Powell is willfully blind to the fact that inflation has peaked, and has no idea why.
What you're not hearing about the August jobs report: painful enough for Powell?
Friday, September 2, 2022
Will rising unemployment, moderating wages, declining hours worked, and an expanding labor force satisfy our dungeon master?
Update to Strategic View
Today's August jobs report showed the second weakest payroll growth this year, and a substantial uptick in the unemployment rate. It beat consensus expectations only thanks to revisions of prior months. The unemployment rate increased because the number of unemployed persons expanded by the most in 29 months, at the same time as the labor force expanded robustly. This not only shows the higher level of unemployment that Powell perversely wants, but also that what he calls the "overtight" labor force can grow to meet those unfilled job openings he always mentions. African American and Hispanic unemployment rates rose even more than for whites. Average hourly earnings fell to the lowest in 6 months; hours worked fell; the monthly job-finding probability fell. With the certainty of August CPI reporting as the second-in-row month of outright headline deflation, and with this soggy jobs report, there is no way the September FOMC raises the funds rate by 75 bp.