U.S. Economy: A Tale of Two Views

Last Wednesday’s news that the Federal Reserve Bank issued a half-point less than prior interest rate hikes brought some relief to economists and lawmakers, and the White House, and then the news that inflation was lessening brought even more relief, but then as the camera pulled in closer, that sense of optimism dimmed since employment in the US is still red hot and employers are in a bidding war to hire the most talent, and they are doing that by increasing wages, a direct path to higher prices for the consumer, something that has worried the Fed for some time.

The US is still adding 200,000 jobs per month, and that is part of the problem, and it was a concern for the November Jobs Report, and may still be one for December’s but to add to the mix there was the November CPI data, released a few days prior by the US Bureau of Labor Statistics, softer than expected by some traders and financial market analysts, and was described as a “game changer”, according to Marketwatch.com..

Cost of living showed strength and rose only by 0.1% on a monthly basis, which was accompanied by a stock and bond rally, and as reported, “November’s annual headline CPI rate fell to 7.1% from 7.7% in the prior month, marking the lowest level since the end of 2021, after peaking at 9.1% in June.”

“We were all expecting a softer report, but this is pretty significant and makes people question what the Fed is going to do moving forward,” said John Farawell, head of municipal trading at bond underwriter Roosevelt & Cross in New York. “We had been thinking 50- to 75-basis-point rate hikes, but now know that Wednesday’s move will be 50 and the one after that may be 25 in February,” he said via phone to their reporter.

Taking a quick glance at that good news, The New York Times reported: “Fed officials voted unanimously at the conclusion of their two-day meeting to raise borrowing costs by half a percentage point, a pullback after four consecutive three-quarter point increases. Their policy rate is now set to a range of 4.25 to 4.5 percent, the highest it has been since 2007.”

That however does not mean that their cuts will go away, since those pesky prices have to be dealt with, still, and includes higher borrowing prices as a target, as the Times stressed.

“We’ve continually expected to make faster progress on inflation than we have,” Jerome H. Powell, the Fed chair, said during his news conference after the release. He described the Fed’s new expectations as: “slower progress on inflation, tighter policy, probably higher rates, probably held for longer, just to get you to the kind of restriction that you need to get inflation down to 2 percent.”

Recession fears are also a concern, and while part of inflation fighting,  he said, in response, “We have more work to do.”

That decision by the Federal Markets Open Committee to raise interest points by only 50 basis points, “a step down from the 75 basis points seen over the previous four meetings. Of course, 50 basis points is still a historically large increase, and we still have some ways to go, “ Powell reiterated.

“The Fed’s higher rates are expected to cool the economy notably next year. Central bankers predict that unemployment will jump to 4.6 percent from 3.7 percent now, and then remain elevated for years. Growth is expected to be much weaker in 2023 than previously anticipated, pushing the economy to the brink of a recession.”

Those predictions are for three more quarter-point incremental increases, and for 2023, a 5.1 % increase upending the 3.15 percent in September.

All of these moves, aggressive, not so, or even in between, can take their toll on US workers, of grave concern for lawmakers, such as Sen. Elizabeth Warren (D-Mass.) who said, “He’s pushing too hard to get more people fired because he thinks that this is one way to help bring down inflation.” in her remarks to HuffPost, and added, `But it’s sure painful for the families who lose their jobs.”

As noted earlier, while rate increases are the tool to reduce inflation, the balancing act calibration is tricky, and their moves to slow spending though inflation rate hikes means that money can be more expensive to borrow, but if spending slows too much, there will be layoffs, mostly affecting lower-income families as Huffpost noted.

That tip into recession brought a reply, of sorts, by Powell, who said, “I don’t think anyone knows whether we’re going to have a recession or not, and if we do, whether it’s going to be a deep one or not . . . . “It’s not knowable.”

“The central bank’s aggressive stance comes as central bankers worry that inflation will remain high for years to come. Though price increases are already beginning to moderate from the four-decade highs they reached this summer, the Fed’s economic projections make clear that policymakers think it is going to take years to return inflation fully to their 2 percent goal”, opined the Times.

Going a step further, we have this: “And though the Fed expects to keep rates above 5 percent through the end of 2023, investors are still betting that the central bank will stop raising rates sooner and begin cutting them earlier,” bringing market fears.

