at Chapman University, said the Fed is also dropping hints that it will start selling some of the bonds in its portfolio; doing so would increase upward pressure on interest rates and reduce the supply of money.

The one-two punch of higher prices and higher interest rates applies the brakes to a growing economy. The Fed's goal is a "soft landing" in which the tighter money supply eases demand while still allowing for some economic growth. But there are plenty of economists who fear that the Fed waited too long and acted too meekly, allowing inflation to become powerful enough to trigger a downturn.

"There is no soft landing," Thornberg said. "The horse is out of the barn."

What can you do to defend yourself?
Certified financial planner Barbara Ginty, host of Future Rich podcast, said the COVID-19 pandemic highlighted the importance of a personal emergency fund. She has heard clients call themselves "emergency-proof," but "2020 proved that you, yourself, might not have an emergency, but you cannot prevent an emergency of a global event."
"Having that good emergency fund can alleviate a lot of that financial stress" she said.

Nevertheless, millions of Americans don't have a stash to draw on if things go south. According to a Bankrate survey last year, a little more than half of the people sampled didn't have enough saved to cover three months of expenses, and a quarter of the people sampled had no emergency fund at all.

So although the economy is still humming along, it's a good idea to try to set aside some money. And the place to start, financial advisors say, is by creating a budget.

"Budgets are your financial strategy," said author Jesse Mecham, founder of the personal finance site youneedabudget.com. "And a strategy can involve cutting back. But it doesn't have to mean that specifically or necessarily.... A budget is just a plan, it's not a task master, it's not a warden and you're now in prison."

Creating a budget is mainly an exercise in figuring out where your money is coming from and going to, and seeing which things can be adjusted and which ones can't. The main point, Mecham and Ginty said, is understanding where your money is going and what's most important to you.

"You just have all these different options if you're very aware of what your money is doing and what you need it to do," Mecham said. "Most Americans just really aren't aware of what their money is doing. They're very reactive."

Thanks in part to the stimulus checks, Americans saved far more during the early days of the pandemic than they had in the previous four decades, although the savings rate has since come back down to Earth. How much you'll need in your emergency fund depends on your personal situation and your dependents, Ginty said, but having enough to cover one month of expenses is a good starting point.

Mecham said a financial cushion can give people time to find the silver lining in a downturn. "For a lot of people it's an opportunity," he said. "You can be more picky about the job you accept, more picky about the clients you choose to work for, more strategic about how to share child duties."
Sunoverbeach Offline
#421 Posted:
Joined: 08-11-2017
Posts: 10,737
How's my mama? How's your mama? I will slap you in the mouth with my d1ck.
- RP
rfenst Offline
#422 Posted:
Joined: 06-23-2007
Posts: 36,625
NYT
By Paul Krugman
Opinion Columnist


The U.S. economy is still very strong, with, for example, initial claims for unemployment insurance at their lowest point since 1969. Yet everyone is talking about recession. And the truth is that there is a significant chance of recession over the course of the next few years. But do people understand why?

Part of the answer is that there is always a chance of a recession in the near future, no matter what the current data look like. As the bumper stickers don’t quite say, stuff happens. There’s always a chance of, say, a financial crisis few saw coming or a war that disrupts world trade.

Our current situation, however, clearly creates elevated risks of recession, mainly because policymakers — mainly, in practice, the Federal Reserve — are trying to steer a course through opposing dangers. They could pull it off — in fact, my guess is that they will. But they might not. And here’s the thing: The kind of recession we have, if we do have one, will depend on which way the Fed gets it wrong.
Where are we right now? Inflation is, of course, unacceptably high. Some of this reflects disruptions — supply-chain problems, surging food and energy prices from the war in Ukraine — that are likely to fade away over time. In fact, I’d argue that these temporary factors account for a majority of inflation, which is why just about every major economy is experiencing its highest inflation rate in decades.

But inflation, which used to be mainly confined to a few sectors strongly affected by the pandemic, has broadened. So I find myself in reluctant agreement with economists asserting that the U.S. economy is overheated — that overall demand exceeds productive capacity and that the two need to be brought in line.

The good news is that there’s essentially no evidence that inflation has become entrenched — that we’re in the situation we were in circa 1980, when inflation persisted simply because everyone expected it to persist. Every measure I can find shows that people expect high inflation for the next year but much lower inflation over the medium term, indicating that Americans still view low inflation as the norm. Here, for example, are results from the New York Fed survey of consumer expectations:

Inflation, still not entrenched.
An aside: I wish people would stop talking about a “wage-price spiral.” Such a spiral is supposed to happen when workers demand higher wages because they believe they deserve compensation for a rising cost of living. Ask yourself: Does this sound like the America we live in these days? Who, exactly, are these workers who are demanding what they believe they deserve? We’ve become a country in which workers take what they can get, and employers pay what they must. In such a country, the whole wage-price spiral narrative makes no sense.

But back to the current situation. The fact that inflation is not yet entrenched offers the possibility of a soft landing. I’d schematically represent where we are and what should happen like this:

In the figure, potential G.D.P. is the level of output consistent with an acceptable rate of inflation — a level that grows over time. I agree — reluctantly, as I said — that we’re currently above that level. But we can close that gap without having a recession simply by slowing growth, while letting potential G.D.P. catch up. As long as inflation isn’t entrenched in expectations and temporary disruptions fade away, closing the gap should bring inflation down to an acceptable rate.
Why do I call this the “Goldilocks path”? Because, as the next figure shows, policy can err in either direction:

But there are two ways it could go wrong.
One possibility, which has been the subject of many, many rants from inflation hawks, is that the Fed is moving too slowly, that the economy will run too hot for too long — the red path in the figure — and that inflation will become entrenched. At that point, bringing the inflation rate down would require putting the economy through the wringer, the way Paul Volcker did in the 1980s, when it took years of extremely high unemployment to undo the inflationary legacy of the 1970s. That is, inadequate tightening by the Fed would set the stage for a nasty recession down the pike.

But there’s another possibility, which if you ask me isn’t getting enough attention. Namely, that the Fed will move, or maybe already has moved, too fast and that the economy will cool off much more than necessary. In that case — shown by the blue path in the figure — we could have an unnecessary recession, one that could develop quite quickly.
Why worry about this possibility? After all, so far the Fed hasn’t done much in the way of concrete action: It has raised the interest rate it controls by only a quarter of a percentage point. But the longer-term interest rates that matter for the real economy, especially mortgage rates, have already soared based on the expectation that there will be many more rate hikes to come:

The big squeeze has begun.
As a practical matter, then, the Fed has already done a lot to cool off the economy. Has it done enough? Has it done too much? That’s really hard to say.

