US Economic Realities : You Can't Always Get What You Want

But if you try sometime you'll find You get what you need

In todays economy, the pursuit of low unemployment and low inflation seen as possible by many, but the recent economic data suggests that the Government & Federal Reserve's goal of a soft landing may indeed be slipping through their grasp. As the legendary Rolling Stones once said, "You can't always get what you want." Let's break down this week's data to better understand the situation.

Inflation Remains a Thorn in Our Side

Despite clear signals of ongoing inflation troubles for everyday Americans, the Federal Reserve has chosen not to raise interest rates further above 5.5% or engage in more quantitative tightening(selling of bonds which would raise rates) with the Fed Chair stating that more hikes may be needed to finally eliminate inflation. This reactive stance towards inflation only exacerbates the pain in Americans' wallets, potentially prolonging economic discomfort.

Inflation has not shown any signs of relenting. It's now 4% inching closer to 5% rather than the Fed's target of 2%, causing financial strain and eroding purchasing power for Americans across the board.

Job Market Woes

The October jobs report paints a grim picture. To make matters worse, data for the entire year of 2023 has been revised downward, challenging the narrative of a robust economy. August job data was revised from 227k to 165k, and September from 336k to 297k, while October's data showed a further weakening with just 150k jobs added, falling short of the estimated 170k.

Unemployment is on the rise, and total unemployment U6, a broader measure of unemployment, has reached 7.2%, approaching the highs seen under the Biden administrations. The burden of unemployment and its effects are most acutely felt by African Americans and Hispanics, who are experiencing unemployment rates of 5.8% and 4.8% respectively. This situation contradicts the promises of government policies designed to address economic disparities that include equality for all as our fellow Americans are losing jobs, and now inflation continues to destroy their savings causing overall credit card debt to soar and delinquencies to hit higher levels then when the economy was lockdown in 2020.

Tech Giants Falter

Apple's recent earnings report serves as a gauge for the overall US and global economy. The tech giant reported its fourth consecutive quarter of declining earnings and revenue, a shocking data point to the worlds largest company, since this is the first time it happen for the cali tech company, since the bursting of the tech bubble in 2001, signaling a prolonged period of stagnation. This is particularly concerning as they have introduced new products and deals in a bid to stimulate growth. The last time Apple experienced significant growth was due to government stimulus checks in 2021, and since then, their growth has turned into declines and the stock has become overvalued.

As we approach the end of 2023, it's evident that reactive solutions to economic problems are not the path to recovery. While the government and the Federal Reserve have talked about a soft landing, the economic lyrics of the Rolling Stones echo in the background: "You can't always get what you want, but if you try sometime, you'll find, you get what you need." And what we may truly need, given the current fiat monetary system, is a reevaluation and a potential recession.

In the realm of Austrian economics, it becomes clear that the balance between inflation and unemployment is a delicate one, and the Fed's approach may be missing the mark. As we move forward, it's essential to assess our economic strategies and consider more proactive measures to ensure a more stable and prosperous future for all Americans.