CTH puts released economic data into ‘what does it mean‘ terms as a conversational priority.  The Bureau of Labor and Statistics (BLS) releases the first quarter productivity and costs report today [BLS Data Here].

Outputs, what was created, dropped 2.4 percent, yet labor hours used to create those outputs increased 5.5 percent.   This creates a productivity drop of 7.5% for the overall business.  The largest quarterly drop in productivity since 1947.

This is a warning indicator inside the economy to employees of large organizations.  CTH has been tracking productivity for quite a while, and the signs have all looked foreboding. {Go Deep}   Businesses cannot afford to keep employees on payroll if customer demand drops.

The per unit labor cost to make the products has increased 11.6%.   Wages have gone up 3.2% (pay increases) and productivity has dropped 7.5%, combined that creates the 11.6% increase in per unit cost to producers.

I have often used the example of making bread {Go Deep}.  If you are making 10 loaves of bread, there is a set amount of cost associated with each loaf created.  The total cost of each loaf is the total cost to produce the entire batch divided by ten.

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CNN conducted another poll to evaluate voter trends [pdf data here].  The results show a significant drop in American opinion of the economy with 77% rating the current status as “poor,” and 23% saying it’s “good.”  Additionally, 66% of people polled disapprove of the way Biden is handling the economy.

As CNN painfully noted: “Even within the Democratic Party, just 7 in 10 approve of Biden on the economy (71%) and helping the middle class (71%), considerably lower than the 86% of Democrats who approve of his performance overall. Fewer than half of Democrats say Biden has improved the nation’s economic standing (45%), down from 58% in December.” (article link)

In the video discussion, CNN Political Director David Chalian is just gobsmacked, stunned and amazed that 63% of these people are saying they are buying fewer groceries because stuff is just too expensive. WATCH:

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Whenever voters put democrats in charge of the economy, it just sucks.

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As expected, the Federal Reserve has raised interest rates .50%.  However, inflation is expected to remain high as prior spending debt bubble remains in place.

WASHINGTON, May 4 (Reuters) – The Federal Reserve on Wednesday raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and the U.S. central bank’s chief made an appeal to Americans struggling with high inflation to be patient while officials take the hard measures to bring it under control. (read more)

Within hours of the announcement, major U.S. banks including JPMorgan Chase & Co, Wells Fargo Bank and Citibank raised their prime rate to 4%, effective Thursday.

The timing of the rate increase is what was expected.  Last year’s inflation spikes started appearing in June of 2021.  By delaying the 2022 FED response until right now, the political operatives in control of U.S. monetary policy create a scenario where the Fed impact will appear to surface in June of 2022. Exactly one year from the date of the first wave of inflation from the prior COVID spend.

Year-over-year inflation will statistically begin to give the appearance of moderation, once the June (’21) to June (’22) comparison cycle arrives.  The Fed and White House will use the intentionally timed statistical outcome to claim inflation is diminishing.  It’s a political trick we expected.

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Defying threats from the European Union, Hungary has announced they will not stop purchasing oil and gas from Russia and join a blockade of energy products by the 27 member EU alliance.

Joe Biden has asked congress for two supplemental spending packages, $33 billion for the Ukraine/NATO money laundering operation (supported by both wings of the DC UniParty), and an additional $22 billion to deal with COVID, ie the money DC will use to send to states for another round of mail-in ballots for the November mid-terms.

Hillary Clinton’s former Vice-Presidential running mate, Virginia Senator Tim Kaine, appeared on CBS Face the Nation to discuss.  As noted by Senator Kaine, the Senate will happily authorize the $33 billion for Ukraine; however, the COVID spending bill will more likely run into resistance from the Republicans in the Senate who want to extract some of their own Wall Street priorities.

The forward-looking solution, as it appears from the Kaine perspective, is for Mitch McConnell and Chuck Schumer to work out a deal where both spending packages are bundled. This approach gives cover to the DeceptiCon wing of the republicans to support the COVID mail-in ballot funding scheme, in order to keep their UniParty proxy war in Ukraine fully funded.  WATCH:

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Despite warnings from their ideological fellow travelers and defenders in the U.S media, the Biden administration refuses to turn away from the insanely destructive policies.  The working class of America are responding to the disconnect by rejecting Democrats.

More voters are recognizing the Biden policy agenda is specifically intended to harm Americans and tear down the core U.S. social, cultural and economic systems that led to prosperity for your nation. NBC looks at the scale of the divide that leftist policies have created. Non-urban voters are fleeing away from the democrat party creating a massive cleaving between rural and urban voters. WATCH:

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Unfortunately, the installation of Joe Biden was intended for exactly this purpose.  Biden is considered a disposable tool by the people behind the administration.  Biden was specifically selected for his value as a pliable and disposable political figurehead, put in place for one term of massive intentional harm without concern for political consequence.  It is a feature, not a flaw.