After all, there’s a reason I used schematic figures rather than real numbers to make my argument in today’s newsletter. Most, though not all, macroeconomists seem to agree that the economy is at least somewhat overheated. But there’s no consensus on how much. Nor do we really know how much the rise in interest rates will slow the economy. And these uncertainties make the Fed’s job really hard right now.
What we do know, or at least what I’d argue, is that there is a path through this difficult moment that needn’t involve a recession. And while the Fed can get it wrong — and will almost surely get it wrong to some degree, because these are tricky times — it can get things wrong in either direction. Right now I am, if anything, worried that the Fed is overreacting to inflation. But time will tell.
Sunoverbeach Offline
#423 Posted:
Joined: 08-11-2017
Posts: 10,737
Sure, I have friends, plenty of friends, and they all come around wantin' to borrow money. I've always been generous with my friends and family, with money, but selfish with the important stuff like love.
- RP
rfenst Offline
#424 Posted:
Joined: 06-23-2007
Posts: 36,625
Opinion: Blame Washington, not Putin, for rising prices

E.J. Antoni,
The Heritage Foundation

How out of control is inflation? One measure says it all: Prices are now rising as fast in one month as they used to rise in a whole year when President Joe Biden took office.

The measure of inflation that gets the most attention is the consumer price index (CPI), which estimates the prices consumers are paying for a typical combination of goods and services. The CPI rose 8.5 percent in the 12 months from March 2021 to March of this year — the fastest increase in four decades.

The administration, seeking to salvage plummeting poll numbers, dubbed this “Putin’s price hike.” But there is considerable evidence that prices in March were going to be elevated, regardless of the war in Ukraine. 86 percent of the increase in the CPI occurred before the conflict began.

Furthermore, if the existing trend in the CPI over previous months had continued, prices still would have seen a large increase in March. Including that anticipated increase, more than 95 percent of the rise in consumer prices under Biden has nothing to do with the war in Europe.

The highest consumer price increases in decades have been baked into the cake for months. That’s because of previous price increases for businesses, known as wholesale inflation, which are eventually passed along to consumers.

If prices were to increase for a single business owner, it would be relatively difficult for him to pass those cost increases on to his consumers, and he may face operating at a continuing loss. But because inflation causes the costs for every business to increase, prices can be raised without losing customers to competitors, as no competitor is able to keep costs down without sacrificing the quality or quantity of their offerings.

When consumers face higher costs across the board, their only options are to pay more (often for less) or cut back consumption overall.

Wholesale inflation, as measured by the producer price index (PPI), was growing at a 1.6 percent annual rate when Biden was inaugurated. It did not take long for this administration to spend trillions of newly printed dollars, courtesy of the Federal Reserve. That fired up inflationary pressures, and the PPI quickly became red hot.

For each of the last 12 months, the PPI has set a new record high, reaching 11.2 percent in March. Wholesale prices in March rose so fast that prices will double in just four years if that pace were to continue.

Additionally, the PPI has risen faster than the CPI for every month of Biden’s presidency. That is further indication of continued price increases at the consumer level in the months to come as wholesale inflation is passed down to retail prices.

Those who were aware of the rise in wholesale inflation before March were already anticipating high inflation for consumers. The idea that these price increases suddenly arrived like a Russian artillery shell does not stand up to the data.

What’s driving up producer prices? While profligate spending of borrowed money by Washington has certainly juiced inflation, the Biden administration’s energy policies have proven particularly harmful. For over a year, the president has done everything in his power to hamstring American oil, coal and natural gas production. That dovetails perfectly with his campaign promise to force people into adopting unreliable energy sources that fit his “climate” agenda, the benefits of which are unproven.

From canceling pipelines, new drilling permits, and leases, to pressuring financial institutions into abandoning financing American fossil fuels, Biden has created a surefire recipe for less American energy and higher energy prices, particularly for diesel fuel. In most parts of the country, it now costs over $1,200 to fill up a semi-truck—twice as much as when Biden was inaugurated. The truck driver passes that cost on to whomever he delivers what he’s transporting. Ultimately, the consumer foots the bill by paying higher prices when the items that were transported by the truck driver are finally sold.

It is no coincidence that producer and then consumer prices, especially for energy, began escalating after Biden became president and long before the war in Ukraine. Restricting the supply of reliable energy and forcing the implementation of expensive “green” alternatives has driven up prices in both the PPI and CPI.

It was Washington, not Moscow, that planted this tree, and now it is bearing its rotten fruit.
____
ABOUT THE WRITER
E.J. Antoni is a research fellow for Regional Economics at the Heritage Foundation’s Center for Data Analysis and a Senior Fellow at Committee to Unleash Prosperity.
___
©2022 Tribune Content Agency, LLC.
Sunoverbeach Offline
#425 Posted:
Joined: 08-11-2017
Posts: 10,737
Friends take up time, and I didn't have time.
- RP
rfenst Offline
#426 Posted:
Joined: 06-23-2007
Posts: 36,625
Here’s why gasoline prices are spiking again


Politico

Prices at the gas pump are rising yet again as refiners turn to producing jet fuel and diesel instead of gasoline, and as demand jumps ahead of the summer driving season.

Prices across the country were already high before the most recent jumps. Russia’s invasion of Ukraine hit oil markets and global gas prices hard, driving up the price at the pump as governments turned away energy supplies from Moscow.

But prices are now going higher, and averaged $4.48 per gallon on Monday.

That’s up about 40 cents from a month ago, when prices stood at $4.08. Much of the most recent jump has come just in the past few days as prices rose 16 cents per gallon between May 9 and May 16.

Much as high gas prices colored the elections of 2008, when GOP vice presidential nominee Sarah Palin railed on Democratic energy policies, today’s prices are roiling this year’s political debate. Republicans are faulting President Biden’s policies, while Democrats are targeting companies for alleged price gouging.

Experts say the latest jump is linked to a variety of factors including fewer oil refiners making crude oil into gasoline.

Prices of both diesel and jet fuel, which are also made at refineries, are spiking, and experts say many refiners are turning toward making those more profitable products.