“Financial markets want black and white, and you’re working in shades of gray,” said Diane Swonk, chief economist at KPMG, explaining that investors are not internalizing the Fed’s nuanced message,” reported the Times.

To make matters worse, “That divergence could be a problem for central bankers. Higher stock prices and lower market-based interest rates make money cheaper and easier to borrow, helping to stimulate the economy — the opposite of the Fed’s goal as it tries to lower inflation.”

 

 

November US Jobs Report singing the same tune

At the risk of sounding like a well-worn record, the November Jobs Report released by the US Labor Dept. on Friday is a repeat of prior months with its surge of jobs and employers scrambling to find the right talent, and willing to pay more to get them. 

The problem is that this pattern has steadied the ladder on inflation and increased the efforts of the Federal Reserve Bank to tamp down inflation with increased interest rates, and in what seems like an upward climb for them, it has replaced the earlier doom and gloom reports of recession.

Fridays numbers showed an increase of 263,000 non farm jobs, much higher than the expected 200,000 most economists predicted, and unemployment remains predictable at 3.7 percent, (which is also pushing up wages) against a background of an added jobs in 2022, according to The Hill, “more than it did in the economic boom years” up the Covid pandemic. In fact there have been “two open jobs for each unemployed American as recently as September according to Labor Dept. data.”

Increased earnings are another headache for the Fed, and Chairman Jerome Powell has noted as such, over the last few reports, and earnings increased by 0.6 percent in November and reached 5.1 percent for the past 12 months.

Backing into the detail, it was also reported, “The biggest news in this release is large upward revisions in wage growth for September and October and a big number for November,” Jason Furman, who chaired the White House Council of Economic Advisors (CEA) under former President Obama, said on Twitter.

“This is the second time this year we’ve seen [revisions] like this dashing the hopes that maybe nominal [wage] growth was cooling,” he continued.

Powell has noted “To be clear, strong wage growth is a good thing,” in remarks at The Brookings Institution, but cautioned, “But for wage growth to be sustainable, it needs to be consistent with 2 percent inflation, ”a mandate for the Fed, besides full employment.

He recently added this warning: they have “a long way to go” before inflation will fall back to pre-pandemic levels.

While the labor force participation rate has flatlined, it has also become a significant factor for employers to try and tease them from the sidelines with sign on bonuses, and such, but for many, especially women, lacking adequate childcare, they are forced to stay on those sidelines, along with those workers who took advantage of the Covid lockdown to evaluate their jobs, often moving away from jobs that require long hours on their feet, or in long distance transportation jobs.

There are some bright spots: leisure and hospitality with increases of 5.8 percent, and an increase with health care and hospitality. But, those were offset by losses in transportation and warehousing which dropped 15,000 jobs, and retail with a 30,000 job loss, totaling by 62,000 since August.

Retailers were also gearing up, by decreasing holiday hiring by some cautious employers, such as Macy’s and Walmart, fearing that customers were going to face higher prices, and spend less.

Money.com noted that, “Folks are expected to feel "sticker shock" when they go shopping for holiday gifts because prices have risen with inflation, says Andrew Flowers, a labor economist for recruitment advertising company Appcast. Companies are concerned Americans will react to these price hikes by spending less money, impacting their bottom lines and reducing the need for extra staff.

“Consumers are going to face a holiday season with higher prices,” Flowers says. “Inflation, and all the knock-off effects of inflation, are going to likely slow consumer spending this season, and whether it's retailers or warehouse employers, they are going to have to respond.”

There are others that see a brighter light with increased consumer spending, but they are in the minority, and with that spending as the main driver of the US economy, this is an area of concern.

Some sectors are shedding employees, said The Wall Street Journal, “with many growing nervous about the economic outlook,” as they see consumers transitioning from spending on goods to services; restaurants in particular. Some see a reduction than layoffs, noted Guy Berger, principal economist at LinkedIn.

Revisions to figures along with the household survey might show less hiring than payroll figures suggest, opined the Journal.

The reaction from the White House was jubilant, and President Biden said, “We continue to create jobs — lots of jobs,” he told reporters before signing a bill to avert a nationwide rail strike. “We’re in a situation where things are moving — moving in the right direction.”

