Thursday, July 14, 2016

Inflation picking up. Wage pressures mounting.

I have been saying that wage pressures are mounting. The evidence is clear. In my MMT Trader report I have included this chart below.


This is the current. up-to-date, snapshot on Employment and Withholding Tax Deposits flowing to the Treasury. It is accelerating. This is an indication of mounting wage pressures and a significant tightening in the labor market.

Producer prices up 0.5% in today's report. Forecasts were for a 0.3% rise. Tomorrow, CPI and that will be a shocker, too.

Treasuries are a sale. Fed will resume rate hikes soon.

Dollar going down. Commodities, gold, stocks, emerging markets, all going up. That's where you want to be.


Dave @ RockyMountainPerspective said...

A comment in response to this article's appearance on Real Money's news feed came from a contributor posting under the moniker Steele. His dismissal of the numbers as propaganda was based on immigrants taking a disproportionate share of jobs added to the U.S. economy under the current Administration. I'd like to offer key Department of Labor figures in support of Steele's premise which show how and why the economy still hasn't turned for tens of millions of Americans.

Know how many jobs have gone to newcomers since January 2009, across Obama's 90 months in Office?

The Bureau of Labor Statistics (BLS) shows 5,718,000 more Hispanics employed and 4,761,000 more foreign born newcomers having filled modest numbers of jobs available through June 2016 in the Obama Administration's next in succession summer of recovery. By comparison, it wasn't until February of this year that white Caucasian Americans topped a million jobs gained from the baseline in place at Obama's inauguration.

Is there anyone who doesn't get that the quality of jobs matters?

Let's look at a few more Labor Department statistics through the first half of 2016.
It's probably worth noting the real, not seasonally adjusted count of new job loss claimants last week first. Rather than holding steady, the seasonally adjusted 254,000 estimate actually vaulted 31,425 all the way to 298,862 on unemployment claims filed for the week ended Saturday, July 9. Not exactly what articles posting spin from Obama's appointees at the Labor Department are reporting is it?

A week earlier, job loss claims increased by 3,714, while a seemingly impressive seasonally adjusted figure dropped 16,000 to 254,000. Keep in mind, through July 9, 2016, the actual number of job loss claimants stands at 7,758,479 for the year, and the cumulative seasonally adjusted figure seven-and-a-half years into Obama's mythical robe-spun-of-gold recovery reached 149,132,000. The 149.1 million represents about 112% of the 133,886,830 recognizably employed Americans according to employers' payroll records gathered by the Employment & Training Administration for the Department of Labor.

While job loss claims have fallen modestly ever since Thomas
Perez took over as Labor Department Secretary, what's not reported is job hiring has mostly matched the pace of job loss claims, falling to a millennium low 17,260,464 in 2015. This year is on pace to come up nearly a million-and-a-half fewer, and is set to approach, but not exceed, 16 million actual job hires.

What kind of jobs make up the bulk of jobs added this year?

Through the first half of 2016, teens age 16 to 19 have gained by far and away the most jobs at 1,058,000. The next most successful demographic for jobs gained by age was the 20-24 year-old classification with 750,000 over six months. While seniors 65 and over dominated the three-month period from March through the end of May at 489,000, they're in fourth place for the year thus far, trailing the nation's youth at 394,000 jobs gained. Collectively, teens and super seniors have gained more than the total number of jobs added for 2016 at 1,454,000.

Obviously, those jobs going to school-age youth and seniors are very different from breadwinner jobs. And there's a perverse sort of side benefit for an Administration claiming recovery based upon job loss claims registered at employment offices nationwide. Almost none of the youth ages 16-21 are eligible for unemployment, because taking education classes disqualifies potential registrants for benefits once their job ends. Likewise, few seniors who are supplementing whatever retirement income they have file for unemployment, so virtually all jobs added through 2016 so far won't be counted against the job loss claimant numbers when seasonal, temporary and part-time jobs come to an end.

Think those who've gained jobs in the Obama economy and the quality of jobs doesn't impact figures like job loss claims counted by the ETA? Think again!

Michael Norman said...

Okay, Mousey Boy.

Matt Franko said...

Dave what does any of that matter to the USD system?

MRW said...

Mike, I don’t see the year-over-year on that chart.

The *Withheld Income and Employment Taxes* on the Daily Treasury Statement for the end of June 2016 is almost exactly the same as June 30 last year (2015). And both are only $10 billion over June 30, 2014.

What am I missing?


Classification Today month to date year to date [in millions]

JUNE 30, 2016
Withheld Income and Employment Taxes $ 4,920 $180,616 $1,726,339

JUNE 30, 2015
Withheld Income and Employment Taxes $ 4,314 $180,040 $1,663,724

JUNE 30, 2014
Withheld Income and Employment Taxes $ 14,268 $170,656 $1,577,451


MRW said...


Classification-----------------------------Today-----month to date---year to date [in millions]

Matt Franko said...

MRW ytd here 8th statement-day of July:

Table IV

ytd: 1809 vs 1732 (fy 2015) on the withholding employment taxes...

Corporate receipts down by about 30B with the oil patch write downs...

MRW said...


Sorry didn’t get back to this thread until now. Busy day.

(1) So. I should be counting “statement days” not go by date? That’s interesting.

(2) I see what you mean--ytd: 1809 vs 1732 (fy 2015)--but that doesn't clear up my confusion about what Mike means as a jump at the end of the third quarter in the month of June (a tax year for foreign accounts and some foreign companies operating in US; also June 15 is two months after April 15 and a tax deadline for those who needed more time to pay. There’s always a jump in June.)

(3) The inflows for the month of June are the same for both years. They don’t count? Then why is Mike saying the June jump this year is significant? I’m not understanding. I’m really confused.

Matt Franko said...


I'm not sure perhaps send Mike an email here:


He updates his figures daily so he might be looking at ytd figures for the day in question not quarterly ex post....

Leading flows are up YoY by about 100B so we should see some increase in the taxes as per MMT "govt spends FIRST and THEN collects the taxes..."

MRW said...

Matt, check this out:

from this page which has the daily and weekly