“With the market currently really tight both in diesel and jet fuel, we’re actually seeing refineries choose to make less gasoline in favor of those more profitable molecules,” said Matt Kimmel, a senior research analyst for refining and oil markets at Wood Mackenzie.

Patrick De Haan, head of petroleum analysis at gas price app GasBuddy, said that even prior to the latest setbacks, recent refinery closures diminished the country’s ability to produce gasoline.

In 2019, a refinery in Philadelphia caught fire; in 2020 a Canadian refinery closed because of COVID-19, and it has since been announced that it will convert into a biofuels operation; and last year, a refinery in Louisiana closed after flooding related to Hurricane Ida.

“The U.S. has now a million barrels a day less of refining capacity than we did in 2019 at a time when we need every barrel of capacity,” De Haan said.

Analysts said that these supply issues are combining with higher demand to pinch drivers.

“Typically … refineries are making more gasoline ahead of the summer driving season,” said Suzanne Danforth, Wood Mackenzie’s research director for downstream oil and natural gas liquids in the Americas market.

“That’s usually the peak of the gasoline demand in the U.S. with folks going on the road, but because of that diesel price being so high … we’re seeing sort of this counter-seasonal trend,” Danforth added.

Tom Kloza, global head of energy analysis at the Oil Price Information Service, said gasoline trading also was playing a role.

“In the last couple of days they’ve been buying gasoline futures and selling diesel futures, betting that gasoline’s coming into season and it’s going to need to fetch a price above diesel,” he said.

Futures contracts are agreements to buy or sell a particular amount of the product on a certain date in the future. Kloza described them as the “prime mover” of prices.

The high prices come as the Biden administration and the Federal Reserve struggle with inflation generally. President Biden recently described handling inflation as his top issue.

Democrats are worried the rising prices on everything will make it harder for the party to hold on to its House and Senate majorities. The party holds slim leads in both chambers, and the president’s party typically loses seats in the first midterm election regardless of the economy.

House Democrats are trying to put the focus on price gouging. This week, the House is expected to vote on legislation that in an energy emergency would make it illegal to sell fuel at a price that is “unconscionably excessive” and “exploiting” the situation.

The legislation would empower the Federal Trade Commission to take legal action against companies that sell at such “excessive” prices.

The legislation should pass the Democratic House but is unlikely to go anywhere in the Senate, where Democrats would need 10 GOP votes to clear procedural hurdles.

Kloza said that he is skeptical of Democratic claims of price gouging, calling it “posturing.”

“It’s all the people in the market — I mean thousands and thousands of people — that bid the price up. It’s not that ExxonMobil says ‘I’m going to sell my diesel for $200 a barrel,’” he said.

But the Democrats who support the bill are pointing to immense company profits and recently announced shareholder buybacks.

“If oil companies were merely passing costs onto consumers, we wouldn’t expect to see profits jump so significantly,” said a spokesperson for Rep. Katie Porter (D-Calif.), a sponsor of the bill. “These companies are continuing to raise prices despite their record profits, squeezing families in the process.”

A spokesperson for fellow sponsor Rep. Kim Schrier (D-Wash.) also noted that “not every state has a price gouging law, so this will also ensure all Americans can be protected from price gouging.”
rfenst Offline
#427 Posted:
Joined: 06-23-2007
Posts: 36,625
Here’s why gasoline prices are spiking again


Politico

Prices at the gas pump are rising yet again as refiners turn to producing jet fuel and diesel instead of gasoline, and as demand jumps ahead of the summer driving season.

Prices across the country were already high before the most recent jumps. Russia’s invasion of Ukraine hit oil markets and global gas prices hard, driving up the price at the pump as governments turned away energy supplies from Moscow.

But prices are now going higher, and averaged $4.48 per gallon on Monday.

That’s up about 40 cents from a month ago, when prices stood at $4.08. Much of the most recent jump has come just in the past few days as prices rose 16 cents per gallon between May 9 and May 16.

Much as high gas prices colored the elections of 2008, when GOP vice presidential nominee Sarah Palin railed on Democratic energy policies, today’s prices are roiling this year’s political debate. Republicans are faulting President Biden’s policies, while Democrats are targeting companies for alleged price gouging.

Experts say the latest jump is linked to a variety of factors including fewer oil refiners making crude oil into gasoline.

Prices of both diesel and jet fuel, which are also made at refineries, are spiking, and experts say many refiners are turning toward making those more profitable products.

“With the market currently really tight both in diesel and jet fuel, we’re actually seeing refineries choose to make less gasoline in favor of those more profitable molecules,” said Matt Kimmel, a senior research analyst for refining and oil markets at Wood Mackenzie.

Patrick De Haan, head of petroleum analysis at gas price app GasBuddy, said that even prior to the latest setbacks, recent refinery closures diminished the country’s ability to produce gasoline.

In 2019, a refinery in Philadelphia caught fire; in 2020 a Canadian refinery closed because of COVID-19, and it has since been announced that it will convert into a biofuels operation; and last year, a refinery in Louisiana closed after flooding related to Hurricane Ida.

“The U.S. has now a million barrels a day less of refining capacity than we did in 2019 at a time when we need every barrel of capacity,” De Haan said.

Analysts said that these supply issues are combining with higher demand to pinch drivers.

“Typically … refineries are making more gasoline ahead of the summer driving season,” said Suzanne Danforth, Wood Mackenzie’s research director for downstream oil and natural gas liquids in the Americas market.

“That’s usually the peak of the gasoline demand in the U.S. with folks going on the road, but because of that diesel price being so high … we’re seeing sort of this counter-seasonal trend,” Danforth added.

Tom Kloza, global head of energy analysis at the Oil Price Information Service, said gasoline trading also was playing a role.

“In the last couple of days they’ve been buying gasoline futures and selling diesel futures, betting that gasoline’s coming into season and it’s going to need to fetch a price above diesel,” he said.

Futures contracts are agreements to buy or sell a particular amount of the product on a certain date in the future. Kloza described them as the “prime mover” of prices.

The high prices come as the Biden administration and the Federal Reserve struggle with inflation generally. President Biden recently described handling inflation as his top issue.

Democrats are worried the rising prices on everything will make it harder for the party to hold on to its House and Senate majorities. The party holds slim leads in both chambers, and the president’s party typically loses seats in the first midterm election regardless of the economy.

House Democrats are trying to put the focus on price gouging. This week, the House is expected to vote on legislation that in an energy emergency would make it illegal to sell fuel at a price that is “unconscionably excessive” and “exploiting” the situation.

