“Davidson” submits:
Q1 2022 hedge fund letters, conferences and more
June 1, 20223:00 PM EDTLast Updated 15 days ago
https://www.reuters.com/markets/us/us-job-openings-fall-april-still-high-2022-06-01/
“U.S. labor market stays tight as workers remain scarce; manufacturing regains speed”
Powell is targeting JobOpenings with the view that inflation is due to excess demand on goods. There is so incorrect as to question the entire Fed’s perception of the meaning of any economic data.
- Inflation comes from currency expansion and over-regulation which are a 1-2 punch to economic value-more currency dilutes economic value while regs slow value creation to offset more currency
- Periods of high labor demand, demand for goods have always been deflationary as most consumers spend earnings to gain more value than earnings received in judicious consumption.
- There is no inflationary relationship between JobOpenings and inflation
- This time around has employers posting identical job openings on multiple sites to widen the net. Perhaps current levels are 3-4x higher than the actual demand.
The problem with most economists is the lack of reference of data compiled to human behavior which is where the data is created. They stay with the numbers and interpret past data with current data as if they are comparing oranges to oranges. Human behavior is never the same and any interpretation that does not reference what people say they are doing at the time to direct policy will be policy off the mark.
My focus always includes current human behavior vs the realm of factual data at hand. One must always sift through multiple indicators selecting those with decent reliability and assign others as carrying less useful input. Powell is taking JobOpenings at face value as is the entire Fed of actual demand. It is not. CEOs have told me what they are doing. Current level over count the demand by multiples. The Fed is lost in numbers not knowing what they mean.
