Wisconsin jobs at all-time high, unemployment an all-time low.

I keep thinking Wisconsin will see its job growth hit a wall, especially given the sub-3% unemployment rate in the state. But that didn’t happen in February, as jobs keep getting added, and unemployment went down to its lowest level yet.

The Department of Workforce Development (DWD) [on Thursday] released the U.S. Bureau of Labor Statistics (BLS) preliminary employment estimates for the month of February 2023, which showed Wisconsin's seasonally adjusted unemployment rate dropped to a record low of 2.7%.

In addition, total seasonally adjusted nonfarm jobs increased 7,500 over the month of February and 50,300 year-over-year to hit a new record high of 2,997,400. The total jobs number puts the state 3,400 jobs above pre-COVID-19 peaks.

That’s great to hear, especially following recent reports of increased layoffs being announced by state companies in 2023 (which I’ll get back to in a bit).

As the report indicates, Wisconsin now has finally passed the pre-COVID job levels slightly more than 3 years after that peak was hit in January 2020.

The record low unemployment rate of 2.7% seems like a big deal as well, especially with more people coming back into the work force last month. Which makes it all the more absurd that Republicans put an advisory referendum about making “able-bodied, childless adults be required to look for work in order to receive taxpayer-funded benefits.” But then again, that symbolic question is not about reality, and is instead a desperate attempt by WisGOPs to stir up dimwitted rubes for the April election with race-baiting BS (doesn’t feel like it’s working well).

That being said, those affected by those recent layoff announcements don’t seem to be losing their jobs until later this Spring, and the snowy, cold March isn’t going to help in starting seasonal work over the coming weeks. So let’s keep an eye out for both factors in the next couple of jobs reports. But perhaps it’s also true that those losing their jobs are quickly finding work to replace those lost jobs, and allowing for Wisconsin’s total job numbers to stay strong.

And let’s also see if we can finally get over 3 million total jobs in the state – a place we’ve never been to, which is pretty amazing given that we were less than 200,000 jobs away from that when 2000 began.

Fed raises again, but that's not why the market tanked this afternoon

When the Federal Reserve Open Markets Committee held their meeting this week, I figured that Chair Jerome Powell and company wouldn't back off of their rate hiking trend, even with recent instability at banks and with inflation clearly slowing down. And I was right about that, but the Fed's statement also led to lower rates on the bond market.

On the Fed's overall interest rate projections, little changed overall. But it is an odd combination of "higher rates for longer" but mixed with the idea that economic growth would slow down, and that 2024 allowing for rate cuts as price growth settles back down.

Federal Reserve 'dot plot' shows interest rates peaking at 5.1% in 2023 https://t.co/V71uSfx9kf
by @alliecanal8193 pic.twitter.com/OkQQXkfp4o

— Yahoo Finance (@YahooFinance) March 22, 2023

And if you watched the CNBC video, you'll notice that stocks also ticked up a bit after thre Fed's decision and Chairman Powell's press conference, as they figured things were steady enough, and only one more rate hike was priced in.

But then something else happened after Powell spoke.

Dow Jones fell down 500+ points in the last one hour trading session. pic.twitter.com/jsSRNdXCGS

— Asif Momin (@Asifmominblr) March 22, 2023

And that something came in statements US Treasury Secretary Janet Yellen gave to a Senate committee, indicating that the Biden Administration would not bail out all bank depositors on their alone.

Some banking groups have urged the Biden administration and the Federal Deposit Insurance Corp (FDIC) to temporarily guarantee all U.S. bank deposits, a move they say will help quell a crisis of confidence after the failure of Silicon Valley Bank and Signature Bank.

Reuters reported on Tuesday that government officials discussed the idea of raising the $250,000 insurance limit per depositor without congressional approval following the SVB and Signature closures.

Yellen said she believed it was "worthwhile" for Congress to look at changes to FDIC deposit insurance, but declined to say what changes she thought were warranted.

But when asked whether insuring all U.S. deposits required congressional approval, Yellen said she was not considering such a move and was reviewing banking risks on a case-by-case basis.

"I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits," she said.

And Wall Street threw a tantrum, causing the big losses.

For the record, I think that the $250,000 limits of FDIC insurance are probably outdated, and I think it would be a great idea for Congress to raise the fees banks pay to the Treasury in order to raise those limits. Which seems to be what they are going to try to do.