The legislation would empower the Federal Trade Commission to take legal action against companies that sell at such “excessive” prices.

The legislation should pass the Democratic House but is unlikely to go anywhere in the Senate, where Democrats would need 10 GOP votes to clear procedural hurdles.

Kloza said that he is skeptical of Democratic claims of price gouging, calling it “posturing.”

“It’s all the people in the market — I mean thousands and thousands of people — that bid the price up. It’s not that ExxonMobil says ‘I’m going to sell my diesel for $200 a barrel,’” he said.

But the Democrats who support the bill are pointing to immense company profits and recently announced shareholder buybacks.

“If oil companies were merely passing costs onto consumers, we wouldn’t expect to see profits jump so significantly,” said a spokesperson for Rep. Katie Porter (D-Calif.), a sponsor of the bill. “These companies are continuing to raise prices despite their record profits, squeezing families in the process.”

A spokesperson for fellow sponsor Rep. Kim Schrier (D-Wash.) also noted that “not every state has a price gouging law, so this will also ensure all Americans can be protected from price gouging.”
RayR Offline
#428 Posted:
Joined: 07-20-2020
Posts: 5,436
I came to the conclusion many years ago that the Democrats have become unconscionably evil and stupid to the extreme. OH! And BIDEN SUCKS!

There is also the fact that US oil exports to Europe continue to surge as the EU nears a full embargo on Russian crude
Did Politico mention that?

https://markets.businessinsider.com/news/commodities/us-oil-exports-surge-eu-embargo-russia-crude-ukraine-sanctions-2022-5?op=1
Sunoverbeach Offline
#429 Posted:
Joined: 08-11-2017
Posts: 10,737
Italy loves SPAM.
They make a drink with it called
"Asti Spamati."
RayR Offline
#430 Posted:
Joined: 07-20-2020
Posts: 5,436
Yes, the high priestess of the money magicians says she was wrong about that transitory inflation stuff.
My faith in the progressive ruling class is now forever shaken. How could I ever believe them again I say? Sad

Janet Yellen admits ‘I was wrong’ in anticipating the path of U.S. inflation

Treasury secretary tells CNN the Fed is doing what it needs to do to control inflation

Last Updated: May 31, 2022 at 8:16 p.m. ET

Quote:
Treasury Secretary Janet Yellen admitted Tuesday that she was “wrong” last year in believing U.S. inflation would not pose a long-term problem.

‘I was wrong about the path inflation would take.’


“I was wrong about the path inflation would take,” Yellen said in a CNN interview with Wolf Blitzer that aired Tuesday night. “There have been unanticipated and large shocks to the economy that have boosted energy and food prices, and supply bottlenecks that have affected our economy badly that at the time I didn’t fully understand.”

Last year, before Russia invaded Ukraine and new variants of COVID-19 swept the world, Yellen said that inflation posed a “small risk” and that she didn’t anticipate it was going to be “a problem.”

https://www.marketwatch.com/story/yellen-admits-i-was-wrong-about-underestimating-path-of-u-s-inflation-11654042558

Dg west deptford Offline
#431 Posted:
Joined: 05-25-2019
Posts: 2,644
https://www.cnbc.com/2022/06/01/jamie-dimon-says-brace-yourself-for-an-economic-hurricane-caused-by-the-fed-and-ukraine-war.html

Mercy!
When the economic procrastinators begin to see it coming & are bracing it's far past time for believers to began to cry out prepare us. "And I will break the pride of your power"
Sunoverbeach Offline
#432 Posted:
Joined: 08-11-2017
Posts: 10,737
What did the postman say when he misplaced all of his mail?
Where’s my mail?
RayR Offline
#433 Posted:
Joined: 07-20-2020
Posts: 5,436
Dg west deptford wrote:
https://www.cnbc.com/2022/06/01/jamie-dimon-says-brace-yourself-for-an-economic-hurricane-caused-by-the-fed-and-ukraine-war.html

Mercy!
When the economic procrastinators begin to see it coming & are bracing it's far past time for believers to began to cry out prepare us. "And I will break the pride of your power"


Ya, when Jamie Dimon is prepping the peeps for possible economic armageddon, you know things are looking really bad in BUILD BACK BETTER land.
He's always been primarily a Democrat donor, a socialist-fascist type guy at heart who has little interest in leaving the economy to the free market.
deadeyedick Offline
#434 Posted:
Joined: 03-13-2003
Posts: 14,414
Now that Joe has franked up the economy with his policies they’re switching to the message end of it as if that will fix things.

Nice!
HockeyDad Offline
#435 Posted:
Joined: 09-20-2000
Posts: 43,095
So it’s not transitory?
Sunoverbeach Offline
#436 Posted:
Joined: 08-11-2017
Posts: 10,737
How many introverts does it take to change a lightbulb?
One, unless they require assistance for some reason.
rfenst Offline
#437 Posted:
Joined: 06-23-2007
Posts: 36,625
More job gains point to solid economy and Fed rate hikes

Associated Press

WASHINGTON — U.S. employers added 390,000 jobs in May, extending a streak of solid hiring that has bolstered an economy under pressure from high inflation and rising interest rates.

Last month’s gain reflects a resilient job market that has so far shrugged off concerns that the economy will weaken in the coming months as the Federal Reserve steadily raises interest rates to fight inflation. The unemployment rate remained 3.6%, just above a half-century low, the Labor Department said Friday.

The job growth in May, though healthy, was the lowest monthly gain in a year. But it was high enough to keep the Fed on track to pursue what's likely to be the fastest series of rate hikes in more than 30 years. Stock market indexes fell Friday after the government released the jobs report, reflecting that concern.

Businesses in many industries remain desperate to hire because their customers have kept spending freely despite intensifying concerns about high inflation. Americans’ finances have been buoyed by rising pay and an unusually large pile of savings that were accumulated during the pandemic, particularly by higher-income households.

“Given all the talk we’ve heard about recession and economic headwinds, it was very reassuring to see a solid jobs number,” said Mark Vitner, senior economist at Wells Fargo.

One encouraging sign, Vitner said, was that hiring was broad-based across most of the economy.
“When the economy loses momentum,” he said, hiring tends to occur in just a few sectors, "and that’s not what we’re seeing today.”

