Inflation/stagflation Thread

Alright. I’m one of them, then. The comment above says:

In other words, “strong employment growth” for American citizens, always was and remains a fabulation, and the only job growth in the US is for illegals, who will work for below minimum wage, which also explains why inflation hasn’t spiked in the past year as millions of illegals were hired.

Came here as a student, then H1B which was needed to get a job. However, to get the H1B my employer had to apply and inform the government of salary as it had to be at least the average going rate to be approved. That was to ensure H1B people didn’t get jobs because they were paid less.

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That seems to be their starting point. Looking at some known job losses from some chains closing, and extrapolating these to the whole state. Like you said, probably some real job losses but the figure definitely looks more uncertain than they make it sound. Should be obvious pretty soon once these workers report to the CA unemployment agency.

Same exact path here. Foreign born, Ph.D student then H1B, then permanent resident, then naturalized American years ago. I was legally in the US the whole time but was foreign born the whole time as well.

IMO the chart is not saying what the authors think it does. It shows that we “import” foreign-born workers with the skill sets that local workers do not have. Like mentioned by harish, the H1B and permanent residency process is not simple or cheap. If employers could find the same American born workers for their job openings, they would. Attorney fees for my employment were over $15k total (which the company paid).

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Poor US born native workers!

May CPI came in quite friendly, 0% for the headline CPI and only 0.2% for May for Core CPI (~2.4% annualized for the Core part).

  • U.S CPI (MOM) (MAY) ACTUAL: 0.0% VS 0.3% PREVIOUS, EST 0.1%
  • U.S CORE CPI (MOM) (MAY) ACTUAL: 0.2% VS 0.3% PREVIOUS; EST 0.3%
  • U.S CPI (YOY) (MAY) ACTUAL: 3.3% VS 3.4% PREVIOUS; EST 3.4%
  • U.S CORE CPI (YOY) (MAY) ACTUAL: 3.4% VS 3.6% PREVIOUS; EST 3.5%

market reaction

  • U.S. SHORT-TERM INTEREST-RATE FUTURES JUMP AFTER INFLATION DATA; TRADERS PRICE IN BIGGER CHANCE OF FED RATE CUTS
  • U.S. INTEREST-RATE FUTURES NOW IMPLY ABOUT 70% CHANCE OF A FED RATE CUT BY SEPT
  • FED SWAPS FULLY PRICE IN QUARTER-POINT RATE CUT IN NOVEMBER
  • FED SWAPS RESUME FULLY PRICING IN TWO 25BP RATE CUTS IN 2024
  • U.S. STOCK INDEX FUTURES EXTEND GAINS AFTER MAY CPI DATA
  • GOLD GAINS AFTER US MAY CPI UNEXPECTEDLY SLOWS

commentary

  • FED: INFLATION HAS EASED OVER THE PAST YEAR BUT REMAINS ELEVATED
  • FED: DOES NOT EXPECT IT WILL BE APPROPRIATE TO REDUCE POLICY TARGET RANGE UNTIL GAINING GREATER CONFIDENCE INFLATION IS MOVING SUSTAINABLY TOWARD 2%.
  • FED PROJECTIONS SHOW 4 OF 19 OFFICIALS SAW NO RATE CUT IN 2024; 7 SAW 1 CUT; 8 SAW 2 CUTS.
  • FED OFFICIALS’ MEDIAN VIEW OF FED FUNDS RATE AT END-2024 5.1% (PREV 4.6%).
  • FED OFFICIALS’ MEDIAN VIEW OF FED FUNDS RATE IN LONGER RUN 2.8% (PREV 2.6%).
  • FED PROJECTIONS IMPLY 25 BPS OF RATE CUTS IN 2024 FROM CURRENT LEVEL, ANOTHER 100 BPS IN 2025.
  • FED: THE ECONOMY CONTINUES TO EXPAND AT SOLID PACE, JOB GAINS REMAIN STRONG, UNEMPLOYMENT RATE REMAINS LOW.
  • FED: VOTE IN FAVOR OF POLICY WAS UNANIMOUS.
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Fed anticipates only one rate cut this year…

I do not know whether the end of the petrodollar agreement with Saudi Arabia is significant or not. This article goes to ridiculous lengths to downplay it.

https://www.marketwatch.com/story/reports-of-the-petrodollar-systems-demise-are-fake-news-heres-why-4e712804

For example they say it was never in force because for a few months after it was signed (50 years ago) the Saudis accepted UK pounds.

The end of the agreement seems like bigger news according to this article