Senate Banking Committee chair @SenSherrodBrown⁩ says prospects are improving for legislation lifting the Federal Deposit Insurance Corp. cap, as senators discuss ideas ahead of a hearing on the failures of Silicon Valley Bank and Signature Bank. https://t.co/oNuab5JtUt

— Scott Suttell (@ssuttell) March 22, 2023

"There seems to be more commonality about what to do with FDIC than there was four or five days ago," the Cleveland Democrat told reporters Tuesday evening, March 21. "By our hearing next week, we may have some clarifying thoughts that there can be some consensus."

The Banking Committee is scheduled to hear from FDIC chair Martin Gruenberg, Fed vice chair for supervision Michael Barr and Nellie Liang, the Treasury undersecretary for domestic finance.....

"We'll examine deposit insurance coverage issues. We'll look at the role of social media. We'll consider legislation to strengthen guardrails and I'll continue pressing regulators to do a full review of those two bank failures and what is happening across the country," Brown said. "I think we could find some bipartisan solutions, perhaps on FDIC changes."

Brown said Tuesday that proposals include raising the insurance cap, eliminating the cap permanently or temporarily, and creating a different insurance category for businesses. The brunt of any additional costs would have to be paid for "by the big guys," Brown said, meaning larger banks and larger depositors.

But Wall Streeters want their bailout now, dammit! And to keep their low-rate coacine party as soon as they can.

While I also think rates are too high, my reasons are because the Fed shouldn't stop what's a very good economy in the real America, and inflation has been on the wane for 8 months, to the point that real short-term rates are very high these days. I would hope the Fed goes on pause with its next meeting in May, particularly as oil prices have fallen to their lowest levels since 2021, and as food prices are finally moderating.

To me, it's more important to keep the strong jobs market rolling along than in caring whether inflation is at 2% or 4%. Especially when interest rates are now at 5%

Wisconsin layoffs rising in early 2023, but also lots of hiring and job openings.

What's this from Wisconsin Public Radio? "Wisconsin layoff notices up"? And "possible economic slowdown"?

Over the first two and a half months of 2023, the Wisconsin Department of Workforce Development has seen an increase in layoff notices compared to the same period last year.

So far, 1,963 workers have been affected this year. That’s more than half of the 3,821 total employees affected by layoffs in all of 2022.

But the most recent unemployment data shows Wisconsin’s unemployment rate remained low at 2.9 percent in January — better than the 3.4 percent national rate that month — according to state Department of Workforce Development, or DWD.

That seems like a big deal, and it’s within 10% of the total number of people involved in layoff notices for all of 2021. The rate of layoffs in 2023 is more in line with what we saw in the pre-pandemic year of 2019, when more than 8,500 workers were affected (granted, over ¼ of 2019’s layoffs came from Wisconsin-based Shopko, which went belly-up that year and closed all of its department stores).

However, I also see some caveats with the 2023 layoff numbers. Nearly 1/5 of the losses are duet to Marshfield Clinic transitioning 377 workers to its Family Health Center spinoff, which starts on April 1 with no net jobs lost in the process. That’s not to say that Marshfield Clinic is doing fine, as it recently announced that 222 of its workers will lose their jobs in May across several locations in the state.

Similarly, even though Yellow Corp. is closing their freight terminal on the South Side of Milwaukee, the company says it plans to move most (if not all) of those 189 jobs to its other facility in nearby Oak Creek. So while that’s an annoying disruption, it shouldn’t cause much economic damage to workers or the state in general.

But that doesn’t mean there’s nothing to worry about. In addition to the Marshfield Clinic reductions, Hutchinson Technology in Eau Claire says it will lay off more than half of their 425 employees in the coming weeks and months, and triple-digit losses at Briggs and Stratton in Wauwatosa, Hubbell Gas Utility Solutions, and Biery Cheese in Plover are going to hit in March and April.

Of course, if job openings remain high and hiring stays strong in Wisconsin, the higher number of layoffs won’t be as much of a harm. And we know that as of January, Wisconsin’s job market was going very well. The recent state-level JOLTS report says that Wisconsin started off 2023 with the highest level of job openings (as % of total jobs) in the Midwest, and the second-highest rate of hires.