Post midterm: Can GOP reign without Trump

American voters woke on Tuesday to see which party would govern Congress, only to learn that the final results were unsettled, with vote counting to continue for days or weeks. One thing is uncertain: the much ballyhooed Red revival failed to materialize, and while the Democrats breathed a sigh of relief, for better returns than they thought, Republicans were furious as few of former President Trump’s favored candidates had significant gains.

While some wags have called this the thin pink line, others have noted that the country may have decided they wanted a balance of opinion for the ruling party, yet while we wait for the final tally, to see if the GOP can win the House, and/or the Senate, it’s also possible that the House could remain in the hands of the Democrats and retain Nancy Pelosi as Speaker of the House.

One issue seems to have defined voters to give the Dems the home field advantage and that is abortion, and women’s reproductive rights, that a majority of Americans favor abortion with some restrictions, at 60 percent according to Pew Research. And, while there were some Democrats, Bernie Sanders included, who felt that it might have not been enough, in the end it did prove to be enough.

Voters in Republican leaning Kentucky overturned an anti abortion amendment, one of the most restrictive in the country; and in MIchigan Gov. Gretchen Whitmer, ruling over a now Democratic controlled state legislature, won, in part as a champion of abortion rights, noted The Washington Post, and lastly in North Carolina where restrictions are now banned, in what was thought to be a veto proof majority.

Another surprise is that the ferocity of the MAGA crowd, and its doom and gloom scenario of militant teachers, marching lockstep with transgender and LGBT people, coupled with soft on crime Democrats, did not produce the desired push for that alleged Red wave.

The best case scenario, for the GOP, if they win a narrow victory in the House, is that the Biden administration might be able to have more legislative wins, while the more radical GOP, especially people like Marjorie Taylor Green might bear down on their Speaker of the House who will bear the brunt of their anger and force, currently favored to be Kevin McCarthy, and while he has worked the phones, is not an automatic choice, needing 215 votes from House lawmaker votes.

Some are saying that the sharp elbowed Jim Jordan might be the better choice, but in a contest of wills, it's all over but the fighting.

While Trump has been seen by many supporters as the head of the Republican party with his outsized influence, some observers are beginning to wonder if he has lost the Midas touch as both his candidates and his lie about winning the 2020 election seem to be fading, at least for now, as the deciding factor, but as we see, that does not mean it isn’t winning, for some.

While Trump says that he might run again, Scott Jennings, a Republican strategist told The Hill on Wednesday, “How can you look at these results tonight and conclude Trump has any chance of winning a national election in 2024?”

Nipping at his heels as a 2024 candidate is the victorious Florida Gov. Ron De Santis whose sweep over contender Charlie Christ, is already legend, and while predicted, there are some GOP supporters who see him as a more viable presidential candidate for 2024, one that carries less baggage than Trump with his cringe inducing moments, grinning in concert with Russian Federation President Vladimir Putin, his anti Asian labels of Covid as the Asian Flu, and his casting away of former supporters such as Jeff Sessions, or his litany of alleged violations of his financial empire, that seems to have been built on sand.

On the technical side it seems that mail in voting has reached a zenith and while extending the counts also seems to suggest that fraud is elusive, and with that, the absence of potential violence at the polls, gave a measure of safety to the electorate, and as President Biden noted, “without much interference at all. . .”

There were some election deniers who “tried to to undermine this election before polls even closes, seizing on problems with vote counting machines in Arizona and a likely delay in Pennsylvania to spin viral theories of vote manipulation” led by Trump who claimed that the election, was being stolen yet again from the Republicans, noted Rosalind S. Helderman of The New York Times.

While this was true, it has not been without support, as we heard over lunch, when two old duffers loudly proclaimed that the “Democrats stole the election from Trump,” before stomping out of the diner.

The durability of this lie has taken hold in the newly elected Congress, and among them are members of the House, Senate, governors, secretaries of state and attorney generals, nearly a thirds, so far, according to The New York Times analysis, but there has also been a significant number of election deniers that were not elected.

This seems to be a force majeure, in the GOP playbook, despite the fact that there has been no credible evidence that the 2020 election was fraudulent, but perhaps this statement of durability, says it all from Russell Fry, a Congressman from South Carolina, who said that it was “clear that it was rigged.”