Nearly every large industry added workers in May. One major exception was retail, which shed nearly 61,000 positions. Some large retailers, including Walmart and Target, have reported disappointing sales and earnings. Last month, Walmart said it had over-hired and then reduced its head count through attrition.

Construction companies added 36,000 jobs, a hopeful sign for Americans who have bought new homes that aren’t yet built because of labor and parts shortages. Shipping and warehousing companies, still struggling to keep up with growing online commerce, added 47,000 jobs. Restaurants, hotels and entertainment venues hired 84,000.

Last month, Friday's report showed, more Americans came off the sidelines of the workforce and found jobs, a sign that rising wages and plentiful opportunities are encouraging people to look for work. Still, the proportion of people who either have a job or are looking for one remains below pre-pandemic levels.

Rising prices might also have led some to take jobs: The number of people ages 55 or over who are working rose last month, suggesting that some older Americans are “unretiring” after leaving their jobs — or being laid off — during the pandemic and its aftermath.

Average hourly wages rose 10 cents in May to $31.95, the government said, a solid gain but not enough to keep up with inflation. Compared with 12 months earlier, hourly pay climbed 5.2%, down from a 5.5% year-over-year gain in April and the second straight drop.

Still, more moderate pay raises could ease inflationary pressures in the economy and help sustain growth.
Workers, in general, are enjoying nearly unprecedented bargaining power. The number of people who are quitting jobs, typically for better positions at higher pay, has been at or near a record high for six months. Layoffs are at their lowest level on records dating back 20 years.

Yet there are signs that some companies, facing rising costs for parts and labor, are starting to resist demands for higher pay.

One such executive is Jackie Bondanza, CEO of Hounds Town, a chain of doggie daycares with 30 locations in 14 states. Bondanza said people are applying for jobs at the company's headquarters in Garden City, New York, who don't necessarily have relevant experience yet are demanding pay above the listed salary.

“People are coming in demanding 30% more,” she said. “We can't afford to overpay for somebody.”

Even so, Bondanza plans to keep hiring to support the company's expansion. Hounds Town, which expects to open 50 new franchised outlets in the next 18 months, is seeking to fill three jobs, including a training director and a marketing director. The company now has 17 employees at its corporate office, up from five a year ago.

Inflation, she said, has yet to discourage most customers from seeking the company's services, which include daily care for dogs and boarding.

“We are seeing more dogs in our facilities than some of our stores know what to do with," Bondanza said.
Tom Gimbel, chief executive of the LaSalle Network, a staffing firm in Chicago, said his client companies are still eager to hire and to offer solid pay to new employees. But they're also being choosier about job applicants as a result.

After making clear to companies in the aftermath of the pandemic that they would have to pay more, he said, his firm is now starting to warn job seekers that they may not secure the huge raises they're seeking, given the higher costs many companies are struggling with.

“We’re now getting to a more normalized, healthy place,” Gimbel said.

A report Friday by Reuters said that Tesla's chief executive, Elon Musk, was considering laying off 10% of the company's workers, causing its shares to tumble. Musk also expressed concern about the economy in an email to executives in which he said to “pause all hiring worldwide.”

By contrast, on Thursday Ford Motor Co. said it planned to add 6,200 jobs in three states over the next several years as part of its expansion of electric vehicle production.

Nationally, the strength of the nation's job market is contributing to inflationary pressures. With wages continuing to rise across the economy, companies are passing on at least some of their increased labor costs to their customers in the form of higher prices. The costs of food, gas, rent and other items – which fall disproportionately on lower-income households -- are accelerating at nearly the fastest pace in 40 years.

Inflation had begun surging last year as spiking demand for cars, furniture, electronic equipment and other physical goods collided with overwhelmed supply chains and parts shortages. More recently, prices for such services as airline tickets, hotel rooms and restaurant meals have jumped as Americans have shifted more of their spending to those areas.

To try to cool spending and slow inflation, the Fed last month raised its short-term rate by a half-point, its biggest hike since 2000, to a range of 0.75% to 1%. Two additional half-point rate increases are expected this month and in July. And some Fed officials have suggested in recent speeches that if inflation doesn’t show signs of slowing, they could implement yet another half-point increase in September.

The Fed’s moves have already sharply elevated mortgage rates and contributed to drops in sales of new and existing homes. The rate hikes have also magnified borrowing costs for businesses, which may respond by reducing their investment in new buildings and equipment, slowing growth in the process.
rfenst Offline
#438 Posted:
Joined: 06-23-2007
Posts: 36,625
Wonking Out: How Low Must Inflation Go?

NYT

As I pointed out in my latest column, the politics of inflation are dominated by concerns about gasoline and food prices — precisely the prices over which policymakers in general, and the president in particular, have the least influence. Economists, by contrast, usually focus on measures that try to get at underlying inflation, excluding highly volatile stuff like, well, energy and food.

Actually, the traditional definition of “core” inflation — the one usually used by the Federal Reserve — which excludes only energy and food, has been problematic in the post-pandemic era. Why? Because we’ve been seeing some wild fluctuations in other prices, like used cars. So there’s growing emphasis on other measures of core inflation, like the Dallas Fed’s “trimmed mean” measure, which excludes extreme price movements in either direction. You can see the difference in this figure, which shows three-month rates of change in the two measures since 2020 (month to month is too noisy, whereas annual changes lag too far behind events):

Traditional core inflation has been highly variable, the alternative measure less so. Both measures, however, have eased off lately. It looks as if underlying inflation is running at something like 3.5 to 4 percent.

Easing inflation is good. But we’re still well above 2 percent inflation, which the Fed and other central banks have traditionally seen as their target. And the Fed is set to continue tightening until that target is hit.

So why is 2 percent the target? I’m not going to crusade against the 2 percent solution. But anyone interested in economic policy should know that the history of how 2 percent came to define “price stability” is peculiar, and that the argument for keeping that target is grounded less in straightforward economics than in almost metaphysical concerns about credibility.

One way to see the peculiarity of 2 percent is to take a longer view of inflation, going back to 1984, the year of “morning in America.” At the time, the United States was experiencing rapid economic growth because the Fed, which had squeezed the economy extremely hard to end double-digit inflation, had relaxed monetary policy because, in its view, inflation had been vanquished. By 1984, and for the rest of the 1980s, the Fed felt comfortable about inflation because it was running at around only 4 percent:

The point, of course, is that during Ronald Reagan’s second term, America’s underlying inflation rate was roughly what it is now. Yet policymakers were strutting around boasting about their victory over inflation, and the public didn’t see inflation as a major concern:

So how did 4 percent inflation come to be considered excessive and 2 percent acquire sacred status? It’s a long story, in which New Zealand, of all places, played a crucial role.

