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Gender: Male
Hometown: Minnesota
Member since: Sat Jan 1, 2005, 04:45 AM
Number of posts: 8,988

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There's a big hole in the Fed's theory of inflation --- incomes are falling at a record 10.9% rate

(that's after adjusting for inflation)

There’s a big hole in the Fed’s theory of inflation —- incomes are falling at a record 10.9% rate, Marketwatch, 4/30/22
(no paywall, its an msn.com link -Progree)

The most concerning thing about Thursday’s report on U.S. gross domestic product for the first quarter wasn’t that the first line of the first table showed that real GDP fell at a 1.4% annual rate. It was the little-noticed news on line 34 showing that real disposable incomes fell for a fourth straight quarter.

Over the last four quarters, the purchasing power of after-tax household incomes plunged by $2.2 trillion (in 2021 dollars). That’s a 10.9% decline, by far the largest in the records dating back to 1947.

Of course, the decline in incomes is merely the unwinding of the massive support that households received from the government in 2020 and 2021 via direct pandemic stimulus payments, the child tax credit, and enhanced benefits for unemployment insurance, food stamps and Medicaid, and more.

. . . But the Fed is determined to quash demand. That’s what raising interest rates is all about: Slowing demand in an overheated economy by raising the costs of borrowing. ((the article argues that quashing demand when inflation-adjusted incomes are falling like this is only going to make incomes fall more -Progree))

. . . The prospect for stagflation—low growth with high inflation—is real. “The appropriate solution to inflation would be to work to alleviate supply-side constraints,” say Nersisyan and Wray. To do that, unfortunately, “we need more domestic investment, not less.”

More: https://www.msn.com/en-us/money/markets/there-s-a-big-hole-in-the-fed-s-theory-of-inflation-incomes-are-falling-at-a-record-10-9-rate/ar-AAWHEFQ?ocid=msedgdhp&pc=U531&cvid=15f1a5a79a714edd9e40436aeb6fdd32

The Personal Income Report he is referring to is at:
The full release with all the tables is at: https://www.bea.gov/sites/default/files/2022-04/pi0322.pdf

I can't find the Line 34 data he is talking about. But in Line 46 of Table 2 of pi0322.pdf, it has

Disposable Personal Income, Total, billions of chained (2012) dollars: quarterly,

2020 Q4: 15,443.0,   2021 Q1: 17,221.6,   Q2: 15,805.6,   Q3: 15,640.0,   Q4: 15,418.0,   2022 Q1: 15,339.2

And yes, there are 4 straight quarters of decline, and 2022 Q1 over 2021 Q1 is a 10.9% decline:

(2022 Q1 / 2021 Q1 - 1) * 100% : (15,339.2 / 17,221.6 - 1) * 100 = -10.93%

Table 2 Line 22 "Government social benefits to persons" shows a huge amount in 2021 Q1 relative to the preceding and following quarters.

Future such comparions of quarterly real disposable income vs. the same quarter a year ago will likely be much less dramatic declines, with the unusual 2021 Q1 falling out of the comparison. For example, comparing 2022 Q1 to 2021 Q2 (that's the last 3 quarters) is

(2022 Q1 / 2021 Q2 - 1) * 100% : (15,339.2 / 15,805.6 - 1) * 100 = -2.95% (-3.91% annualized)

2022 Q1 vs. 2021 Q4 (one quarter) is a 0.51% decline (-2.07% annualized)

but its still in the wrong direction, just not so apocalyptic.

Edited to add the personal savings rate graph below (#7)

Film of Prince at age 11 discovered (known as "Skipper" then)

in WCCO's news archives, the CBS affiliate. They were researching the 1970 Minneapolis school strike, and guess what -- they asked this young boy about his views on the school strike. Cross-posted to GD

start at about 1:09

Great pic:

Edited to Add:

Crickets in the GD forum added this:

I couldn't get the video to play at your link, but I found one on YouTube. At time of posting, there are two here: https://www.youtube.com/results?search_query=Film+Of+Prince+At+Age+11+

Here's one of them - skip to 1:34 for Prince and his childhood friends at 3:42:

Being spammed to death by one financial newsletter after another

For at least a decade I have had little trouble with spam. But for some strange reason I have started getting spammed to death, starting Dec 25 --

Inheritance Goals
Finance Trader Pro
Morning News Catcher
Wealth Optimizer
The Retirement Savers
Hedge Trader
Breaking Profit News
Breaking Tech Circle
Security Wealth,
Breakthrough Alerts
Rich Market Guru
Market Specialist
Fast Retirements
Market Collapse
AI Tech News

To most of them I immediately unsubscribe, and that's the end of it. But whack-a-mole style, I get a newsletter email from a different organization a day or two later.

For those that have run a day or longer before I unsubscribe, they are all daily or even more than that emails. So just ignoring them isn't an option.

I know the canned advice I've been hearing for decades to just ignore them because by unsubscribing, I'm just verifying that I'm an active email address. But had I maintained that philosophy from the beginning, I'd be getting literally thousands of email a day. I have found it works, in the past, to unsubscribe from anything semi-legitimate. (I do ignore the occasional ones from Russia offering to show dirty pictures though, Nigerian princes and so on ).

But now, for the first time in decades, unsubscribing isn't solving the problem.

They all seem to be using the same spamming service, e.g. when I unsubscribe, it says
"You've successfully been unsubscribed from (name of newsletter) Channel messages."

I've heard of forwarding to spam@uce.gov -- does that do any good?

Block doesn't work reliably on my Outlook 2010 email -- neither does rerouting by address to some other inbox --

Thanks for any ideas

Edited to add - I just sent one of each to spam@uce.gov anyway
Edited to add - All of the ones I sent to spam@uce.gov bounced. "Unable to deliver message after multiple retries, giving up."

I'm just baffled that for at least 10 years, I haven't had much of a spam problem. And then this. I guess I was really wondering if other people are experiencing a sudden huge increase in this in the past month or two -- in particular being put on various email subscription lists for email newsletters of different types. Most of mine have been financial newsletters that I enumerated above. But there have been a few others of different hues: Earth Overshoot, The Cogniciti Team, Conservative Top News.

I guess not.

I'm really focused on trying to cut it off at the source rather than routing an ever-increasing number to a junk folder, particularly given that this thing isn't working reliably in Outlook 2010.

Grocery store: I take an item or 2, remaining items way back & no longer visible .. do I move ..

Let's say I grab one or two of the same item from a low shelf, and there are still ones remaining, but they are far back and one would have to bend way over or get on the floor to see them. So, I think about others and move up one or two of the back items near the front of the shelf so it/they are easily visible (edit: and reachable).

(There are times when it's hard to find a certain item in a very busy shelf full of similar items, so even sometimes when all items are front and visible, it still can take a long time to find what I'm looking for. With the item I'm looking for being way back in the back of some narrow hole, on a lower shelf, well, I'm sure I've missed seeing something I had spent several minutes looking for that was there.)

But I keep wondering am I really doing others a favor? Do the grocery store shelf stockers clue off the empty spots (if I had not moved items forward) to know to put more items on the shelf or something? So I might be screwing up their system?

I assume computers keep track of what's been purchased and what's been put on the shelf... but ... is the system that good? It could be foiled by shoplifters for example. Edit: or idiots taking an item but then later putting it back on some shelf 3 aisles away.

I have been wondering about this almost every time that this situation arises. Thanks

Edited to change "every time I go to the grocery store" to "almost every time that this situation arises "
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