One aspect of this election is that the absence of old fashioned retail politics with door to door visits seems in the abeyance and when it was done, it worked well, when it was not, candidates lost.

An emerging trend is ranked voting to support a closer support of a candidate and to avoid rancor on the part of some voters and while it was previously seen in the New York City mayoral race, it is now spreading to other state elections and Nevada is using it in the midterms

Simply put it asks voters to rank order their choice of candidates and avoids a run off, because it is an inherent part of the process, and allows for less rancor and as an advocate has said, it gives more room for voter principles.

With rancor being on the front line in this politically divided country, depending on Nevada, and in the past, Alaska, spreading further to midterms might be a positive direction.

This might have helped Tom Ryan advance over JD Vance in the ever so tight Ohio race, where Vance came in as a darkhorse and emerged a victor in a game changer from an Ivy League educated brahmin to a flannel clad good ole boy, writ large.

One gain for Democrats is the number of Black officials across the state and federal slate: Wes Moore as governor of Maryland, joined by the first Black attorney general, Anthony Brown, and Summer Lee as the first Black Congresswoman for Pennsylvania.

For the LGBT community wins are also historic wins for the Dems: Beca Blunt to Congress from Vermont, Erick Russell as treasurer for Connecticut, who is not only gay, but Black, a first in the United States.

Erick Russell

All of this, of course, is background to the larger story of who will control Congress, and as of this writing, with Georgia as a runoff, Arizona and Nevada remain as the races to watch for in the Senate, and for the House: New York, Maryland, California, Colorado, Oregon, Nevada,and Alaska. With leads on both sides of the aisle in some districts.

Let the nail biting continue.

October employment in US keeps pressure on inflation

Friday’s report from the US Labor Dept for October showed, still, the resilience of the American job market with 261,000 jobs gained, despite the predictions of economists of a number closer to 200,000 based on the September report that had a gain of just below 315,000, and these consistently high numbers have caused the Federal Reserve Bank to issue another increase, this time, once again, of 3.75 percentage points to fight inflation.

The hgh job numbers coupled with high wages, have allowed many Americans to increase demands for both goods and services, even with those wages buying power reduced by inflation.

Wage growth has been a factor since late summer and its growth has kept pressure on Inflation, as The Wall Street Journal reported In August:

“Wage gains help consumers spend money in the face of higher prices for restaurant meals, groceries and lodging. But many companies are having to pay more for labor at the same time that other business expenses are rising, including for transportation and logistics, said Omair Sharif, head of forecasting firm Inflation Insights LLC.”

Those prices are passed on to consumers, he added.

As most Americans have seen, at the gas pump, and at the supermarket, “wages haven’t kept pace with inflation. Private sector wages and salaries declined 3.1% in the second quarter from a year earlier, when accounting for inflation,” added the Journal.

With the current inflation, the highest in 40 years, showing no signs of abatement, the central bank has its hands full to meet its Congressional mandate of maximizing employment and stabilizing prices, the latter being the most difficult. 

“What I see in this is the imprint of beginning weakness,” said Diane Swonk, the chief economist at KPMG. “But it’s not enough to derail the Fed.”

While many have blamed President Biden for failure to act, the responsibility lies fully in the hands of the Reserve, under the direction of Jerome Powell, and its measures, interest rate hikes, are the key to lowering the temperature of inflation, and this report does show that there has been some effect, just not enough, and as we have noted before, the efforts at calibration has risks: too much, and there is the chance of a deep recession, with attendant job loss (mostly on the lower end) sending shockwaves across the economy, but letting inflation become the norm, then we have the problem of the 70s and 80s, where inflation became the norm, until Paul Volcker stepped in to intervene.

The unemployment rate of 3.7 percent, what we refer to as the marquee rate, is normally balanced with the household survey, but that is being temporarily suspended due to a format change.

Equally worrisome is the labor force participation rate which at 62.2 has barely moved, with many people, on the sidelines, and some, especially older workers fearful of the still present Covid virus, and those who have sought training, and education for another field; and, this has become especially true for service workers in restaurants, and hotels, to relieve themselves of long hours standing on their feet. 

In total 4.1 million have quit their jobs.

 

Still others, mostly women, who don’t have adequate child care (an area that the US lacks) have left the workforce to care for them.