But the short answer is that 2 percent seemed to offer an easy answer to a dispute between economists who wanted true price stability — zero inflation — and those, including a guy named Larry Summers, who thought we needed somewhat positive inflation to preserve the Fed’s ability to fight recessions. The stable-price crowd was willing to believe that 2 percent was actually zero, because conventional inflation measures understated the benefits of technological progress. The room-to-act crowd believed that 2 percent was high enough that the Fed would rarely end up cutting interest rates all the way to zero and finding that it wasn’t enough.

As it turned out, however, this latter judgment was all wrong. The Fed and other central banks have spent much of the past 15 years with interest rates as low as they can go, desperately seeking other tools to stimulate their economies:

As a result, a number of economists have suggested that the inflation target should be raised. For example, in 2010 Olivier Blanchard, then the chief economist of the International Monetary Fund, made the case for an inflation target as high as 4 percent. I made similar arguments to the European Central Bank a bit later.

None of these arguments got much real-world traction, however, perhaps because central bankers weren’t convinced that a higher inflation target would help them very much. But right now we face a different question: How much are we prepared to pay to get back to 2 percent?

Again, if the Fed were to apply the standards that prevailed in the 1980s, it would consider the current rate of inflation acceptable and declare victory. Instead, it’s putting a squeeze on credit markets and risking at least a mild recession to get us down to 2 percent from 4 percent. Why? It’s not because there’s a compelling economic case. As Blanchard and his co-authors asked back in 2010, “Are the net costs of inflation much higher at, say, 4 percent than at 2 percent?” There’s no real evidence to that effect.

As best I can tell, the main reason Fed officials are insistent on getting back to 2 percent is concern about credibility. They fear that if they ease off at, say, 3 percent inflation, markets and the public will wonder whether they will eventually accept 4 percent, then 5 percent and so on. One reassuring aspect of the current bout of rising prices is that longer-term inflation expectations have remained “anchored,” so that there are no signs of a 1970s-type wage-price spiral. Giving up on the 2 percent target might risk losing this anchor.

Being honest, if I were a decision maker at the Fed, I would probably have the same concerns. But it seems important to realize that if we are about to have a recession, which is certainly possible, it won’t be because hard economic considerations require that we squeeze inflation all the way back down to 2 percent. What we’re seeing instead is monetary policy driven by softer, vaguer concerns about credibility. We live in peculiar times.




Paul Krugman has been an Opinion columnist since 2000 and is also a distinguished professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography.
Sunoverbeach Offline
#439 Posted:
Joined: 08-11-2017
Posts: 10,737
What happens every 60 minutes?
An hour passes.
RayR Offline
#440 Posted:
Joined: 07-20-2020
Posts: 5,436
Sunoverbeach wrote:
What happens every 60 minutes?
An hour passes.


No, every 60 minutes Paul Krugman tells another story about how inflation is good for ya and the gubment doesn't spend enough money.
rfenst Offline
#441 Posted:
Joined: 06-23-2007
Posts: 36,625
RayR wrote:
No, every 60 minutes Paul Krugman tells another story about how inflation is good for ya and the gubment doesn't spend enough money.

You want zero inflation on your home, if you own one? Maybe even some deflation on the value of your home when the long-term average home appreciation? Not the historical 3.5% approximate rate. You want zero inflation so you can get a lower rate on your cash savings? Some inflation can be good and a small amount is necessary. But, wait a minute... you don't like the Fed. I forgot. Never mind.
RayR Offline
#442 Posted:
Joined: 07-20-2020
Posts: 5,436
rfenst wrote:
You want zero inflation on your home, if you own one? Maybe even some deflation on the value of your home when the long-term average home appreciation? Not the historical 3.5% approximate rate. You want zero inflation so you can get a lower rate on your cash savings? Some inflation can be good and a small amount is necessary. But, wait a minute... you don't like the Fed. I forgot. Never mind.


You are conflating "price inflation" with "monetary inflation". two different but can be related and often intertwined things.
But you are correct, I hate the FED banksters. Their artificial manipulation of interest rates to the downside is what greatly accounts for what you think is "home appreciation". If money is artificially cheap and easy to borrow, people will bid up on assets. The FED is responsible for the boom and bust business cycle which has led to repeated economic downturns, recessions, and depressions since its inception, something they were promised back in 1913 to prevent.

In turn, monetary inflation deflates the value of the dollar under a fiat monetary system which eats into what you think is asset appreciation. Today’s dollar would be worth less than 4 cents back in 1913. Winning!???

Their artificial manipulation of interest rates to the downside is what leads to more irresponsible government spending too and debt accumulation. It is basically a too big to fail bailout scheme for the crooked politicians and bureaucrats as they pile on more public debt from FED money printing.
rfenst Offline
#443 Posted:
Joined: 06-23-2007
Posts: 36,625
The Fed risks future pain if it fails to curb inflation today


Bloomberg Opinion

A consensus has formed that the Federal Reserve waited too long to start tightening money. Ben Bernanke, the former Fed chairman, has said so. Janet Yellen, another former chairman who now serves as Treasury secretary, has implicitly agreed, saying that she, like many other observers, underestimated how high inflation would run for how long.

But Fed watchers are still disagreeing about another question: Is the central bank tightening too much and too fast now?
Josh Bivens, the head of research at the Economic Policy Institute, a progressive think tank, is worried. “If we have a recession because the Fed moves too fast and too high on interest rate hikes, that will be a clear mistake,” he recently told Huffington Post.

Washington Post columnist Megan McArdle notes that the last time the Fed took on high inflation, when Paul Volcker led it in the early 1980s and had to get inflation down from double digits, it won only at the cost of a brutal recession. The costs of a recession are so high that she thinks the Fed should probably “stabilize inflation and then lower it gradually” — if that’s possible.

That preference, like the concern underlying it, is reasonable, and how fast the Fed should raise rates is a matter of degree and judgment. But comparing our circumstances to Volcker’s should push the Fed toward acting faster.

Volcker became Fed chairman in August 1979. But it wasn’t until 1981 that the central bank made a sustained break with the easy-money policies of the preceding years. Inflation (measured by personal consumption expenditures) hit a peak in mid-1981, as did the growth rate of spending throughout the economy. The unemployment rate was already at 7.2% by that point. Volcker’s tight money induced a recession that pushed it up an additional 3.6%.