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The defender and protector of leftist politics, CNN’s Chris Cillizza, is having a meltdown over the 2022 mid-term prospects for Democrats, calling the economic situation “disastrous for Democrats’ 2022 chances.”

Cillizza is referencing the cumulative effect of high inflation, high gas prices, a negative GDP outcome for the first quarter, and now the latest Gallup polling data:

In the latest Gallup poll, conducted April 1-19, four in five U.S. adults rate current economic conditions in the country as only fair (38%) or poor (42%), with few describing conditions as excellent (2%) or good (18%). Furthermore, 76% of Americans say the economy is getting worse, 20% say it is improving, and 3% think it is staying the same. (read more)

As CNN shares, “if things stay roughly where they are today — in terms of economic measures like GDP and CPI and Americans’ perceptions of the state of the economy — Democrats will experience a cataclysm at the ballot box this fall. The question won’t be whether they hold their paper-thin majorities in the House and Senate, but rather how big the electoral hole will be that they have to try to dig out from over the coming decade.” (link)

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This is an update to an ongoing issue we started seriously discussing last October when it became clear that if the trajectory was followed, “the absence of food will change things.”

The International Monetary Fund (IMF) is continuing to send warnings with increased urgency about the very real possibility of widespread food shortages in regions where food instability is a historic issue. [SEE HERE]

“The war in Ukraine has triggered a sharp increase in energy and food prices that could undermine food security in the region, raise poverty rates, worsen income inequality, and possibly lead to social unrest,” the Fund said in its annual Regional Outlook for Africa.”

This is a recent warning around a topic that has increasingly gained international attention.  Indeed, experts in multiple related agricultural fields have openly started to discuss and predict a looming crisis as the majority of the global food supply is contingent on only one or two growing cycles per year for harvest.  Those harvests are facing multiple headwinds that could likely result in lower yields.

Against this backdrop we can be certain that all nation’s government interests are taking this issue seriously.  Now, we are starting to see a race for supply control by various governments.

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For his weekly monologue today, GBNews host Neil Oliver notes how government officials are now globally focused on stupid personality issues as a distraction from the complete mess they created.  Ironically, I just watched a Canadian parliamentary session yesterday where the most urgent policy for their assembly was ‘menstrual equity.’  Yes, you read that correctly.  It left me with that same bread and circuses thought as outlined by Oliver today.

Political leaders, not just in the U.K., are snipping and snarking at each other over the most ridiculous issues and personality points.  Do we really care about what kind of car the energy secretary drives and the hypocrisy it may represent?  Is there a purpose to the insufferable banality of it?  Indeed, they want us to move along, move past the issues they created with the pandemic nonsense.

They need us to participate in the great new pretense where consequences are inconsequential, discussion is disinformation.  We are to listen to their square dance music and participate gleefully, while pretending our economic barn isn’t burning down around us.  As the flames spread, we are supposed to ignore and forget the gasoline drums the politicians placed in the loft and just keep dancing….  However, most of us normal folk can’t ignore that it’s getting really hot in here.  WATCH:

(TRANSCRIPT) – “We need some grown-ups in the room – and pronto. As things stand in this country, right this moment, we’re being governed by what appear to be outsized school children intent only on picking fights with one another in the playground, calling each other names.

As far as anyone can tell, the party of government and those of the opposition are interested only in themselves and each other. Life in a goldfish bowl has apparently given them five-minute memory spans. Round and round they swim, seeing nothing beyond the glass and having the same tiny fights with their fellow inmates again, and again, and again.

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The Bureau of Economic Analysis (BEA) released March and first quarter (Q1) data today on personal income and outlays [DATA HERE].  The results show an increase in Q1 wages of 4.5%. However, inflation is running 6.6% on the items workers need to purchase.  The net result on Main Street is unsustainable inside the economy.  The U.S. stock market is responding negatively to this release.

It’s easy to get caught up in the esoteric weeds, so my effort here is to show just what is happening by putting an overlay of checkbook economics into the BEA release.  If we take out the noise it is very easy to see the problem.  I have modified TABLE-4 to put the results into simple understandable terms.

(Table 4, Source)

By looking at the far-right column (Q1 2022) you can see the problem.  Wage growth at $268.00, minus taxes paid $51.40, leaves disposable income or take-home pay at $216.60.  However, our expenses for living (shelter, food, utilities, energy, etc) cost $398.50, leaving a deficit for our income of $181.90.  We either dip into our savings to cover our expenses, or we go into debt.  This is not sustainable.

If you look at Q1 last year, you can clearly see where all of the inflation is coming from.  That massive increase in income came from the federal COVID bailout and stimulus funds.  $4 trillion directly pumped into the economy at a time when Biden justified massive bailout spending by saying they needed to offset the economic cost of prior COVID intervention (businesses and workers shut down).  That is the primary source of current inflation.

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