Hard to say we are truly in a recession when you are adding like 6 months of Donald Trump jobs production bragging in a single month. Economy is overheated but a lot of this is sthe result of the usual GOP massive deficit creation under Trump and the mind boggling giving away free money to millionaires even if they did not need it as the FIRST financial action of the pandemic. I know a guys whose company never wavered, and did better, he put close to $1.2 million in his pocket, without any need at all.
A good analogy now to what the economy is doing is sort of like trying to see Bruce Springsteen and Tickemaster's dynamic pricing. The ticket says $50, but the demand says the ticket is now worth $250. You could say fuck it, but you haven't been to a concert in forever, and you pull the trigger because damnit you want it! Now gasoline is different, but that's largely the result of letting Russia and Saudi Arabia pump like crazy during the prior administration destroying the fracking industry. It was a smart play that made both the Saudi's and Russian's a shit ton of money when the supply tightened after our production went offline. But now the market is adjusting and consumption is being reduced from folks combining errands or other reduction of fuel use. So prices are falling even though production is only marginally increasing. Fuel was the single biggest driver of inflation this past year. And still probably is today even with the price falling it's still a buck more that a year ago. I sort of feel like the folks hurting the most are starting to say no, to those Springsteen tickets.
Right now I think we have a decent opportunity to have a very mild recession. The reason I say this, is that I am beginning to see a LOT more inventory on the shelves at retailers. Now that's not going to decrease meat and produce because of the semi-monopoly nature of those industries from the processing side. But retailers and manufacturers are going to move the product on the shelves, and discounting price is how things ultimately are moved off the shelves. OR... layoff and shutdowns if they do not move. I think the supply chain woes will result in too much inventory as things smooth out. Real estate is already soft from interest rates pushing price and price reduction is around the corner if you want to move a house. The dichotomy of rising first time employment filings rising and the employment numbers skyrocketing is interesting to be sure. But folks who had covid check savlngs and seen that money evaporate, so they need work. Some industries are laying off Real Estate related for sure. But retail and hospitality is still desperate for workers. I am also now seeing more sales in the weekly grocery flyers. Where 4 months about only 5 or 6 items were truly "on sale."
Fed may pop a full percent, but I am more worried about them overshooting on the rate increases than anything at this point. The lack of a coherent immigration policy also hurts us, especially on food price inflation. But that's another story