Given that our main jobs issue in Wisconsin has been a lack of available workers to fill the many needs employers have, any added layoffs later in 2023 would simply balance out the labor market, and might keep things moving without too much disruption.

But let’s check back on the WARN reports in a few weeks, and see if the higher interest rates of 2023 start to bite more. Or if the pressures that were feared at the start of the year turned out to be another false alarm, much like we’ve seen for the incredible continued growth of the job market for the last year in both the US as a whole, and Wisconsin in particular.

2 great references - 1 for the state budget, and 1 for the banks

A couple of large reports dropped last week that feel like great reference points in the coming months.

The first deals with the state budget, as the Wisconsin Legislative Fiscal Bureau has put out their 748=page summary of Governor Evers' budget. You also can click here to narrow in on specific agencies.

As the issues come up, this is a great spot to see in plain language what Governor Evers wants to do, and how much it will cost. It'll cut through a lot of spin and BS and help you understand the larger picture as well as the specific issues involved.

The other item I want to let you know about is PBS Frontline's documentary titled "The Age of Easy Money." It is a great summary of how the Federal Reserve had near-zero interest rates between 2008-2022 and pumped trillions into the economy to try to keep bamks functioning during and after the Great Recession, and to boost the economic recovery. It also touches on the Fed's recent rate-hiking spree, and how this might lead to some of the bank difficulties that we've seen.

Especially since the near-zero interest rates encouraged a whole lot of speculation and borrowing for a lot of fraud business ideas, and now there isn't money available to pay those loans back or for the low-interest debt that the banks bought last year to be worth anything today. And the Frontline report warns that we may not see near-zero interest rates any time soon, which could be a rough adjustment for the businesses and individuals that have come to depend on those low rates.

Less single homes, but a lot more multiplexes in America.

New housing numbers had a big jump in starts, but that's not necessarily what grabbed my eye. February housing and construction data should generally give you pause, since seasonal adjustments are at their highest around that time of year.

But is clear that there has been a shift in the type of homes being constructed in the last year. Since February 2022, the amount of single-unit houses that have been completed have generally drifted downward, but projects with 5 or more housing units has jumped by 72% in the last 12 months listed, driving an overall increase in new units being finished.

And it looks like the same story in the future, as the number of units currently under construction are trending even more toward multi-unit complexes.

It’s worthy to ask what that means for the housing market now and in the near future. It’s already difficult for many Americans to find and/or afford housing after a huge runup in prices in the early 2020s combined with the rise in interest rates that started last year. But if there isn’t a huge amount of inventory coming on of single-family homes, would that limit the price decline that has already started in some markets?

Also, does the trend to large amounts of multi-unit construction mean that renting can come back to being more affordable? Or at least start dominoes where previously-built units become more available as new units come around? God knows a lot of people would welcome that, as this guy’s 2010 candidacy has proven well ahead of its time.

The lesson from bank concerns - you can't trust oligarchs and tech bros

Been busy dealing with the Madness of March over writing and other activities, and the Greatest Annual Sporting Event in America made for a nice escape. But I've certainly noticed what's going on in the financial markets in recent days, given that we just had a week where the DOW Jones was flat overall, but had 300+ point swings within most of the days of that week.

Not really fun to track on a day-to-day basis, and the nerves about some banks getting overextended and failing or needing central banks to shore them up with more money is at least annoying, if not worse.

I'm not overly great at the ins and outs of this type of gambling banking and investment games, . But I will note that it's not just a few tech-related banks on the US coasts having problems, as Credit Suisse reported difficulties late last week.

Credit Suisse confirmed in February that clients had pulled 110 billion Swiss francs ($119 billion) of funds in the fourth quarter while the bank suffered its biggest annual loss of 7.29 billion Swiss francs since the financial crisis. In December, Credit Suisse had tapped investors for 4 billion Swiss francs.

On Wednesday, Saudi National Bank, the bank's top backer, told reporters it could not give more money to the bank as it was constrained by regulatory hurdles, while saying it was happy with the bank's turnaround plan.

Credit Suisse shares have lost more than 75% of their value over the past twelve months.

And now we have reports of Deutsche Bank circling the withered body of Credit Suisse to bail it out and take those accounts.

