"Mandate Entanglement" -- What A Great Country When The Fed's Mandate Is "No More Jobs" -- Sort Of Like "No More Drilling" -- Such Unprecedented Riches -- January 5, 2023

This is not a criticism, it's not a political comment, it's just an observation.

The Fed has a dual mandate.

Using a term from quantum theory: entanglement. 

Particle theory.

So, here, JPow and the Fed has two "entangled mandates": jobs and inflation.

Inflation is "something" with which "we" definitely need to be concerned.

But.

In my entire adult life, beginning when I was in high school, without exception until recently, there has always been a concern by high school students, college graduates, and young adults entering the workforce, and then some decades ago, women entering the workforce in large numbers, about the unemployment rate and the strength or weakness of the job market, and whether everyone who wanted a job could find one. 

There were many, many summers during my high school years and college years when it was almost impossible to find a job. After joining the military I never had that concern again, but I remember reading newspaper articles almost every spring about the job prospects for new college graduates. More often than not, it was often a grim picture. 

Now, for the first time in my adult life -- fifty-five years? -- we have a "Fed" that is actively trying to destroy the job market, drive the unemployment rate higher, and Wall Street takes a tumble when the Fed's policy fails to result in more lost jobs, higher unemployment.

Truly amazing. 

Good, bad, or indifferent, that's how I'm reading it. What a great country. This country is doing so well, it's government is actually trying to "kill" the economy and "kill" jobs. 

"Kill" may be hyperbolic but that was the first word that came to mind.

From earlier:

Data points:

• Dow down 400 points after jobs report;
• JPow telegraphed no rate decrease in 2023;
• he most likely had job data at time of his statement

From CNBC:

• ADP: jobs added in December, 2022: 235,000
• forecast: 150,000 new jobs; a huge miss;
• November numbers unrevised; 127,000 jobs added
• questions: adjusted? seasonal hires? offset anticipated job losses in 2023?
• if this is not seasonal but similar numbers hold through 2023, it suggests exactly how much "free money" and fear of Covid kept folks from returning to work 
• fear of Covid keeping folks from returning to work much less a factor than "free money"
  
• weekly jobless claims, also came in less than expectations
• JOLTS: job market remained strong

Note: from Reuters:

The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the Labor Department's Bureau of Labor Statistics' more comprehensive and closely watched employment report for December on Friday. It has been a poor predictor of private payrolls in the BLS employment report.

Jobless claims:

• 204,000
• a drop of 19,000
• from The Washington Examiner:

While the number of new jobless claims has remained low enough to avert fear that the country is already in the throes of a recession, most economists anticipate that the U.S. economy will enter a Fed-induced recession at some point in the new year. That is because rate hikes can take a while to filter through the broader economy and create recessionary conditions and job losses.

It is expected that as the rate hikes begin to ripple across the economy, jobless claims begin to tick up, and then monthly jobs reports will begin to turn negative.