One often unnoticed facet of the jobs  market deficit has been a shortfall in immigration, and this shortage “has become an economic problem for America,” according to The Economist, they noted that it is “harder for companies to find workers and threatens to do more damage to the economy, But whereas unauthorised border crossing are a perennial controversy, the drop in overall immigration has barely registered in Congress.”

Looking at fiscal year 2020/2021, we have the addition of only 247,000 people, continuing a pre pandemic trend but that was exacerbated in 2017, by the Trump administration restrictions “from several predominantly Muslim countries.”

This has been especially seen in restaurants and accommodation sectors, “which draws a quarter of its employees from the foreign born population, [and] could not fill about 15% of job openings last year.”

In short,  before then,“New immigrants accounted for nearly 70% of the growth in the American labour force in the 2010s.”

On a somewhat brighter note, for Black Americans, the unemployment rate has been 5.3, from 5.8 percent unemployment,reflecting some possible changes, although mostly unattributable to a specific reason.

The outlook despite inflationary fears is solid and “All in all, the job market is still hot,” said Daniel Zhao, an economist at the career site Glassdoor, to The New York Times, and “There’s still some cushion before we actually hit the ground.”

For Biden, the report, coming just before the midterm elections, offers some good news, but it’s a mixed bag as he faces a barrage of criticism from the right, who seeing the inflationary numbers, say it is  all his fault. Nevertheless he said in a statement from the White House on Friday, “While comments by Republican leadership sure seem to indicate they are rooting for a recession, the U.S. economy continues to grow and add jobs even as gas prices continue to come down.”

While the Fed may make smaller interest rate increases, say some, at its December meeting, Powell had to backtrack hopes, by noting that any actions in that area would depend on the data, and indeed most Reserve observers have noted, much like his predecessor, Janet Yellen, he is data dependent.

Also part of the mixed bag is the effect on consumers and while the slight dip in employment shows some effect as we have noted, but mortgage rates took a slight dip before Friday’s numbers were released, down from the prior week of 7.16, yet as  Bankers Association, reported that the 30 year rate had fallen to 7.06 percent on the average, “mortgage rates have still shot up to more than 7 percent, up from 4.2 percent in March and from their pandemic low point of 2.7 percent”, according to The Hill.

Since mortgage rates on a 30 year fixed “don’t move in tandem with the Fed’s benchmark rate, but instead track the yield on 10 year treasury bonds” with multiple factors interplaying, it bears watching for investors and buyers.

For the rental market there is some easing according to the Zumper National Report, with one bedroom apartments decreasing to 0.8 percent to a dollar figure of $1,491.00, and two bedrooms lowered by 0.7 percent, or $1,832, across most urban markets; and while, this smaller decrease in rentals offers some hope, most realtors don’t see this as a trend, but something to be watched.

And, watched, it will be.

The November report, once released, will have a great deal of attention by the market, as well as the government, and commercial interests, as it might be a bellwether for the end of the 4th quarter of 2022,  as well as a harbinger for January of 2023.

FAFSA change creates headaches for college families

In our last report on why American colleges are so expensive, we focused on the costs, the financial aid process, and the role of accreditation in deciding how students receive both needs based and merit aids. But, now there are changes to the Free Application for Federal Student Aid (FAFSA) form, the fee-less form that opens the door to federally financial aid, and in some instances school, or state based aid.

For many years parents with multiple children enrolled in college, at the same time, received a discount making it more affordable for parents.

That has all changed and in a 2020 proposal from Sens. Lamar Alexander of Tennessee and Patty Murray of Washington State, the discount has been eliminated, in an effort to equalize access to aid for lower income families, especially those whose income is $100,000, or below to increase access to Pell Grants.

This is a form of academic outreach to those students, and their families, and the goal is to increase access to higher education for those who need it most. And, to note, Brandeis is using the new form to enhance that population and is using the version only for returning students whose gross family income is less than $100,000 according to Sherri Avery,  vice president of student financial services in a conversation with USA News.

Approximately 13 million college bound students complete the form, and some state that the changes to the FAFSA were designed to simplify the form both visually, and with content to match other formats; and in fact the number of questions were reduced from 108 to 36.

