Inflation is high, but the USD is crushing every other currency. American businesses are fed up with shutdowns and shipping delays from Asia, and are willing to pay the price premium for domestic goods. And the federal government is doing (I think) a good job at pushing industries to capitalize on the global weakness.
Do you see industrial and manufacturing jobs as a major percentage here?
That is what a strong currency does.
Unless forced to manufacture here (like say defense and space industry), the low salaries elsewhere and already existing vertical and horizontal integration make for an insurmountable advantage forever.
This is exactly what's happening. Companies realize that they don't have any influence or visibility into overseas production in places like China. That labor savings doesn't mean much when you're not allowed to actually make things, or when your goods get stuck in shipping for months on end.
Its still blessed land - wildly fertile and rich with resources. Any real security threat is an ocean away. It doesn’t even need to venture out much now to secure energy.
People talk about moving to New Zealand in an apocalypse, but honestly you’d do very well in the US if the rest of the world was going to hell.
International-Relations-wise the US is positioned to retain her monopolar status and then cement it for the century by 2030. The two greatest competitors to her rule were Russia and China. All other powers are strong allies of the US and have no reason to change that.
As we've seen, McCain's quip turned out to be true, the bear is nothing but a mafia in a run-down gas-station. The only other real competitor is China, and without Taiwan's fabs, China can't compete this century. Whole new fields of industry must be created for the dragon to take a shot for a bipolar world.
That the US managed to convince Taiwan to lessen it's grip on that security guarantee (with the Texas fabs okayed recently) shows how much Taiwan thinks the US can win any conflict with the mainland. They aren't scared in the least.
Russia's ongoing disaster only strengthens that feeling, as any invasion, already an operation on never heard of scale, would involve the actual US military. That Russia somehow allows NATO to fight openly against her with the airgap of a Ukrainian finger on the trigger shows how outmatched the bear is. It's basically a weapons test for NATO at this point, much to Ukraine's detriment. China can only guess at how poorly the invasion would go and how bungled it would be. Combined with crushing blockades and sanctions, and she knows any move would kill her economy for decades. Their clock is not ticking, it ran out. The only question is if Beijing knows it.
So yes, I think it is good to be in the US or allied with her.
That's not the Fed’s goal. Yes, tight monetary policy generally weakens labor leverage, but the target is inflation. If inflation comes down and unionization continues (which is not implausible, if non-labor price drivers like oil keep dropping), the Fed will almost certainly back of the brake lever notwithstanding the continued labor organizing drives.
It would be, but I didn't even approximately do that. In fact, what I said depends on pretty much the opposite, the two being largely independent of each other.
More than double, yes.
> It also means that the Fed isn't going to taper off rate hikes anytime soon.
Well, maybe. But there's at least one more jobs report before the late September FOMC meeting, and it could be just as far off expectations in the other direction. Economic indicators have generally been wonky recently.
And jobs aren't the only factor in monetary policy. Strong jobs but monthly inflation tapering faster than expected could still lead to the Fed easing up on the brakes.
Perhaps individuals and families are having to do more work to try to climb out of an inflation hole. New jobs are good. 2nd, 3rd and 4th jobs in families to defeat that missing 4% is sub-optimal job growth due to a variety of trade-offs.
Perhaps people at the bottom are positive and people above are net negative, i.e. reduction of income/wealth gap.
It is possible the 0% to 20% or even 30% are experiencing gains, while 30% to 60% are not.
It is hard or impossible to find data by income/wealth decile, and the corresponding change in prices (inflation) of that income/wealth decile's basket of goods.'
For example, the people that work in retail/hotel/travel/etc sector that typically employs the lowest paid employees with the worst quality of life at work may very well be experiencing huge gains, although not all captured by wage data, such as better quality of life at work due to not having to work late weeknights or weekends, etc.
It is a difficult thing to capture in numbers.
At the same time though long-term commodities inflation is cyclical, while wage inflation tends to be sticky. If wage inflation actually causes raises in wages for working class people and isn't just contained to SWEs then long-term this is likely beneficial and would lower disparity in the long run. But this would take a decade of wage-price inflation. Short term it is a regressive tax.
But the Fed is trying to go back to the conditions of the past 40 years where wage inflation has been capped at around 2% which will just squeeze the lower classes even more.
I mean, this is a question of policy. The US Federal Government mandates that crops be burned as fuel, which hugely pushes up the price of corn and in turn that pushes up the price of other things that could be grown using that land. We don't explicitly buy up and destroy crops anymore, or pay farmers not to grow them, but the food supply is being deliberately contracted as a matter of federal policy to keep farming profits high.
It seems bonkers to say that there's nothing we could do about rising food prices when we're literally paying to (from the perspective of the food supply) destroy food and keep it scarce.
Why would this always have to be true? For example, if the supply of labor sellers at the bottom decreases due to decreasing birthrates, immigration, or people who are no longer employable due to drug addiction. It seems conceivable to me that the lowest paying jobs would have to contend with decreasing supply of labor by increasing the pay.
Perhaps the increased pay then causes increased prices for goods/services which then cause sufficient decrease in aggregate demand that demand for the labor then starts decreasing so it pushes wages at the bottom back down , but I do no see why that has to be case.