Joe Biden got a presidential initiation with his first full-month jobs report, presiding over a better-than-expected reading of the U.S. labor market last month. Of course, if this were former President Donald Trump's time, the left would say that it was all because of his predecessor, former President Barack Obama. So, thanks Trump?
Biden’s America Off to a Good Start?
According to the Bureau of Labor Statistics (BLS), the U.S. economy created 379,000 new jobs in February, higher than the market forecast of 182,000. This is up from the newly-revised 166,000 new positions created in January. The unemployment rate dipped to 6.3%, while the labor force participation rate was unchanged at 61.4%.
Moreover, average hourly earnings jumped 0.2%, and average weekly hours slid to 34.6.
Most of the job gains were concentrated in leisure and hospitality as the industry created 355,000 positions amid more economies reopening. This was followed by professional and business services (63,000), education and health care (44,000), retail trade (41,100), and manufacturing (21,000). The most significant contractions were seen in government (-86,000) and construction (61,000).
Despite the positive feeling from the best labor reports in four months, senior economist Daniel Zhao of Glassdoor wrote in a note that there is "still a long way to go":
"The engine of economic recovery is restarting as the pandemic’s winter wave recedes, although there is still a long way to go. The economy would need to add almost 1 million jobs a month for the rest of 2021 to return to pre-crisis levels by the end of the year."
The End of Bitcoin is Nigh?
Is the end of bitcoin coming? Ever since Treasury Secretary Janet Yellen and several other prominent billionaires talked down the peer-to-peer decentralized cryptocurrency, bitcoin prices have slumped from their record highs, trading below $50,000 per coin. Whether the virtual currency market is experiencing a correction or not, the long-term barrier in its venture to the moon might be the government. Typical.
Speaking in a recent interview with CNBC, Kenneth Rogoff, a Harvard Professor of Economics and the former chief economist at the International Monetary Fund (IMF), contended that the government and central banks would not allow bitcoin to go mainstream. He told the business news network: "Eventually over the long course of history, the government first regulates and then it appropriates, and I think we can see that happening here.” Rogoff added: “As it really starts to compete with ordinary, fiat currencies, government currencies, I think they’ll clamp down on it like a ton of bricks. They are not going to allow that to happen."
Rogoff believes the bitcoin bubble could pop, admitting that it could take a while because regulations are only now in the early phases, plus many wealthy and prominent investors have hopped on the bitcoin bandwagon. Elon Musk’s Tesla Motors is an example.
But could a government ban even be feasible? As Robert Wenzel, the editor and publisher of the Economic Policy Journal, writes, all the leviathan has to do is write this law: "The government hereby makes it illegal to conduct transactions in bitcoin."
With all this talk of central bank digital currencies (CBDCs), the state has a vested interest in the abolition of bitcoin and its sister cryptos. It may not happen today. It may not happen tomorrow. But someday – and for the rest of the fiat system's life.
The Powell Pivot Plunges Markets
Would you like inflation here or there? Americans would not like inflation anywhere, Powell-I-Am.
Federal Reserve Chair Jerome Powell reversed his position on inflation and conceded that it could happen as the U.S. economy reopens. Despite the inevitable boost in prices for goods and services consumers need, amid a year of money-printing and historically low interest rates, the central bank does not intend to raise interest rates to curb inflation. Powell and Co. assert that the Eccles Building needs inflation to be higher and the labor market needs to return to full employment.
“We expect that as the economy reopens and hopefully picks up, we will see inflation move up through base effects,” he said during a Wall Street Journal virtual conference. “That could create some upward pressure on prices.”
Powell plunged the financial markets into red ink, making the benchmark indexes suffer their worst day since October. The Nasdaq Composite Index also turned negative for the year. Investors were not only concerned about inflation, but they expected the Fed Chair to remark on issues in the repo markets again, offer some pushback to the enormous volume in the Treasury markets, and comments pertaining to Supplemental Liquidity Ratio (a limit on how leverage U.S. banks can get).
Everything sank: equities, industrial metals, hedge funds, and Dave Portnoy's new exchange-traded fund (ETF) baby: BUZZ. So, is this the start of a full-blown correction after a year-long rally? As Liberty Nation recently noted: Don't try to understand it. Feel it.
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Read more from Andrew Moran.