“It also uses a new formula for determining the “Expected Family Contribution” (EFC) — which will be renamed the “Student Aid Index” (SAI). The new FAFSA will still request information on the number of children in your household, but the SAI will no longer provide a discount for multiple children in college at the same time,” according to Mass Mutual’s blog.

“We also used to suggest to families with kids who are two years apart in school that the oldest child consider a gap year, so they can at least divide their EFC for those three years when their kids would be in college at the same time,” said Brock Jolly, a financial professional with The College Funding Coach in Vienna, Virginia. “These strategies will no longer work.”

The previous version had an equal division by the number of children enrolled concurrently.at college. 

Now, using a hypothetical calculation of a family income of $50,000 a first child would qualify for $8,000 with an EFC of $42,000 per year, but with the second child starting the following year, the EFC will be divided between the two children of $21,000 each, and then a third child would be calculated on a 33 percent basis. And, further for the hypothetical fourth child, based on school costs and rankings.

The winners are those aforementioned low income families, and the losers are the middle income and higher families.

While the high income families won’t get much they may get access to being able to simply write a check for annual tuition costs; and, Jolly noted to the blog that, “There are colleges out there that will make admissions decisions based upon your ability to pay full fare,so if school X looks at your FAFSA and sees that your family’s EFC (soon-to-be SAI) is six figures or more, they may be more likely to accept that student over another candidate who would need financial aid. A full-pay family may have a small leg up.”

The lower income families may get more in traditional forms of aid such as work-study, and loans with possible low interest rates.

This new reality means that spreadsheets used to calculate estimated costs will be revised, but let’s also remember that parents don’t know what aid their children could get since that is not given till acceptance, and as we’ve noted schools can afford to be stingy, especially with in-state calculations for state based schools, where parents lack the competitive edge, with lowered tuition versus students from out of state paying more.

Often overlooked, especially for those students desiring entrance to posh schools such as Harvard, Princeton, or Dartmouth is that these schools are well endowed, and can offer more, especially to low income students, especially with merit aid.

For some the drill down on college applications for their high school seniors not only took a U turn with the changes of the FAFSA sibling discount, there is another option and that is to complete the College Scholarship Service (CSS) Profile, and while the detailed questions might be intimidating, the sibling discount is available.

In its original converge, The New York Times quoted “Sandy Baum, a nonresident senior fellow at the Urban Institute, said she understood the financial strain that families might feel when multiple children were in college. But given that college costs are now paid by saving and borrowing over a decade or more, she said, it doesn’t make sense to give, essentially, a bonus to families just because they have two children attending college simultaneously.

“There’s no reason why a family with twins should get more money,” she said. “It’s not fair to families with different spacing” of children.”

The National Association of Student Financial Aid Administrators has noted “Eliminating the sibling bump also makes it possible to create a simple chart that families can check to see if they qualify for Pell grants, according to a statement from the association. Factoring in the number of students in college would have made it “unworkable.”

US Jobs report for September kept on growing

If there is too much of a good thing,then the September Jobs Report released by the US Labor Dept on Friday, then that news of 263,000 nonfarm payrolls gave the Federal Reserve enough of the jitters to wonder how much more that can be done to lessen the hiring, and by turn, the still high wages that desperate employers are using to lure the best talent that is needed to attract them, and enough to frustrate the Feds as they struggle to meet their twinned mandate of full employment and 2 percent inflation.

There is so much resilience in the American economy, and that has recovered nearly all of the jobs lost to the Covid pandemic, yet there are still employers that need workers, even after lessening educational requirements, forgiving prior marijuana convictions, but still the need for more employers.

Women are still underrepresented and child care workers are one group that have lost employees, and the consequence is that many women are staying at home to take care of their children. Labor Force participation, overall, has stayed relatively the same, and 62.3 percent, a notch higher than in August.

While some have definitely decided to reevaluate their skill set and move away from prior jobs, but for many men, largely unaffected by child care are holding back, a conundrum for the Reserve, who is expected as The New York TImes stated, another “jumbo sized” rate increase, with bets of another 0.75 percent. And, while time will tell, the economy is like a watched pot that never boils.

The unemployment rate has inched down to 3.7 percent from 3.5 making it robust and also resilient, which equals a fifty year low; but, the elephant in the room is still inflation that has nibbled away at wage increases, as the public struggles to deal with high rents, and food prices, some even seeing double dollar increases on such prosaic groceries, such a doughnuts, not to mention the more protein based options such as meat.