Today the unemployment rate is 3.6% total. Prime-age labor force participation is higher than it was then, too. The labor market is thus in much better shape to handle monetary tightening.

There was more inflation to wring out of the economy back then, too. By 1981, inflation had been high for years. The annual rate had been above 8% for a decade. Today’s inflation hasn’t been as persistent.

This means it isn’t nearly as entrenched. The difference in yields between bonds that are adjusted for inflation and those that are not implies that market participants predict inflation will run at an average below 2.5% during the period from six to 10 years from now. Inflation expectations are, as central bankers say, “well-anchored.”

That’s good news, but its implications are ambiguous. If you’re relatively dovish about inflation, you could look at those low expectations and say there’s no cause for alarm and no need to take drastic action. But the other way of looking at it is that low inflation expectations reduce the price of fighting inflation.

In a world where everyone expects prices to rise about 10% a year, fighting inflation means upending those expectations. Employees get used to needing large raises just to keep up with the cost of living. Employers either have to disappoint them or see their real, inflation-adjusted costs spike. That process of adjustment is a major reason that fighting inflation so often involves tolerating higher unemployment.

When inflation expectations are subdued, on the other hand, the adjustment need not be so painful. That’s our relatively happy situation now, in spite of our justifiable complaints about the post-pandemic inflation. The Fed ought to bring expected inflation down a bit, and certainly to keep it from rising. It doesn’t need to bring it down dramatically.

The costs of a relatively quick restoration of monetary stability thus look low. Putting off that restoration, on the other hand, risks letting those expectations drift upward. We’re not in 1981, having to choose between continued high inflation and a severe recession. We’re in 1968, deciding whether to halt inflation in its early stages so that we never reach 1981.
Some Fed policy makers appear to be thinking roughly along these lines at the moment. Lael Brainard, the Fed’s vice chair, says lower inflation is currently job one and the economy “has a lot of momentum.” Mary Daly, head of the San Francisco Fed, has spoken similarly in recent days.

But there are also signs that central bankers are still too hesitant about getting inflation under control. The Fed’s latest projections show inflation running above 2% through 2024 and then settling at 2% over the long run. That implies that total dollar spending doesn’t come back down to its pre-pandemic trajectory.

One way of interpreting those projections: The Fed doesn’t expect the Fed to tighten enough. Maybe it would have more confidence if it acted with greater speed.
_____
Ramesh Ponnuru is a Bloomberg Opinion columnist. He is the editor of National Review and a fellow at the American Enterprise Institute.
jyduffy Offline
#444 Posted:
Joined: 06-06-2022
Posts: 1
Way back in the 'old' days when I went to school and Macro Economic Theory was a requirement to get a degree, we learned inflation was almost entirely a result of the money supply (M2). Of course there are 'experts' like Krugman who will never agree to such a simple theory but, as M2 rises so do most (all?) consumer prices. And even if you never took Econ101, any application of logic will tell you as more $ get into the economy, the scarcity of each $ is reduced. M2 is up $1.34T in the last 12 months- over 6.5%. 6.5% MORE dollars are in the economy than a year ago. Any dimwit could predict higher prices.

I bet Krugman believes the Gold Standard was a waste of time too. Create a chart of M2 and/or inflation since 1971- It's a thing that makes you go hmmmmm.......
Sunoverbeach Offline
#445 Posted:
Joined: 08-11-2017
Posts: 10,737
Want to hear something that will make you smile?
The muscles in your face.
RayR Offline
#446 Posted:
Joined: 07-20-2020
Posts: 5,436
jyduffy wrote:
Way back in the 'old' days when I went to school and Macro Economic Theory was a requirement to get a degree, we learned inflation was almost entirely a result of the money supply (M2). Of course there are 'experts' like Krugman who will never agree to such a simple theory but, as M2 rises so do most (all?) consumer prices. And even if you never took Econ101, any application of logic will tell you as more $ get into the economy, the scarcity of each $ is reduced. M2 is up $1.34T in the last 12 months- over 6.5%. 6.5% MORE dollars are in the economy than a year ago. Any dimwit could predict higher prices.

I bet Krugman believes the Gold Standard was a waste of time too. Create a chart of M2 and/or inflation since 1971- It's a thing that makes you go hmmmmm.......


Krugman says, “a return to the gold standard would be a bad idea.”
Because Krugman the Keynesian inflationist hates the idea that the proles could have a dollar that could have stable buying power and the FED couldn't print money out of thin air to enrich the political class that he serves and loves and also there would be no need for a central bank at all then, something which horrifies lefties.

So Krugman lies about and mischaracterizes stuff trying to make dumb people think he's being real smart.
rfenst Offline
#447 Posted:
Joined: 06-23-2007
Posts: 36,625
Global Growth Will Be Choked Amid Inflation and War, World Bank Says


NYT

For large and small nations around the globe, the prospect of averting a recession is fading.

That grim prognosis came in a report Tuesday from the World Bank, which warned that the grinding war in Ukraine, supply chain chokeholds, Covid-related lockdowns in China, and dizzying rises in energy and food prices are exacting a growing toll on economies all along the income ladder. This suite of problems is “hammering growth,” David Malpass, the bank’s president, said in a statement. “For many countries, recession will be hard to avoid.”

World growth is expected to slow to 2.9 percent this year from 5.7 percent in 2021. The outlook, delivered in the bank’s Global Economic Prospects report, is not only darker than one produced six months ago, before Russia’s invasion of Ukraine, but also below the 3.6 percent forecast in April by the International Monetary Fund.

Growth is expected to remain muted next year. And for the remainder of this decade, it is forecast to fall below the average achieved in the previous decade.

Other than a handful of oil-exporting nations like Saudi Arabia, which are benefiting from prices above $100 a barrel, there is barely a spot on the globe that has not seen its outlook dim. Among the most advanced economies like the United States and Europe, growth is forecast to slow to 2.5 percent this year.

China, the second-largest economy and the engine of much of the world’s increasing prosperity in recent decades, is projected to see growth drop to 4.3 percent from 8.1 percent in 2021.

Emerging nations will experience the harshest setback, with the blows from the pandemic and the Ukraine war still reverberating. The poorest nations will grow poorer, hungrier and less secure.

