It's Thursday ¯\_(ツ)_/¯

Fed Funds Rate Since 1970


Year over year inflation


Initial Unemployment Claims The lede here, from yesterday is that the the Federal Reserve Open Market Committee held rates steady, as forecast.

This is not really a surprise.  There are a lot of uncertainties right now, and the Fed is disinclined to make changes under such conditions:

The Federal Reserve left interest rates unchanged in its meeting on Wednesday for a second time in a row, and officials stuck to their previous forecast for two more cuts this year.

But policymakers indicated that they are bracing for higher inflation and slower growth as a result of President Trump’s policies, which they said had increased “uncertainty” about the economic outlook.

The central bank’s decision to hold interest rates at 4.25 percent to 4.5 percent extends a pause that has been in place since January, following a series of cuts in late 2024 that lowered borrowing costs by a percentage point.

When — and to some extent whether — the Fed ultimately follows through with cutting rates again this year remains dependent on Mr. Trump’s economic plans, including the sweeping tariffs he has threatened or imposed. ​ Wednesday’s meeting marked the central bank’s most direct acknowledgment to date that the president’s policies are set to have a real impact on the economy.

That last sentence is a rather oblique way of saying that the Federal Reserve is dealing with an aircraft piloted by a chimpanzee.

It is significant that they held rates steady even though the February inflation report was pretty good:

Let me cut right to the chase: the February consumer inflation report was actually very good. It wasn’t just that the headline and core numbers only went up 0.2% for the month, or that the YoY gains in each decelerated. Let me let you in on a little secret: one of the first things I do when the report comes out is scour the categories for any “problem children,” which I arbitrarily define as a category where there has been more than 4% inflation YoY.

This month, outside of the two most lagging suspects, shelter and transportation services, there were none outside of some really obscure small components, like men’s suits. And even in the case of the two remaining problem children, both decelerated, especially on a YoY basis.

In other economic news, the January JOLTS (Job Openings and Labor Turnover Survey) report: monthly increased in January, though there were downward revisions to earlier reports:

To review briefly, the monthly JOLTS reports give us a more granular look at the employment sector, but are delayed by one month vs. the jobs report. Like the jobs reports, most JOLTS series have shown deceleration for several years. The question over the last year has been whether they level off or continue to decelerate towards outright declines in net job creation or stabilize in a “soft landing.”

Additionally, I look at this data because it is a slight leading indicator for both initial jobless claims and unemployment; and for wage growth as well.

For January, the JOLTS data released this morning with one exception was positive on a month over month basis. Unfortunately, this was counterbalanced by substantial downward revisions to all of the 2024 data on openings, hires, and quits. Layoffs and discharges were not materially affected.

Finally, we have the weekly unemployment report, which is still largely flat, with initial claims up 2,000 to 230,000, continuing claims increasing by 33,000 to 1.892 million, and claims by federal employees (delayed by 1 weeks) increased from 514 to 1,066.

The number of Americans filing new applications for unemployment benefits increased slightly last week, suggesting the labor market remained stable in March, though the outlook is darkening amid rising trade tensions and deep cuts in government spending.

Despite the low level of layoffs, more people are staying on jobless rolls longer compared to the same period last year, the report from the Labor Department on Thursday showed. 

………

Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 223,000 for the week ended March 15. Economists polled by Reuters had forecast 224,000 claims for the latest week. Claims have been bouncing in the middle of the 203,000-242,000 range this year, with layoffs generally staying low and hiring cooling off.

………

A separate program for unemployment compensation for federal employees (UCFE), which is reported with a one-week lag, decreased by 514 to 1,066, despite the mass firings of public workers by President Donald Trump's administration as part of an unprecedented push to shrink the government.

Labor analysts said the rapid firings led by tech billionaire Elon Musk's Department of Government Efficiency were in some cases being undertaken in ways that made it harder for laid-off workers to file for unemployment benefits.

I think that the numbers at this point are not reflecting what is going on.

Whether it is just lagging, or, as is implied above, the Apartheid Era Emerald Heir Pedo Guy™ and other elements of the Trump regime are taking steps to game the numbers.

Not a clue as to where the numbers are going.