Those wages up by 5 percent on an annual basis, and monthly by 0.3 percent, are not keeping up with inflation is a huge problem for consumers even as they have moved away from consumer products to services.

Fed governor Phillip T. Jeffries told the Times that he felt that “upward wage pressures in the future” can be problematic. But, some areas have faced challenges, and transitions, for example from the traditional nursing home, to aging in place with home health care aids, an area that has surged.

Some see that  a recession is inevitable, or are we inevitably, say some, conjoined with European central banks that say the same things, or are we on rosier shores in the US, or are we simply rearranging deck chairs on the Titanic?

Of course, the Fed moves, calibrated as they need to be, will lead to less jobs, especially for those wage earners at the low end.

“Mohamed El-Erian, Allianz’s chief economic adviser, said on Sunday that the U.S. is heading toward a recession that was “totally avoidable” amid ongoing concerns about inflation and economic stability, reported The Hill on Sunday, and also said that there was simple mismanagement by the Fed.

“One is mischaracterizing inflation as transitory. By that, they meant it is temporary, it’s reversible, don’t worry about it. That was mistake number one. And then mistake number two, when they finally recognized that inflation was persistent and high. They didn’t act. They didn’t act in a meaningful way,” 

Taking a closer look at some significant changes that Inflation has done has led to a lessening in an area that many had thought steady, leisure and hospitality, whether it's hotel room service, or restaurant servers. 

Retail is also seeing a downward path with major retailers such as Walmart saying that they will cut their holiday hiring, while the online retail giant, Amazon says it will not. 

A gamble, maybe, or is caution, the watchword?

Meanwhile the tone from the White House is optimistic as President Biden said to workers at a Hagerstown, Md. Volvo plant, “Our job market continues to show resilience as we navigate through this economic transition, the pace of job growth is cooling while still powering our recovery forward.”

With the November midterms nipping at his heels Biden has tried to sell the middle course as a path to recovery, while his Republican opponents want to tag him, and him alone, with failure to address inflation, which is really the province of the Federal Reserve, but with swords drawn for a fight, truth doesn't matter, but votes do.

Many economists don’t necessarily believe in this cooling as having much effect, but it plays well in Peoria, as the old comedians used to say.

Can De Santis recover from the migrant transport?

 For many months Florida Gov. Ron De Santis has been seen as a viable candidate for the 2024 presidential race against incumbent Joe Biden, and for the Republican party this meant that they could capitalize on the issues that former President Donald Trump championed: anti masks, the Covid pandemic, that he called, “the Chinese Flu,” but most of all his anti immigrant stance that he kept front and center of his initial campaign statements.

Those that supported those positions, but recoiled at the ill will towards his personality, found a new hero in De Santis, the “un Trump”, as he played the GOP playbook better than Trump, with statements and actions geared towards his base: the masking debate in public schools, the suspicions that Covid was not real, and his anti LGBTQ stance, especially when it came to public school textbooks and the push against Critical Race Theory, even though it is only taught in law and other graduate schools; but, the truth didn’t matter, because these,and other controversial positions are the bread and butter of the GOP.

He seemed like a sure winner ready to battle Trump for the nomination, until his recent transports of mostly Venezuelan asylum seekers, who had been granted permission to stay in the US, pending  legal processing, to Martha's Vineyard the elite Democratic vacation spot home to the late Jacqueline Kennedy Onassis, Valerie Jarrett, and former President Barack Obama and his family, plus many others.

The pie in the face event pushed the issue of legal, and illegal migration, front and center to the Biden administration, and then Texas Governor Greg Abbott went even further by sending buses full of migrants to the home of Vice President Kamala Harris, which was duly covered by FOX TV even thought there was no notice to Washington D.C. Mayor Muriel Bowser.

A sticking point in the story is that the migrants were in Texas, not Florida, and took a circuitous route to South Carolina, and then to the Vineyard.

In both instances, local governments and authorities, especially those on the vacation island scrambled to feed, clothe, and house these refugees and migrants, many of who came with nothing more than the clothes on their backs, as they escaped from the economic, and political perils of living in Venezuela, many earning less than the US equivalent of $20.00, per month, plus gang violence fueling fears, and the willingness to undertake a tortuous journey, much of it on foot to reach the American border.