Roughly 75 million more people will face extreme poverty than were expected to before the pandemic.

Per capita income in developing economies is also expected to fall 5 percent below where it was headed before the pandemic hit, the World Bank report said. At the same time, government debt loads are getting heavier, a burden that will grow as interest rates increase and raise the cost of borrowing.

“In Egypt more than half of the population is eligible for subsidized bread,” said Beata Javorcik, chief economist at the European Bank for Reconstruction and Development. “Now, that’s going to be much more expensive for government coffers, and it’s happening where countries are already more indebted than before.”

In some ways, the bank said, the economic threats mirror those in the 1970s, when spiraling oil shocks followed by rising interest rates caused a paralyzing stagflation, or a menacing combination of high prices and low growth. That combination of events triggered a series of financial crises that rocked developing nations, resulting in what was known as a “lost decade” of growth.

Fortunately, the global economy and governments are better positioned to manage the challenging combination than they were 40 years ago, the World Bank said. The dollar is strong, as are the balance sheets of most financial institutions. Despite the sudden jump in energy prices, the increase is still not of the magnitude experienced in the 1970s. Central banks also have a credible record of managing inflation, which helps keep self-defeating inflationary expectations in check.

The United States, which has many fewer economic ties with Russia and is less dependent on Russian energy than Europe, is less vulnerable to the fallout from the Ukraine war and retaliatory sanctions.

“The war is expected to cause a major recession in Europe and Central Asia,” the report warned. “In addition to its tragic human toll, the invasion is expected to cause a devastating economic contraction in Ukraine this year, a sharp recession in Russia, and a significant slowdown” in the rest of the region.

Russia’s economy is expected to shrink 8.9 percent — a hefty reduction, though one that is smaller than predictions by other forecasters.

At the same time, Europe is dealing with one of the biggest waves of refugees since World War II as nearly seven million Ukrainians, predominantly women and children, have streamed across the border to avoid the violence. Even though some have returned home, the sudden strain on host countries’ budgets and resources further stresses economies when they are already under pressure.

Spillover effects radiate outward. In some Central Asian countries, a significant chunk of the economy comprises remittances that citizens working in Russia send back home, Ms. Javorcik of the reconstruction and development bank said. Those payments are now reduced because of the downturn. Countries that benefit from Russian tourism, such as Cyprus, Armenia and Estonia, are also taking hits, she said.

Elsewhere, the impact can be more critical. The Democratic Republic of Congo, Madagascar, Rwanda and Uganda, which rely heavily on grain exports from Russia and Ukraine to feed their populations, will have to confront high food prices for an extended period.

Global growth slows. The fallout from the war has hobbled efforts by major economies to recover from the pandemic, injecting new uncertainty and undermining economic confidence around the world. In the United States, gross domestic product, adjusted for inflation, fell 0.4 percent in the first quarter of 2022.

Energy prices rise. Oil and gas prices, already up as a result of the pandemic, have continued to increase since the beginning of the conflict. The sharpening of the confrontation has also forced countries in Europe and elsewhere to rethink their reliance on Russian energy and seek alternative sources.

Russia’s economy faces slowdown. Though pro-Ukraine countries continue to adopt sanctions against the Kremlin in response to its aggression, the Russian economy has avoided a crippling collapse for now thanks to capital controls and interest rate increases. But Russia’s central bank chief warned that the country is likely to face a steep economic downturn as its inventory of imported goods and parts runs low.

Trade barriers go up. The invasion of Ukraine has also unleashed a wave of protectionism as governments, desperate to secure goods for their citizens amid shortages and rising prices, erect new barriers to stop exports. But the restrictions are making the products more expensive and even harder to come by.

Food supplies come under pressure. The war has driven up the cost of food in East Africa, a region that depends greatly on exports of wheat, soybeans and barley from Russia and Ukraine and is already dealing with a severe drought. Amid dwindling supplies, supermarkets around the world have begun asking customers to limit their purchases of sunflower oil, of which Ukraine is a top exporter.

Prices of essential metals soar. The price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.

“Insecurity and violence continue to weigh on the outlook” for many low-income countries, the World Bank said, while “more rapid increases in living costs risk further escalating social unrest.” Several studies have pointed to rising food prices as an important trigger for the Arab Spring uprisings in 2011.

In Latin American and the Caribbean, growth is expected to slow to 2.5 percent from 6.7 percent last year. India’s total output is forecast to drop to 7.5 percent from 8.7 percent, while Japan’s is expected to remain flat at 1.7 percent.

The World Bank, founded in the shadow of World War II to help rebuild ravaged economies, provides financial support to low- and middle-income nations. It reiterated its familiar basket of remedies, which include limiting government spending, using interest rates to dampen inflation and avoiding trade restrictions, price controls and subsidies.

Managing to tame inflation without sending the economy into a tailspin is a difficult task no matter what the policy choices are — which is why the risks of stagflation are so high.

At the same time, the United States, the European Union and allies are struggling to isolate Russia, starving it of resources to wage war, without crippling their own economies. Many countries in Europe, including Germany and Hungary, are heavily dependent on either Russian oil or gas.

The string of disasters — the pandemic, droughts and war — is injecting a large dose of uncertainty and draining confidence.

Among its economic prescriptions, the World Bank underscored that leaders should make it a priority to use public spending to shield the most vulnerable people.

That protection includes blunting the impact of rising food and energy prices as well as ensuring that low-income countries have sufficient supplies of Covid vaccines. So far, only 14 percent of people in low-income countries have been fully vaccinated.

“Renewed outbreaks of Covid-19 remain a risk in all regions, particularly those with lower vaccination coverage,” the report said.


Patricia Cohen is the global economics correspondent based in London. Since joining The Times in 1997, she has also written about theater, books and ideas. She is the author of “In Our Prime: The Fascinating History and Promising Future of Middle Age.”
Sunoverbeach Offline
#448 Posted:
Joined: 08-11-2017
Posts: 10,737
What do you call cheese that isn’t your cheese?
Stolen
RayR Offline
#449 Posted:
Joined: 07-20-2020
Posts: 5,436
I've heard the World Bank has fenced a lot of stolen cheese.
Brewha Offline
#450 Posted:
Joined: 01-25-2010
Posts: 10,558
Sunoverbeach wrote:
What do you call cheese that isn’t your cheese?
Stolen

Damn - I was betting on nacho cheese....

I think you might be getting a little too intellectual for us sob.
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