Likewise, isn't it funny how GOP mega-donor/overall scumbag Peter Thiel led a run on Silicon Valley Bank by telling the companies he invested in to get out of the bank a couple of weeks ago.

Thiel's Founders Fund is thought to have propped up several startups that banked with SVB, which provided banking for nearly half of all US venture-backed startups, per its website. The fund had also called for its startups to withdraw their funds from the bank as well.

Bloomberg reported that VC funds Coatue Management, Union Square Ventures, and Founder Collective had all told their portfolio companies to pull their funds from SVB.

If I was a conspriatorial-type person, I'd almost say that Thiel would be fine with trying to cause chaos in the economy to hurt Joe Biden and grab more power for oligarchs like himself. Especially when former US Labor Secretary Robert Reich reminds us of what Thiel has previously said and done.

Peter Thiel, the billionaire tech financier who is among those leading the charge, once wrote, “I no longer believe that freedom and democracy are compatible.”

Thiel is using his fortune to squelch democracy. He donated $15m to the successful Republican Ohio senatorial primary campaign of JD Vance, who alleges that the 2020 election was stolen and that Biden’s immigration policy has meant “more Democrat voters pouring into this country.”

Thiel has donated at least $10m to the Arizona Republican primary race of Blake Masters, who also claims Trump won the 2020 election and admires Lee Kuan Yew, the authoritarian founder of modern Singapore...

Thiel and his fellow billionaires in the anti-democracy movement don’t want to conserve much of anything – at least not anything that occurred after the 1920s, which includes Social Security, civil rights, and even women’s right to vote. As Thiel wrote:

The 1920s were the last decade in American history during which one could be genuinely optimistic about politics. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women – two constituencies that are notoriously tough for libertarians – have rendered the notion of “capitalist democracy” into an oxymoron.

Remember what happened to the economy at the end of the Gilded 1920s, a time when "real [male] leaders and optimistic job creators" controlled everything? It wasn't good.

Then add in the reality that the Federal Reserve kept interest rates near 0% for 2 years, even as the economy had picked up and the Biden/Dems in charge of DC had put in massive stimulus to bring the country back from its COVID-related doldrums. Tech bros used the rock-bottom interest rates to borrow at ridiculously low levels, and then as their products became less needed as the COVID pandemic faded, and the "optimism" about their "disruptions" didn't work out, they have little money coming in to justify the inflated stock prices.

Which is why I like to look at the S&P price-to-SALES ration to get insight on legitimate stock valuations. And it looks like a deflated Bubble over the last year.

Tech bros, bankers and other "great men" shouldn't be trusted to make things better for the Real America. But here was Donald Trump, all Republicans and too many Dems giving the green light in 2018 to allow for a lot of banks to play faster and looser with the money of depositors, and allowing someone like Peter Thiel to tank these banks with a couple of whisper campaigns and clicks of a mouse.

One Wisconsin Congressman in particular was glad to be seen supporting the changes, right before he skipped town to get paid on the East Coast.

Hey @SeanDuffyWI - I’ve been seeing you
give Trump that dreamy-eyed stare a lot this week.

I’m sure you and your wife are mentioning your support of bank deregulation all over Fox this week. #wiunion #WI07 #wipolitics pic.twitter.com/7g3eDUHXCd

— JakeEdwards (@JakeMadtown) March 15, 2023

But yet central bankers and other connected oligarchs think the big problem in our economy is that everyday people are getting 5% wage increases in a time of 4% inflation? As Jon Stewart told former Treasury Secretary Larry Summers recently - you guys need to get real about what's happening here.

Danger! Workers are doing too well! Call the Fed to shut that down! A conversation with former Treasury Secretary Larry Summers. Watch the full interview in our latest episode, now streaming on @appletvplus. pic.twitter.com/B6GtO0QLnw

— The Problem With Jon Stewart (@TheProblem) March 17, 2023

Inflation keeps fading in February, with even better outlook. STOP TIGHTENING

Given that January’s figures put us back on INFLATION WATCH in America, this week’s releases of February’s Consumer Price Index and Producer Price Index were eyed to see if those higher numbers from January would continue, which could drive the Federal Reserve to keep raising interest rates throughout the first half of 2023.