Clearly branded as a political stunt, these actions are beginning to hurt the perfect pitch of De Santis, and his efforts to be a presidential candidate. And, while the moral outrage from many liberal circles has been countered by the applause of his supporters, his image is being tattered by those who think that he has gone too far..

There is life outside of talking points, and a pending lawsuit by some of the migrants that they were duped with false information, by a shadowy women named “Perla” who lured the migrants with the promise of jobs, and housing and a mostly false brochure outlining benefits in Massachusetts (written in Florida) is angering many, especially independent voters who might be the linchpin in De SaIntis efforts, even as he tag teams with Abbott, in an enterprise that shows hubris to some, and cockiness to others.

Ready technology, much of it pocket sized, has sent the images of the displaced far beyond the intentions of Abbott and De Santis.

A bit of bragging never hurt: “All the people in D.C. and New York were beating their chest when Trump was president, saying they were so proud to be sanctuary jurisdictions, De Santis told a group in the Florida Panhandle, and “The minute even a small fraction of what those border towns day with every day are brought to their front door, they all go berserk.”

There is a grain of truth in his statement, but using part of a $12 million war chest of taxpayer money might not go down as well as he expects, despite questions about what exactly a sitting governor might be charged with, the lawsuit notwithstanding.

What remains unclear is that only $615,000 was used, but this was a claim by his Democratic rival Charlie Crist, and yet from others that the amount may be interest of the $5.8 billion dollars given to Florida as part of the American Rescue Plan.

Recent reports have said that $1.6 million dollars was given to a contractor, possibly the private air carrier, or others, but some reports have indicated that the $615.00 was given to the carrier, as partial payment, and there is the amount of $950.00, which came from a public records, with some speculation that this was another payment to the same carrier, but questions remain if these are shell companies, to hide the true identities of the recipients.

It is known that Vetrol was a political donor to the Republican Party.

The New York Times reported that some in Latin America “have accused Mr. De Santis and Mr. Abbott of being largely out of touch with the crisis on the ground in Venezuela,” and even hypocrisy toward their criticisms of the Maduro government.

The Biden administration has struggled, internally, as we have learned, with how to handle the increase in immigration at the border and the mess that was inherited from Trump whose detention of migrant children, and whose videotaped tears, filled nightly news segments; with some saying that internal dissension has contributed to a fractured response to the burgeniung numbers at the Southern border.

When arriving Haitians, escaping violent gangs, were seen being whipped by Texas border guards, all viewers were appalled. Coupled with the welcome of the  Afghanistan refugees, and its comparatively smooth entry, after the US withdrawal, accusations of racism abounded, making many observers question what would be a consistent, even moral response from the Administration.

Chiming in was President Andreas Manuel Lopez Labrador of Mexico who criticized Abbott's authorization of the Texas National Guard to detain migrants, and he noted, “Since there are elections in November, then they’re looking for sensationalism, for scandal,” and that such actions were “immoral.”

For Venezuela the “shattering of the economic, social and democratic crisis” has been branded the worst by economists, resulting in 6.8 million Venezuelans, “more than a fifth of the population have left the country . . .” noted the Times.⁹

Equally troubling is that the United States has struggled with immigration for decades, especially a large influx of Eastern and Southern Europeans after World War I, and after World War II it created an asylum process for those fearing prosecution of race, religion and nationality; and, problematic are those that have filed false claims, knowing that the process can take years.

Title 8 from the Biden administration has drilled down on those that are filing false statements and can deport them, is not as well known as the fears of job loss by Americans, and the racial bias that underlies many of these self same fears.

Legality, including actions by the San Antonio Sheriff Javier Salazar bring moral outrage, but even then we have to return to actionable offenses.

There are also appeals to the US Department of Justice, as California Gov. Gavin Newsom, a Democrat, has “encouraged Garland to investigate where the false hopes, and inducements “would support charges of kidnapping under relevant state laws,” and could lead also to charges of racketeering, reported The Hill, and, he has been joined in this by Massachusetts Attorney General Rachel Rollins.

This will be an ongoing struggle and one that might garner headlines, while even more migrants arrive in even more Democratic strongholds.

Updated Sept. 25th at 1:48 CDT