Consumer sentiment in the US has plunged to an all-time low amid soaring inflation, even as Treasury Secretary Janet Yellen expresses puzzlement at Americans’ dim view of the economy.
Treasury Secretary Janet Yellen said that “it’s amazing how pessimistic” Americans are about the economy, “given that we have the strongest labor market we’ve had in the entire postwar period.”
In other words, “stop whining, you have a job.”
And what of the consumer sentiment details. The University of Michigan’s index of consumer sentiment plunged 14 percent this month from May to its lowest level since the survey began in its current form in the mid-1970s, according to a preliminary report on Friday. See this in the chart below and learn more here.
We don’t really need to show this again, but in case you live in a cave, below is the chart of our current 40-year high US inflation rate of 8.6%. And it could be just the beginning, along with falling GDP rates – see here.Yellen’s comments state that even with recent Fed rate hikes in the works, there will be no recession, inflation will get tamed, and the Biden administration will keep everyone employed – in other words, a perfect economic soft-landing is in the works. See her comments below.
"Nothing to suggest a recession is in the works," @SecYellen tells @andrewrsorkin at @dealbook. "I believe there is a path through this that entails a soft landing with the economy essentially stabilizing near full employment." pic.twitter.com/9zIdlq9Zhz
— Squawk Box (@SquawkCNBC) June 10, 2022
One can only say, “it’s amazing how out of touch our political leaders are.” Unfortunately, it is not the first time Yellen has gotten it wrong. See her admit below that her call on inflation a year ago was way off. What assurance that she is right this time?
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When you fail at your job because of a basic inability to understand what was obvious to even “non-professionals”, and your mistake destroys the lives and livelihoods of tens of millions of American citizens, you resign, so someone more competent can take over, right? @SecYellen https://t.co/RFnJhltXAm
— Viva Frei (@thevivafrei) June 2, 2022
As another example of how out of touch our politicians are out of touch, see a ridiculous comment from smiling and snarky Democrat Senator Debbie Stabenow on high gas prices – “stop whining and just run out and buy an electric vehicle for a mere $60,000.”
Sen. Debbie Stabenow (D-MI) says she drove her electric vehicle past every gas station and it didn't matter to her how high the price was.
Median income of my constituents in #PA16: $54,627. Avg. EV price: $60,000.
Democrats don't understand the problems of everyday Americans. pic.twitter.com/4DZBS7F5Of
— Rep. Mike Kelly (@MikeKellyPA) June 7, 2022
Janet Yellen speaks that we have all these jobs. And what of these jobs? Employers added 436,000 workers to their payrolls in May, bringing the total number of employees to 151.7 million, according to the Bureau of Labor Statistics survey of employers. Payrolls remain 822,000 employees below the pre-pandemic peak and far below the pre-pandemic trend. This means jobs are about 6.3 million below normal trendline growth. See this in the chart below and learn more here.
Total Nonfarm Job Openings are a measure of all jobs that are not filled on the last business day of the month. A job is considered open if a specific position exists and there is work available for it, the job can be started within 30 days, and there is active recruiting for the position. Total Nonfarm Job Openings are measured by the Job Openings and Labor Turnover Survey (JOLTS) and published by the Bureau of Labor Statistics (BLS). See this in the chart below and learn more here.
Have wages kept pace with inflation? Overall average hourly earnings ticked up by 0.3% (10 cents) from the prior month to $31.95 in May and were up by 5.2% from a year ago. See this in the chart below.
So the answer is no, wages have not kept pace with inflation. These charts show that the average worker is losing 3.4% per year. It may not sound like a lot, but when you start accumulating these losses over the years, it adds up. It also doesn’t tell the whole story.
- The average worker is losing 3.4% per year.
- The CPI is an average. For the renter class at the bottom of the social-economic ladder, the CPI can be significantly higher (often double) – see here.
- The JOLTS report looks impressive at first glance – there seem to be a lot of job openings. But are these jobs real and at a wage many could live on? Then the notion of geography comes into play – $15hr in New York City is not the same as it is in Peoria, Illinois. Simply put, if you pay enough, the jobs will get filled – but they are not, which gives a clear indication of what these jobs really are.
Inflation is tax – learn more here. Everybody was thrilled to get stimulus checks in the mail during the COVID-19 pandemic. “It’s free money!” many exclaimed. But nothing in life is free. This includes “free” things handed out by the government. According to estimates by Bloomberg Economics, US households will spend $5,200 more this year than they did last year on the same consumption basket. That breaks down to $433 extra in expenditures every single month.
Our elite leaders, via government manipulations of the free market, are ensuring our futures become bleak. Unfortunately, there are still many that believe in these charlatans. Regardless of the political party you may ascribe to – many are coming to understand. It is measured well in the consumer confidence reports.
Remember, back in the age of kings and queens. We had full employment too – we were called serfs and peasants – worse yet, slaves. Is this in our future?
It doesn’t have to be this way. We need true patriots to wake up and begin to take a stand against what our elites and politicians are trying to do to us. And by ” take a stand” it should be implied by legally and peacefully ways to redress our government. We are getting close to the point of no return. Time is of the essence.
By Tom Williams at Right Wire Report
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Federalreserve, Public domain, via Wikimedia Commons