First up was the CPI, and it leveled off from the January increase that alarmed many on Wall Street.

The Consumer Price Index (CPI) revealed headline inflation rose 0.4% over last month and 6% over the prior year in February, a slowdown from January's 0.5% month-over-month increase and 6.4% annual gain. Both measures were in-line with economist expectations, according to data from Bloomberg.

The 6% jump in inflation marks the slowest annual increase in consumer prices since September 2021.

"Core" inflation, which strips out the more volatile costs of food and energy, rose 0.5% over the prior month in February and 5.5% over last year, marking the smallest 12-month increase since December 2021. Economists had estimated "core" inflation would rise 0.4% on a month-over-month basis and increase 5.5% compared to February 2022.

You can see the steady decline in the 12-month price change since inflation peaked in June.

And then going inside that 0.4% increase in CPI, I see positive trends. February’s 0.3% increase in “food at home” was the smallest since May 2021, with fresh fruits and vegetables going down, and egg prices starting to come back toward earth with a February fall of 6.7%.

The “core” increase of 0.5% also is misleading, as much of that is due to the shelter category, and Investopedia is among those who remind us that higher “shelter” costs (reflected in a measure called Owners’ Equivalent Rent, or OER) aren’t necessarily higher costs for people in the real world.

For most goods and services, the process of recording prices is relatively simple: The bureau sends someone to a store, or calls a business, to see what they are charging for a bag of rice or to send a plumber out to repair a leaky faucet. Recording housing prices isn't as straightforward. The bureau measures actual rental rates for houses, and, using that data, estimates how much owner-occupied houses would rent for if they were put on the market.

“It's a little bit of a fuzzy metric,” said Ryan Sweet, chief U.S. economist at Oxford Economics.

OER is effectively the rent that the homeowner is giving up by living in their house instead of renting it out. It’s influenced by housing prices, but not directly tied to it….

As a result of its methodology, the all-important OER measure tends to lag behind movements in nationwide home prices by about a year. It took a long time for the pandemic-era surge in home prices to show up in the Consumer Price Index, and it will likely take a long time for the recent cooling of the housing market to show up as well.

So this will also mean that CPI will cool down in the coming months based on this lagging OER measure alone. And given that many Americans are locked into fixed-rate mortgages and/or year-long leases, it is unlikely that they actually paid 0.8% more in shelter costs in February 2023.

Then on Tuesday, we got information on Producer Prices, and that had even better news for those worried about inflationary pressures.

A key measure of inflation fell dramatically in February, according to the latest Producer Price Index, which tracks what America’s producers get paid for their goods and services.

Producer price increases slowed to an annual pace of 4.6% last month, significantly lower than the downwardly revised 5.7% in January, the Labor Department reported Wednesday. February prices fell by 0.1% after rising by a downwardly revised 0.3% in January.

Economists surveyed by Refinitiv had been expecting the 12-month rise in wholesale prices to slow to a 5.4% increase.

Taking out the often volatile food and energy components, core PPI also notched some stark declines: Annual price increases dropped to 4.4%, and the index was unchanged from the month before (0% growth). Those are down from January’s downwardly revised 5% annual price gain and 0.1% monthly increase.

So businesses aren’t seeing their costs for products in going up. That declining trend in PPI has been going on since June, with no one month having an increase in final demand above 0.3%.

The total increase in PPI in the last 8 months is less than 1% for the last 8 months measured, which translates to around 1.5% on an annual basis – below the Fed’s already-low 2% goal.

Of course, these CPI and PPI reports predate last weekend’s closures of a couple of banks , whose problems seem related to the Fed’s higher interest rates leading to those banks’ bond holdings being worth less, and lower amounts of lending (because it’s more expensive to borrow money).

And the banking fears now feed back into INFLATION WATCH, as oil plummeted Wednesday. Futures dropped down below $67 a barrel on Wednesday before recovering some losses and closing over $68. That's a lower closing price than we had at any time in 2022.

The news of the last week shows the folly of the Fed chasing last year’s inflation by continuing to increase rates today. Not only do we have 8 months of calmer inflation with little to spark it back up, but we also have banks and other businesses suffering because interest rates have gone up so fast and so quickly.

Well past time for Jerome Powell to stop the 1970s mentality, deal with 2023’s reality, and BACK OFF.